In order to answer the question, “What is P2P automation?”, we must first explain the acronym P2P. P2P is short for “procure to pay.” Procure to pay is one of the most fundamental cycles in business. The term describes the entire life cycle of a transaction from the procurement phase all the way to the accounts payable (AP) phase. This is where invoices are approved and suppliers are paid. The goal of P2P automation is to use the power of digitalization to increase visibility over the P2P cycle as well as to streamline it by reducing paperwork. One specific area where automation can be very helpful in the P2P cycle is in the accounts payable phase. Unfortunately, despite there being many different kinds of automation solutions available, many businesses continue to rely on paper-based processes to manage their invoices and pay their suppliers.
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This has many downsides. First, these kinds of processes are not scalable. Your business may go through a period of high growth and start processing more transactions. But that can cause your accounts payable team to become buried under mountains of invoices that will most likely end up getting paid late. Late payments can then be detrimental to your relationships with your suppliers, causing more headaches. These are just a few of the problems that arise when doing accounts payable manually.
If you were to look at any market guide for accounts payable invoice automation solutions, the best option for middle-market businesses would most likely be AvidXchange. AvidXchange possesses an entire suite of products and software solutions designed specifically to improve your accounts payable processes. We enable you to bring the power of automation into your accounts payable department so that you can clear all those papers off your team’s desks. With AvidXchange, you can code, approve, and pay invoices in just a few clicks, sending payment instantly to your vendors instead of making them wait on slow mail deliveries. Our P2P automation software allows you and your team to spend more time growing your business and less time filling out paperwork.
When it comes to the procure-to-pay process, SAP can be a very useful software solution that can aid in making the procurement process more efficient. But what is SAP procure-to-pay? SAP is useful for accounting and other phases in the cycle. Even with an SAP solution, however, you still will be swamped with paperwork at the end of each transaction, leaving your accounts payable team scrambling to keep up. Fortunately, there is procure-to-pay software designed to benefit your accounts payable department. It’s called AvidXchange. One specific solution from AvidXchange is AvidPay. AvidPay allows you to completely automate your bill payment processes and workflows and pay your vendors electronically. Our platform enables you to switch to paperless bill payments and create custom workflows, and it is already trusted by over 825,000 suppliers and vendors across a multitude of industries. With AvidPay, your existing accounting system will remain your system of record, but payments can be made instantly through our easy-to-use interface. AvidPay has the capability to speed up your P2P cycle by making the “pay” element simple, fast, and easy.
Generally, the top procure-to-pay software will be both versatile and highly usable. When it comes to the beginning of the cycle, the best procurement software includes automation features to make your life easier as well as robust supplier management features. The best procure-to-pay companies offer software that is cloud based. That’s why AvidXchange has designed all of its solutions to fully enable cloud functionality. Because the platform is in the cloud, AvidXchange allows you to gain 24/7 visibility and access to your accounts payable processes so you can always know exactly what’s going on. Because of its security, reliability, and effectiveness, you can expect to find AvidXchange on any procure-to-pay software list.
The objective of the procure-to-pay process is to make the entire purchasing process better. AvidPay from AvidXchange does that by giving your accounts payable team the ability to foster supplier relationships by always paying invoices on time, as well as ensuring that your team is always prepared to scale up with growing workloads. Although you may have heard of the term “order to cash,” it is not the same thing as procure to pay.
When it comes to procure to pay vs. order to cash, the simplest way to describe it is that the “other side” of order-to-cash transactions is a customer, while the vendor is the other participant in procure-to-pay transactions. P2P is more about purchasing supplies, while O2C is about sales. Although they are similar, their functions are very different. You may also hear about source-to-pay benefits as well. Source to pay is also similar to procure to pay but goes back a step further to the sourcing phase of a supplier transaction. In this case, a source-to-pay solution would bring benefits that would make it easier to identify the best suppliers in the first place, as well as all the other benefits we have discussed.