OUTSOURCING

PROCURE TO PAY (PTP) SERVICES

Procure to Pay (PTP) services   

Procure-to-pay (PTP) is the process of integrating purchasing and accounts payable systems to create greater efficiencies in the organization. PTP mainly includes the issue of purchase requisition, the process of the purchase order, receipt of goods or services, record of supplier invoices, and process the payments for outstanding invoices.

PTP process can be divided into three broad phases:

1. The Purchase Order Process, during which:

   • Purchase requisitions are created and approved

   • Vendors are evaluated and carefully selected

   • Purchase orders are issued for the required goods and services

2. The Receiving of Goods or Services Process, during which:

   • Goods are received in store or warehouse or Services are rendered to the orgnaisation

   • For goods, receiving documents are reviewed and logged

   • For services, receiving department confirms that services are provided

3. The Supplier Invoice Approval process, during which:

   • Invoices are received

   • Invoices are reconciled and cross-checked with related documents

   • Errors are recorded and corrected

   • Approved Invoices are paid

Key activities in the PTP domain

• Vendor setup as per the organization policy and practice

• Prepare purchase requisition

• Create purchase orders

• Verify, record and pay vendor invoices

• Prepare payment plan and payment intimation

• Recording of payments

• Monthly reconciliation of suppliers balance

• Employee claims – verification and payment assistance

Key benefits for outsourcing the PTP process

• Improves Efficiency of Accounts Payable team - The team can focus on their core operations and adherence of internal control. Skilled personnel can be utilized for vital roles, rather than devoting time for repetitive data processing work. The Company can also reduce their recruitments to reduce fixed costs.

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• Leverage Technology - Workflow automation minimizes the time spent on manual process. Usually invoicing process is done manually, which is time-consuming and prone to errors. By configuring the PTP flow appropriately, the organization can eliminate the need for manual reporting and achieve faster cycle time.

• Cost-Effective – Outsourcing ensures scalability resulting in cost savings and improves profitability.

• Minimizes Business Risk – Outsourcing strictly works on maker & checker concept, which reduces the possibility of payment fraud.

• Adherence to Service Level Agreement & measurement of Key Performance Indicators -  Accounts payable outsourcing partner adheres to service level agreements. The outsourcing partner also measures the agreed key performance indicators. The organizations are in a position to ensures strict implementation of internal control and timely reporting of key performance results.