Chances are, you’ve seen a fair share of friction can exist between A/P and Purchasing in the Purchase-to-Pay (P2P) process.
Your A/P department’s focused on timely payments and accurate info. Purchasing wants to close the deal and get their goods.
But for the sake of profitability and efficiency, you know that friction needs to be quelled.
In fact, a study by The Hackett Group found that when A/P and Purchasing are strongly aligned, companies see:
- a lower cost per invoice
- a higher first-pass match rate, and
- more early pay discounts captured.
From separate to synchronized
Ready to reap those benefits of speed and savings? Here are three common problems many P2P staffers encounter – and how you can help both teams overcome them:
1. “They don’t get it.” Both groups have unique priorities and processes. But without communication, no one wins.
What can help: Have them schedule a routine time to discuss recurring issues – aside from when they just pop up.
Often, these teams only interact in times of urgency – when there’s a vendor issue, a misplaced tax form, missing documentation, etc.
By meeting regularly, outside of those stressful, sporadic encounters, the two will have ample time to come up with longterm solutions instead of quick fixes.
You could also work with the CPO to implement annual shadowing and training so both teams see what the other deals with day-to-day. (Plus, in a pinch or during busy season, both groups will have the skills to step in and help the other.)
2. “We have different priorities.” You know there are big-picture goals connecting P2P, but sometimes A/P and Purchasing may get tunnel vision on their specific day-to-day priorities.
Work with them to select goals and KPIs where they both benefit (shorter cycle times, fewer vendor queries, etc.). Not only will it inspire camaraderie, more focus on metrics could lead to improved metrics. A simple Venn diagram may be all they need to see where goals overlap and pick a starting point.
3. “They told the supplier …” When it comes to vendor management, A/P and Purchasing should be a united front. But inconsistent communication has been known to cause issues that could lead to strained vendor relationships (or worse, legal trouble).
That’s why it’s vital to make sure all your policies clearly outline who’s responsible for what – securing W-9s, updating info, answering queries, etc.
Now, before the start of a new year, is a good time to give P2P policies a once-over to check all your bases are covered and that both teams know their responsibilities inside and out.
