Procure-to-Pay Priorities Make Room for VCNs

Whether a company outsources their entire procure-to-pay (P2P) process, farms it out piecemeal, or keeps all the work in-house, they’re keeping an eye on the bottom line. And that means they’re implementing solutions to reduce operating expenses along the entire supply chain. On the payments end, they’re embracing virtual card numbers (VCNs) as a go-to supplier e-payments method. Let’s find out why.

Procurement Professionals’ Priorities

Technavio’s recent market research report, Global Procure-to-Pay Outsourcing Market 2016-2020, sheds light on how companies are bringing supply chain management up to speed. P2P outsourcing, which is expected to have a CAGR of almost 16% by 2020, is just one strategy to reach business goals, but companies teaming up with P2P vendors to handle their procurement functions are hoping to:

1. Cut costs in the procurement process
2. Modernize indirect procurement processes
3. Manage contract risk
4. Automate processes end-to-end

These priorities are undoubtedly shared by procurement leaders across the board, regardless of their strategy. But, as Technavio points out, outsourcing gives a procurement department access to talent with specialized skills, up-to-date technology delivering actionable data and process improvements, and at the end of the day, cost-savings. Plus, leveraging the expert resources of a partner enables them to focus on core competencies—which don’t necessarily include supply chain management.

Find more insights on PYMNTS.com’s Here’s What’s Driving The Procure-To-Pay Industry’s Growth and read about P2P solutions in Exploring AP Technologies: Complete Procure-to-Pay Solutions.

Whether or not they’ve explored the outsourcing option, procurement professionals are also interested in boosting strategic position in their organizations—and much of their value comes down to effective use of technology. According to The Hackett Group’s 2016 Procurement Key Issues Study, 81% of leaders want to elevate the role of procurement as a trusted advisor, 76% aim to increase spend influence, 74% want to improve agility, and 55% seek to tap supplier innovation. And while some procurement departments aren’t prepared to address these strategic areas, others are finding success after implementing innovative tech-based, data-rich solutions.

Find out why in Top Performing AP Teams Add Strategic Value Through Automation Technology

Optimizing Payment Strategies in P2P

Automation technology yields volumes of data decision-makers need to make the most of their budgets and trim the proverbial fat. As procurement professionals look for ways to improve their processes and cut costs, it’s no wonder why e-payments are becoming a more popular way to pay suppliers and other B2B partners. Aside from speeding up transactions, they’re cutting down on the administrative costs associated with manual processing, especially on the back-end during reconciliation.

And companies transitioning to an electronic environment and moving their entire supply chain management to digital solutions (outsourced, in-house, or SaaS-based) are further streamlining payments through VCNs. Detailed in How Using Virtual Card Numbers Reduces the Costs of Doing Business, VCNs fit the bill for companies that want to:

• Move toward automation
• Set transaction controls
• Lower fraud risk
• Save on overseas transactions

Because they integrate so well with existing payment processes, VCNs are easy to incorporate into a comprehensive electronic payments program alongside checks, wire transfers, ACH-based, plastic cards, and other forms of payment.

And as for lining up with procurement professionals’ priorities, VCNs bring companies closer to modernizing their payments process, managing risk, automating their workflows, and, yes, cutting costs.

For more inspiration, read Facts & Stats for Building A Business Case for Virtual Payment Tech.