In property management, efficient procurement is crucial. Having everything your site staff, maintenance teams, and residents need on hand is imperative.. But managing these purchases can be a complex and time-consuming process. That's where an optimized procure-to-pay (P2P) system comes in. Let's break down how to improve efficiency and save costs at every step, using the example of purchasing bathroom sinks for your entire portfolio.

Step 1: Streamlining Vendor Selection

Choosing the right vendors is the foundation of successful procurement. This involves not only identifying reliable suppliers for your current needs but also anticipating future requirements. Manually managing vendor information, inventory levels, and diverse property needs can lead to inconsistencies, errors, and missed opportunities.

A centralized ERP or procurement system can be a game-changer. Such a system provides a comprehensive view of inventory across your portfolio, facilitates vendor comparisons, and leverages predictive analytics to anticipate future needs. By consolidating your vendor pool and leveraging economies of scale, you can negotiate better prices and secure volume discounts.

Step 2: Sourcing & Procurement with Intelligence

Once you've identified your preferred vendors, it's time to negotiate contracts and ensure compliance with internal procurement policies. Manual sourcing can hinder your ability to secure the best possible deals and maintain a clear audit trail.

AI-powered procurement systems offer a significant advantage here. They can analyze pricing configurations, identify cost-saving opportunities, and automate compliance checks, ensuring that your vendors meet all necessary requirements and documentation standards.

Step 3: Effortless Requisitions and Approvals

The requisition and approval process can easily become a bottleneck in manual P2P systems. Requests can get lost in the shuffle, approvals can be delayed, and tracking spending across multiple properties becomes a challenge.

Automated workflows, mobile approvals, and centralized dashboards transform this step. With real-time visibility into spending patterns and budget constraints, approvers can make informed decisions quickly. Imagine a property manager needing 200 bathroom sinks for a new building – the system can instantly show available inventory, budget availability, and trigger the necessary approvals. This not only accelerates the process but also helps prevent maverick spending.

Step 4: Accurate Goods Receipt and Verification

Ensuring that you receive the right goods in the right quantity is essential. Implementing a three-way matching system (purchase order, receiving report, and invoice) adds a layer of accuracy and accountability. Automated systems can streamline this process, ensuring timely delivery verification and prompt payment to vendors.

Step 5: Automated Invoice Processing

The volume of invoices in property management can overwhelm accounting teams. Manual invoice processing is slow, prone to errors, and can lead to late payments and strained vendor relationships.

Encourage electronic invoice submission and leverage automated invoice matching to streamline this step. The system can automatically extract invoice data, match it to the corresponding purchase order and receiving report, and route it for approval.

Step 6: Seamless Approvals and Payments

Late payments damage vendor relationships and can incur unnecessary fees. Automated payment processing eliminates these risks. Once an invoice is approved, the system can automatically trigger payment via ACH or, even better, virtual card.

Virtual cards not only eliminate check printing and mailing costs but can also generate rebates, contributing to significant cost savings. Furthermore, automating payment processing reduces labor costs associated with accounts payable, freeing up your team for more strategic tasks.

The Bottom Line

By optimizing your P2P process with the right technology and automation, you can transform procurement from a source of frustration into a driver of efficiency and cost savings. From selecting the perfect bathroom sink to ensuring timely payments, an improved P2P process empowers your teams, strengthens vendor relationships, and contributes to the overall success of your property management operations.

Learn more

To learn more about implementing a successful procure-to-pay process at your organization, check out our latest ebook, Mastering the Art of Procure-to-Pay.