New Best Practices Reveal Key Drivers of Procure-to-Pay Process Efficiency and Cost Savings
"Automating corporate expense management through the elimination of paper-based processes and labor-intensive activities is becoming an increasingly important source of new efficiencies and cost savings for today's business," said Darren Parslow, Global Head of Commercial Solutions, Visa Inc. "The P2P best practices can help companies identify needed improvements and boost the efficiency of their expense management processes so they can actually realize those cost savings."
The P2P process is defined as a procurement spectrum that includes sourcing, order placement, payment, settlement, reconciliation, control, audit and reporting. More than 60 individual best practices identify several factors contributing to the improvement of the P2P process, including:
-- Automate the P2P process from start to finish
-- Create visibility and mainstream commercial payment initiatives with active senior management support
-- Make P2P a center of excellence within the organization
-- Establish a commercial card program management framework
-- Integrate the card program into enterprise-wide performance management initiatives
-- Designate a commercial card for company meetings-related expenditures
-- Create a formal supplier management function
-- Develop an integrated controls strategy
-- Use sophisticated reporting and spend analysis tools
"As a leading B2B payments provider, Visa is committed to monitoring current trends and developing best practices relating to the use of commercial cards as an effective corporate expense management tool," said Jennifer Steinman, Principal, Deloitte Consulting. "This study, conducted by Deloitte Consulting on behalf of Visa, provides a current view of what leading edge companies from across the globe are doing to streamline their internal processes and maximize the return from their commercial card programs."
Efficiency Driven Cost Savings
The study also found that following P2P best practices can lead to significant efficiency-driven cost savings resulting from process streamlining. For example:
-- A $30+ billion global media and entertainment company achieved over $100 million in annual cost savings by strategically sourcing direct and indirect spend categories.
-- An $800 million global manufacturing company was able to reduce its supplier base by 70 percent while consolidating 80 percent of its overall spending with a select group of suppliers.
-- A $2.5 billion global technology company was able to significantly reduce its reliance on costly and outdated paper-based payment processes by shifting 85 percent of its payments to more efficient and cost-effective electronic payment methods.
Visa's best practices are a central element of the company's overall commercial card program optimization tools. These tools consist of various knowledge-based research and services designed to help businesses optimize their commercial card programs for best results and cost savings through improved process efficiencies. In addition to the commercial card best practices, the optimization tools include spend analysis, benchmarking analysis tools, e-procurement card integration recommended practices, identification of Visa-accepting suppliers and other tools.
Notes to Editors:
Study Methodology: Visa's 2008 Global Procure-to-Pay and Commercial Card Best Practices Study builds upon an original Visa best practices study from 2002. It was conducted by Deloitte Consulting in 2007 and included 90 in-depth interviews at more than 60 large and mid-sized companies worldwide. The evaluation of the P2P process included sourcing, order placement, payment, settlement, reconciliation, control, audit and reporting activities. Fifty two percent of study participants were from the United States with the remaining participants representing regions from across the globe. The majority of study participants were from the manufacturing, consumer products and healthcare industries, followed in descending order by technology, energy/utilities, financial services, transportation, public sector and communications. A summary of the study results can be found at www.visa.com/procuretopaybestpracticestudy.
About Visa Inc.: Visa Inc. operates the world's largest retail electronic payments network providing processing services and payment product platforms. This includes consumer credit, debit, prepaid and commercial payments, which are offered under the Visa, Visa Electron, Interlink and PLUS brands. Visa enjoys unsurpassed acceptance around the world and Visa/PLUS is one of the world's largest global ATM networks, offering cash access in local currency in more than 170 countries. For more information, visit www.visa.corporate.com.
SOURCE: Visa Inc.