What is P2P?
A Procure-to-Pay system is a fully integrated and automated end-to-end business process, which starts with suppliers, continues with ordering and receiving, and ends with payment. The process begins with suppliers who offer products and services at negotiated and contracted prices. A business then initiates the automated shopping and ordering process for food, operating supplies and equipment (OS&E), services, and furniture, fixtures and equipment (FF&E). The generation of purchase orders, approvals, receiving, invoicing and payment are processed in the system, which ends with approved to pay invoice vouchers that are integrated into an accounts payable or ERP system.
The value is determined by asking the question: how big is the compliance gap between your current business performance and your desired business performance? Based on your company’s answer to this question will help determine the ROI, which is estimated to be 5% to 20%.
Improving business processes by streamlining and centralizing purchasing, accounting and inventory (and other modules available) not only saves money, but increases efficiency, visibility, control and compliance. Having on demand, real-time data, pricing and reporting enables better and more strategic decision making. A cloud-based solution ensures employees and management can access information anytime, anywhere.
How can a P2P solution help your business?
When you automate your purchasing, accounting, inventory and recipe management systems, your bottom line is impacted positively. The core benefit of a Procure-to-Pay system is increased operating profitability. Procure-to-Pay reduces operating expenses by providing tools and automation to a complex process.
Calculating return on investment (ROI) from automating Procure-to-Pay is directly tied to the CedarCreek modules deployed and is measured by comparing the current costs of the business processes to the Procure-to-Pay costs post automation. The greater the amount of change from manual procedures to new automated processes will result in a shorter ROI. Based on our experience and anecdotal customer reporting, the minimum ROI delivered by the automation of Procure-to-Pay using CedarCreek is 3 to 9 months after the system Go-Live.
CedarCreek customers routinely report a reduction in direct expenses (OS&E and F&B purchases) in excess of 5% and AP labor reductions of 50% or more. All report immeasurable soft cost reductions and reallocation of resources.
The major drivers of the cost reductions, by module, are listed below:
- Compliant approval workflow and reporting on non-compliance
- Integrated checkbook provides accountability and transparency
- Catalog management provides accurate pricing and reporting
- Catalog management reduces expenses from non-compliant suppliers and products
- Significantly reduced time to conduct all purchasing activities, including approvals and receiving
- First time accuracy of GL coding reduces time to code and correct after the fact
- Transactional reporting provides immediate business intelligence to drive savings
- Reduction of paper and supplies
- Reduces the time to receive, open, file, match, code, approve and process invoices
- AP 3-Way Automation and Integration
- Reduces time to process, match, code, correct and approve invoices
- Reduces postage and supplies
- Inventory Control
- Automation of planned purchases improves accuracy and reduces waste
- Reporting identifies recurring variances by product to reduce loss
- Take Inventory reduces time
- Automation of planned purchases reduces time
- Maintains perpetual inventories for live checking to improve accountability and reduce loss
- Can integrate to POS for automating requisitions to reduce time and loss
- Recipe Management System
- Reduces waste
- Provides costing tool in real time to allow pricing updates to menus
- Provide ad hoc specials and banquet costing in real-time to avoid errors in pricing resulting in higher than desired food and beverage cost
- Can integrate to POS to provide accurate theoretical food cost to manage food cost better and reduce waste, loss and cut down on errors.
When you combine all of these costs and how much change will occur from using manual to automated processes, typically companies will see an average of 5% to 15% reduction in costs. In addition to how each module will improve your business processes, properties can elect to participate in CedarCreek’s integrated Purchasing Program exposed in the Club’s online marketplace, which will lower the costs of goods across all departments contributing to an even higher ROI.
Compliance – both internally and with suppliers – is another area that will greatly benefit your business, along with operational process improvements. Automating Procure-to-Pay provides clients with the tools to improve operational compliance at the property level while introducing new standard operating processes (SOPs) and best practices. CedarCreek’s platform has the capability to increase efficiency, provide controls and compliance. All of these combined benefits contribute to overall business process improvements (BPI). Today’s most professionally run hospitality organizations have improved their bottom line by adopting automated Procure-to-Pay processes.
Why CedarCreek Systems?
CedarCreek’s partnership with BirchStreet Systems enables our team to deploy a procure-to-pay system designed specifically for the Club industry. CedarCreek Systems is the only company that delivers technology and purchasing programs in one strategic solution.
Contact CedarCreek today to see how we can help improve your bottom line by leveraging the power of automated Procure-to-Pay software.