P2P Processing: Driving Down Costs Per Invoice

This article is written by our guest blogger Saji Kallikkat, our Director, F&A Outsourcing at Sutherland Global in Chennai, India.


invoicingFrom receipt to approval to payment, processing an invoice can be very expensive for companies that don’t have a proper Procure to Pay (P2P) process in place. Numbers will vary from business to business, but there’s no avoiding the fact that the cost of an inefficient system adds up – and quickly.

The best way to drive down the cost per invoice is to implement the right tools and processes to enable a fast, accurate and standardized system – one that facilitates the payment of approved invoices through your organization’s existing ERP. So what are the key features to look for in a P2P process?


In spite of its clear advantages, many industries still haven’t centralized their P2P processes. Yet establishing a centralized processing center is one of the most important steps an organization can take to improve P2P and drive down the processing cost per invoice. It helps create specialized processes, improve decision-making capabilities and increase productivity.

With a centralized process, organizations are in a better position to take advantage of savings opportunities through timely or even early payment. After all, improved cycle times open the door to optimizing cash discounts. There is an opportunity cost to paying early, but the overall gain is much higher.
Integration and Automation

A common weakness among companies is that they lack a strong procurement system. To be effective, your P2P process should be well integrated with your organization’s existing systems and be able to accommodate a changing workflow. It should also allow for automation. For example, a scanning solution can be equipped with the Optical Character Reading (OCR) software, saving the cost of capturing data multiple times, and enabling faster and more accurate invoice matching.

Once in place, such a process enables employees to access real-time metrics from anywhere in the world. It minimizes errors and reduces the number of FTEs involved in the P2P process. With fewer exceptions, AP staff can spend less time monitoring the system, thereby freeing up valuable resources. The net result is a lower cost per invoice and a far more effective system.

Tools and Technology

Even with the right approach, it can be a challenge to stay on top of P2P without the latest tools and technology. But to stay competitive in today’s fast-paced digital world, companies need to move away from traditional paper invoices.

There are plenty of enabling technologies that will improve your system’s efficiency. For example, bringing in technology and software or EDI can be used to convert paper invoices to electronic invoices. It should be noted that some technologies may not reduce the time your FTEs spend per invoice, but they will improve your overall efficiency.

Other tools include Evaluated Receipt Settlement (ERS), which can be used for generating the invoices and sent to suppliers rather than receiving the invoices from suppliers; and P-Cards, which save a lot of time and money when processing low value invoices. By integrating tools like these into your P2P function, you’ll increase visibility, efficiency and accuracy, greatly reducing the processing cost of each invoice.

Outsourcing – The Cost-Effective Solution

The verdict is in: to drive down invoice processing costs, you need to centralize, automate and integrate, as well as adopt the latest tools. But that can be a daunting task. Technology is expensive. For companies with multiple locations, it can be a challenge to centralize processes. And without the proper in-house expertise, a system overhaul can interfere with day-to-day operations.

The best option is to outsource P2P functions to an expert service provider. Here at Sutherland, we offer the experience and technology you need to lower the cost of processing each invoice. If you’re interested in arranging a free assessment of your current practices with one of our finance experts, schedule an appointment today. Comments? Questions? I’d be happy to answer.

Be Sociable, Share!
Sutherland Editorial Team (386 Posts)

Leave a Reply

Your email address will not be published. Required fields are marked *