For a payments guy like me, “Procure to Pay” is a strange industry term
Within large businesses, there is often a function called procurement. Procurement is the function of buying goods and services that support the business itself. From office supplies, to product materials, to telecommunication services that support the business’ back office operations, the Procurement team is responsible for sourcing suppliers, negotiating prices, and managing contracts. Large businesses are continually challenged with centralizing the procurement function in order to maximize volume discounts and ensure compliance with approved goods and services.
In support of centralization and compliance, there is a service industry called Procure to Pay. In some instances, a Procure to Pay service helps consolidate information related to a business’ purchases, typically through an internal e-commerce shopping experience. What is strange to me is that so many of these Procure to Pay solutions are not involved in the “pay” portion of the service. An outsider would expect that the service cover everything from procurement through to payment as the name implies.
In the more recent evolution of Procure to Pay, many service providers have in fact moved into providing payments as part of their service. There is a long way to go in this evolution as the payments only apply to certain portions of procurement or they only involve a certain payment method, which fails to maximize efficiency for the business’ overall procurement universe. In most cases a business is still sending out checks to pay the suppliers that are being managed through a Procure to Pay service. Optimizing the mix of payment methods to include ACH, virtual cards and private network payments is key to delivering a fully efficient Procure to Pay service.
At EML, we are interested in helping Procure to Pay service providers deliver on their naming convention. That is, maximizing efficiency for both the procurement component and the payment component of “Procure to Pay.” We are enabling over a dozen related industry service providers to maximize the efficiency of payments for their clients from Procure to Pay, to A/P Automation, Claims Processing, A/P Outsourcing, Bill Payment and Business Process Outsourcing.