Mid-market companies are a core part of a B2B purchasing space that Forrester estimates will reach $1.2 trillion in total spending by the year 2021. Deloitte’s Technology in the Mid-market: Closing the Gap report documents the significant budget increases allocated to cloud and service contracts for productivity gains. Today, growing organizations like yours are dramatically increasing the percentage of total spend to secure marketing, IT, HR or accounting data with software solutions and service providers (such as AP automation).
To manage the purchase and payment of services, the accounts payable team and specific departments need to receive an invoice, track the spending against a contract or service agreement, and check the negotiated pricing, payment terms and budget before payment. Meet our Service Contract Tracking and Payment solution to simplify your collaboration and accountability.
Service Contract Tracking Integrated with Purchase to Pay:
AvidXchange offers a seamless solution to manage vendor contracts and service agreements, helping you to track and report on key contract metrics. Our solution captures and routes contract-related invoices for approval and issues payments linked to a contract. Once the contract has been approved in the portal, requisitions, purchase orders and invoices can be released against the contract, and AvidXchange updates the remaining contract budget. While the details of the services provided might vary, the total contract value, payment terms and expiration date are established upfront – with the ability to always adjust the contract dates and amount by submitting a change order through approval.
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Proactive Contract Budget Management:
With a solution in place that employees actually like, you can start meeting your contract management goals. Contract budget tracking helps your organization adhere to your budget and project goals. From AvidXchange’s Contract Search screen, your CFO can quickly view total contract spending as well as remaining budget to date. For a deep dive into contract details and expenses, you can generate with a click a contract budget report from our Reporting Dashboard. If you are approaching the budget limit, your procurement team can re-evaluate the contract or address the issue through a change order.
Customers like CHPA and oil and gas transporter and producer Oryx Midstream Services (Oryx) have used the AvidXchange Purchase to Pay to successfully track contracts and budgets for research services (CHPA) and contractors (Oryx). They have benefited from having a holistic view of their spending in relation to the contract. For example, approvers can drill into a contract from an invoice to check that the invoice reflects the negotiated price, payment terms and scope of work.
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Business Alerts for Expiration Dates:
To help you stay proactive with managing your service agreements and contracts, AvidXchange also offers business alerts. One way to use these alerts is to set a reminder email notification to go out 90 days before a contract expires. With this reminder, the procurement team has sufficient time to re-evaluate a contract and go out to search for other providers’ bids.
Gain a Holistic View of Spending Across Entities:
From the perspective of CFOs and upper-level management, the biggest gain with an integrated purchase to pay and contract platform is the additional control and global visibility. CFOs can view service contract spending and budgets at a high level across departments and entities. At the same time, they can easily drill into individual requisitions, purchase orders and invoices tagged to a contract to see how the transaction was coded.