It goes without saying … every company today is looking for ways to cut costs quickly.

Companies that still handle and process paper invoices are ripe for cost reduction.

Some companies believe that somehow scanning invoices will reduce manpower requirements in AP. Many have been disappointed with this approach.

That leaves automating the AP process with the right combination of eInvoicing, Invoice Portals, Workflows, and imaging … depending on Suppliers’ preferences.

These preferences can be heavily influenced by how fast Suppliers get paid and how much effort is required by you to process their invoices. Invoices sent and received electronically can, of course, be paid quickly and efficiently. Paper invoices, not so much.

The alternative is outsourcing.

There really are only two viable alternatives: outsource or automate. It’s up to you.

Everyone agrees that in order to increase ROI from a P2P implementation, suppliers must be on-boarded quickly and efficiently. What does this mean and how is it done?

First, on-boarding means allowing the Buying company to place orders electronically, access electronic supplier catalogs, and receive invoices electronically.

It should be noted that connecting to a Global Network with thousands of suppliers does not necessarily mean you have “on-boarded” your suppliers. If you do happen to find your suppliers on a Global Network, it may just mean they can receive an emailed PO from a buyer.

Even if your software provider offers a supplier network, expect to do some heavy lifting to get your suppliers, your catalogs, the suppliers invoice preferences (paper or electronic), and payment preferences set-up in your P2P system — either you or your software suppliers will need to do this.

Supplier networks are not all they’re cracked up to be. As one company recently put it, “If you’re going to connect with a Global Procurement Network, expect to do a lot of work yourself.”

Using “The Carrot” approach is essential if you can’t get strong, consistent Top Management support for your P2P initiative.

The first thing you’ll want to do is figure out how to answer this end-user question, “If I use the P2P system, what’s in it for me?”

Benefits typically include faster delivery, self-service order/invoice status inquiries (No more need to call AP or Purchasing for status!), easier invoice approval, and/or better reporting.

One of our clients reports that in this bad economy, people are calling the Purchasing Department to get spend data. With pressures on budgets, actual vs. budget data is increasingly important. The P2P champion is using this fact to encourage people to use the system, and thereby get more accurate, comprehensive spend data on a timely basis.

Second, embark on an education and communications effort (PR) with internal groups and suppliers. These folks ought to understand the big picture. The company is doing this to save money and improve spend visibility — profitability, cash flow, and ultimately jobs are tied to this initiative.

Coffee mugs and tee shirts are not needed for this PR campaign! Tools like webinars, surveys, company web sites, and P2P Portals can be used to communicate with end-users (and suppliers).

Third, make it easy for people to use the system. This would include the ability to requisition/order anything and everything from one P2P system. This should handle ordering not only from a catalog, but free-form, and services. The objective is to make it so easy that you’ll capture all spend.

Other tactical steps might include using an Administrator to use the system on behalf of a group of unwilling end-users. Reducing the number of approvals should also be considered to make it easier to use the system. With comprehensive audit trails, it no longer should be necessary to get six approvals on a single Requisition, Order, or Invoice.

In addition to training courses, our clients have designed laminated “cheat sheets”, Computer Based Training courses, “Talking PowerPoints”, and incorporated “How to’s” on the Intranet site used by Purchasing or AP.

If it’s not easy to use and you don’t invest in education, training, and PR, the P2P system will eventually collapse.

Next: Using “The Stick” to force users to use the P2P system