One area that is often overlooked in building an Optimised Cost Base is the procurement and Procure to Pay (P2P) process. This slideshow highlights the benefits of delivering an efficient operation and identifies ways to drive improvements across the whole end to end process

1. CREATING AN EFFICIENT PROCUREMENT & P2P OPERATION

2. Procurement
FUNCTIONSPECIFICOPPORTUNITY:PROCUREMENT
• Review and modify procurement channels to
reduce operating costs
• Manage product and service demand through
effective procurement approval processes
• Reduce time required in procure – to – pay
process cycle
Purchase-to-pay
processes
Strategic sourcing
• Extend strategic sourcing to complex indirect
sourcing categories / increase spend under
management control
• Review existing contracts to identify cost
savings opportunities
• Restructure supply base to take advantage of
multi-skilling/ multi-tasking
• Improve Source-to-Contract processes
 Reduced spending by
5% - 25%
Compliance
• Reduce contract leakage and maverick
purchasing
• Compliance and exception reporting process -
providing insight to "on" vs. "off" contract
purchases
• Define preferred suppliers for top spend
categories
Supply Chain Risk
Management
• Review and optimise supply chain costs
(supply chain cost analysis)
• Define supplier risk exposure and develop risk
management strategy
 Reduced cost by
5% - 10%
 Reduced cost by
3% - 8%
 Reduced cost by
5% - 20%
Sourcing and Procurement are among the top 5 areas for achieving major savings and improving
the organisation cost structure
Example Potential

3. INTEGRATINGTHREECOREELEMENTOFSPENDMANAGEMENT
Automation
of P2P
Integrated
Self Billing
Early
Supplier
Payment
If the average cost of full P2P process - £125 per transaction – Accenture
research and Best in Class is <£15 per transaction, the key question is what
are your transactional processing costs?
Significant opportunities exist to automate and simplify the end to end P2P process,
delivering major efficiency gains, improved control and creating an additional stream of
revenue
Integrate an efficient e-procurement solution
Remove the need to reconcile invoices
Use of payables solution

4. SELFBILLINGOPTION
Self
Create
Invoice
Goods
Ordered -
Requisition
Agreed Price
– Purchase
Order
Goods
Received -
GRN
All reconciliation is undertaken by Supplier
Even if Supplier queries 10% of payments,
you reduce your activities by 90%
Ideal for catalogue/ rate card pricing
Why wait to receive an invoice from a Supplier, undertake all of the reconciliation work
and authorisation activities, when ‘Self Billing’ can remove much of this effort?

5. PAYABLESSOLUTION
•Issues Payment
Instruction to Bank - EDI
Yarra
•Establishes a 16 digit
account code
•Instructs Supplier to
charge this code with
specific amount
Bank •Charges account code
with amount – full
payment of goods
supplied
•Pays Bank a Merchant
Service Charge
Supplier
• Direct contract between client & Bank
• Bank enables Suppliers to Payables solution
• Acts as a reverse style invoice discounting arrangement – Bank is providing credit to
Suppliers on the back of client’s credit worthiness
• Suppliers pay a Merchant Service Charge – negotiated direct with Bank
• Client receive a rebate based upon ‘spend’ going through process
• No financial cost to Client
• Ability to pay suppliers earlier – option to negotiate better terms
Banks are now offering innovative payment solutions that can enable organisations to
make controlled payments to suppliers earlier, thus aiding the suppliers’ cashflow,
without impacting their own cashflow position.

6. CONTACT US
xynergie Limited
Blackburn Business Centre, Davyfield Road, Blackburn, BB1
Tel: +44 (0) 845 1309031 Email: enquiries@xynergie.co.uk
Web: www.xynergie.co.uk