The pillars of procure to pay: Part 1– spend under management
Part 2 of this series: The pillars of procure to pay: Part 2– global compliance
Part 3 of this series: The pillars of procure to pay: Part 3—supplier adoption
Part 4 of this series: The pillars of procure-to-pay: Part 4 — fuel business agility and growth
The procure-to-pay landscape has changed drastically in the era of global supply chains and cloud-driven technology. And in recent years, these significant changes have been driven by a need to adopt a more digital approach to business. With the pandemic leaving supply chains and manufacturers severely strained, having reliable tools to help with P2P has never been more crucial.
For starters, most successful enterprises have elevated procurement’s role to that of strategic advisor. The dawning recognition that bringing the back office forward is crucial to organizational agility has been covered exhaustively, but the impact cannot be overstated. Your organization needs to include procurement when it comes to forecasting for the future.
But now, it’s time to take that next leap. In many situations, organizations lack technological solutions built to support the modern functions and processes involved in procurement. This gap in support leaves supply chains vulnerable. To address these challenges, we’re diving deep into what exactly your procurement department needs in today’s modern landscape.
These “Pillars of P2P” help us visualize the necessary components to support a global procure-to-pay platform. When you fail to recognize and account for these pillars, improving your processes will prove to be more difficult.
Today, in the first installment of the series, we’ll explore why you need to bring all (yes, we mean 100%) of your spend under management. Later in the piece, we’ll touch on how Tradeshift addresses this in our platform solutions. Later on, we’ll tackle topics like global compliance, the adoption barrier, the innovation imperative, and more. To keep updated on the latest installment, be sure to check back to our blog frequently.
Why you need to control your spend
Controlling all your spend is essential for many reasons. It leads to better decision-making with a greater focus on strategy, for starters. By having all your spend in one location, you can more easily budget and forecast your spending for future quarters.
Additionally, controlling your spend leads to real cost savings. This consolidated and insightful data will help you report on spend health more accurately, leading to healthier spending habits, both on and off-contract.
Getting control over your spend also helps you to save time and keep from stressing at the end of the month or fiscal year. By staying on top of your data, you can avoid lengthy manual reconciliations and access more accurate, real-time data.
At Tradeshift, we don’t just talk the talk; we deliver results. That’s why we were rated in the market leader category in FeaturedCustomers’ 2023 Spend Management Customer Success Awards’.
When it comes to procurement specifically, the closer you can get to have 100% of your spend under management, the better. This leads to greater cost visibility, leading to an array of positive outcomes. Your team will find themselves more equipped to support compliance initiatives and negotiate for better pricing points.
The process of getting your spend under management
It takes some time to get your spend under management. There are two main things you need to get started:
- The right tool(s) for the job
- A central hub for all your data
You first need to get all of your suppliers into one system to get started. That’s where Tradeshift can help.
Bonus Material: Get a deeper understanding of the difference between direct and indirect spend as it impacts your organization.
A supplier ecosystem
Tradeshift gives you unmatched control over all your services and goods. Even better, is these processes are all housed in one central location, rather than across a variety of platforms and catalogs. What does that mean for your company?
Well, for starters, your suppliers will appreciate the new platform and the value that is automatically added to your relationships. With onboarding being a quick, easy, and free thing to your suppliers, the Tradeshift platform has many compelling incentives to join, such as:
- No cost to your suppliers
- Instant, visible value
- Access a vast network of buyers
- A simple user interface
The Tradeshift platform in action:
The Tradeshift Platform enables your suppliers to easily manage the pricing for goods and services, allowing you to keep up-to-date on products and price points in real-time. Tradeshift’s marketplace platform allows you and suppliers to expand their professional networks, offering more choices for buyers and a larger market for suppliers to capitalize on.
The platform approach to our solutions means navigating the network and finding information on suppliers is simple and efficient. Our Tradeshift Marketplace function allows you to search through all your supplier’s catalogs quickly, and our machine-learning solutions can offer intelligence search capability while your team shops. By drawing upon previous purchases and shopping history, our tools make shopping an enjoyable experience that is more fluid than ever.
When do you need virtual cards?
Sometimes, your team may need to buy things outside your existing catalogs or list of preferred vendors. Many times, when you have to rely on these non-preferred vendors, organizations choose to go through e-commerce sites or other online shopping platforms like Amazon. In these situations, it’s best to use a virtual card. Lucky for you, Tradeshift offers just that.
Virtual cards are immensely helpful for organizations with high levels of spend. These cards enable your team to gain pre-approval for non-catalog purchases. What’s even better is that these cards provide your team with an encrypted code that they can use to purchase against a company card once approval is actually granted.
These virtual spending cards are not a far-off thought; they are already very much a reality. Thanks to our partnerships with some leading global financial partners, we’re working to bring this approach to the procure-to-pay scene.
It’s not a secret that many procurement teams struggle with controlling spend due to rogue spenders. By implementing a virtual credit card into your overall procurement software, you can eliminate the often-abused company credit card while enabling your team to buy the supplies they need from anywhere on the web.
See a virtual credit card in action:
A Typical Organization’s Spend —
Your corporate credit card has a $100,000 limit, which can cover 100 different $1,000 requests or even smaller denominations. The card owner sets expiration dates that cover a period only long enough for the items requested to be purchased.
Using Virtual Cards —
Virtual cards capture the long tail of spending upfront. With Tradeshift, users request virtual credit cards while they shop. This allows your users flexibility but removes the Expense Report and P-Card reconciliation process for both you and your employees.
Getting 100% of spend under management is a crucial pillar of P2P, but it’s not the only pillar. Ultimately, Tradeshift allows the management of all aspects of your procure-to-pay process through simplified solutions for suppliers, shopping, purchasing, invoicing, and payments.
Stay tuned for the next post in this series detailing how Tradeshift enables global compliance. To learn more about the Tradeshift Platform and how it can help support shifts in your organization, reach out to our team today.