Considering the volume and complexity of transactions related to the procure-to-pay, or P2P, processes, we find that companies rarely look at this area in a truly integrated, end-to-end fashion. Increasingly, however, we are seeing procurement and AP teaming together to share the benefits of a comprehensive review of this area. Knowing where to look and having the right tools and experience can be the key to unlocking hidden process improvements or cost recovery opportunities that directly impact the bottom line. Protiviti’s Procurement Assessment and AP Recovery Solutions are designed to:
- Identify and recover financial leakage in the form of duplicate payments, unused credit memos, and lost or missed discounts
- Determine opportunities for working capital improvement such as payment terms and utilization of discounts
- Identify procurement and accounts payable process improvements (e.g., PO/transaction processing, vendor master file, transaction costs, fraud indicators)
- Develop spend classification and conduct sourcing review (e.g., spend categorization, supplier fragmentation, sourcing opportunities)
We leverage our industry-leading web-based data analysis tool with a single data load. The result is an end-to-end holistic solution that pinpoints and recovers cash, identifies opportunities and process improvements, and ultimately supports a procure-to-pay process that can deliver increased value to the organization.
High potential for savings
Protiviti’s Supply Chain professionals believe that, on average, you can expect to find up to a tenth of a percent of a company’s spend in financial leakage. These recoveries typically go right to a company’s bottom line. As an example, for a company with a 5 percent profit margin, $1 million in recoveries equates to $20 million in incremental sales. Additionally, strategic sourcing opportunities identified during a procurement assessment can yield substantial cost savings – 8 to 12 percent or greater of spend.
In addition to bottom-line savings, combining an AP initiative with a more traditional procurement/spend assessment can yield substantial results, including:
- Improved working capital/cash flow management
- Spend transparency, enabling strategic sourcing
- Lower AP and transaction cost management
- Supplier master file management opportunities
- Enhanced contract management capabilities
Our consultants have extensive knowledge of the procureto-pay process and have experience implementing people, process and technology changes to sustain improvements in these areas.