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Corporate Credit Card Policy: What is it & How to Create One

Leen Shami

October 26, 2022

5

Corporate cards are a great way to manage your spending, control expenses, eliminate petty cash, and, most importantly - give your employees the freedom to focus on their work without any blockages.
But for everything to work smoothly and for everyone to know how to use your corporate cards, you must establish some ground rules.

What is a Corporate Credit Card Policy?

A corporate credit card policy entails the protocols and terms and conditions of use associated with a company credit card issued in an employee's name. A company credit card policy protects businesses and companies from unauthorized payments and inappropriate use by outlining the repercussions and consequences of such actions.

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Why Do You Need a Corporate Credit Card Policy?

In the same way, companies have a travel and expense policy; they have a corporate card policy. A company credit card policy is set in place to ensure all company cards are used for authorized and permitted business purchases.

In a corporate credit card policy, the guidelines, responsibilities of the cardholder, dos and don'ts, and repercussions of misuse are outlined. This ensures that all business finances are regulated.

While it is important to have a corporate credit card policy, Pluto takes the extra step to ensure all transactions and purchases are pre-approved, regulated, and permitted by:

  • Creating Pluto cards that can only be used with specific vendors
  • Setting daily, weekly, or monthly limits on cards
  • Having an approval workflow to make sure the necessary departments are approving all transactions
Credit Card
Creating a corporate card with Pluto

Which Employees are Eligible for a Corporate Credit Card?

It is essential to note which job roles are eligible for a company credit card to protect your business against accusations of favoritism or discrimination.

A company can decide whether all employees, c-suites, or department heads are eligible for corporate credit cards.

Typically, companies only give executives, VP levels, C-suite, and salespeople access to company credit cards. However, there are situations where employees who are not eligible for a company credit card may have to pay for business-related expenses, such as plane tickets. In this case, the employee would ask their manager to pay for such an expense with the corporate credit card, or they will have to pay using their personal credit card or cash and file a reimbursement, which will be reimbursed with the next paycheck.

 With Pluto's expense management platform, a company does not have to worry about corporate credit card eligibility or the hassle of employees filing reimbursements.

Using Pluto's platform, the business will have access to unlimited corporate cards, meaning any employee can be issued corporate cards with spend limits, approval workflows, and category-specific purchases. This results in no overspending and knowing all transactions are pre-approved and authorized due to the card only being accepted at allocated vendors.

Suppose an expense is made using cash or a personal credit card. In that case, the employee can snap a picture of their receipt and have it approved on the spot with Pluto's Whatsapp reimbursement feature, making it easier for finance teams and employees to sort through reimbursement receipts!

Corporate card message
Pluto's Whatsapp Reimbursements

Components of a Corporate Credit Card Policy

When creating a corporate credit card policy, the credit cards intended to be used, the credit card provider's requirements, and the company's needs should be known.
In most cases, corporate credit card policies include the following points as part of their corporate credit card policy:

1. Employee Credit Card Agreement

When issuing a corporate credit card to employees, an employee credit card agreement must be signed to ensure that employees understand the card belongs to the company, regardless of the employee's name on the card.
The agreement will also state that the company credit cards can only be used for business-related expenses, where the company can investigate charges, if necessary.

2. Permitted Types of Expenses 

The types of transactions that can be made should be stated clearly in the company credit card policy: work-related expenses only. These include, but are not limited to:

  • Meetings with clients
  • Work-related travel (e.g., flight ticket, accommodation)
  • Educational material
  • Software subscriptions
  • Legal document expenses
  • Business meals

While tending to the above is a good way to ensure company credit cards are being used for business-related expenses, Pluto offers cards that can only be used for specific vendors, such as fuel cards, to avoid mishaps or fraud.

Corporate card fuel expense
Vendor-specific purchase cards

With these policies and procedures in place, employees should note that if an instance occurs where the company credit card is used for non-authorized transactions, personal expenses, or cash withdrawals, they will be faced with disciplinary action.

The disciplinary action could result in the following:

  • Cancellation of the company credit card
  • Withdrawal of corporate credit cards privileges
  • Recovery of funds from employee's salary
  • Termination of employee contract

3. Exceptions

In some cases, an employee cardholder may incur an expense that is not usually permitted under the company credit card policy. To be able to do so, the company credit card policy should indicate how the cardholders can apply for an exception and get permission for such expenses.
While doing so, the company should also outline specific transactions that can never be made using the company credit card.

4. Spend Limits

The spending limits on a company credit card usually depend on the employee's job and level of seniority. The company credit card policy should clarify the card's limits when receiving a new card.
In general, businesses can choose to have limits established based on transactions per-item or on a cumulative basis. However, not all employees will have the same spending limits.
With Pluto, you can set spending limits on virtual or physical cards before issuing them to ensure that employee spending stays within their budget.

Corporate card new card creation
Set spend limits on Pluto

5. Temporary and Permanent Limit Increase

To get a limit increase on a company credit card, the cardholder must fill out a form stating why they need a limit increase on their card and whether it is a temporary or permanent limit increase. The form will then have to be signed by the employee's manager and sent to the company credit card provider for processing.
Although it is possible, the process of getting a limit increase on a company credit card may take quite some time. Pluto allows managers, administrators, and finance teams to increase limits on virtual or physical company credit cards in seconds.

Corporate card limit
Edit spend limits on Pluto in seconds

6. Approval Requests

A company credit card policy must show how approval requests work when using a corporate credit card. Usually, approvers are responsible for reviewing all transactions regularly. By doing so, the following is warranted:

  • The transaction or expense adheres to the company credit card policy
  • A receipt is attached to the transaction made
  • The description of the transaction follows the details mentioned above

Pluto takes the extra mile to automate approval workflows and receipt reconciliation. With Pluto, all approval requests will be made through the Pluto platform, and receipts will be collected through Whatsapp as soon as a transaction is made.

Corporate card request
Approval workflows on Pluto

7. Cardholder Responsibilities

Including the cardholder's responsibilities in the company credit card policy is an essential part of the document. The purpose is to describe how employees can ensure they use their cards appropriately.

It's important to include that:

  • Cards cannot be used for personal expenses
  • Cards must only be used by the cardholder to help avoid fraud 
  • Cards and PINs must be stored in a safe place
  • Cards must be reported as stolen and lost as soon as possible
  • Document all expenses and send monthly reports

8. Policy Violations

Employees are expected to comply with the corporate card policy. If the cardholder violates the terms stated, disciplinary action will be taken against the employee.

The disciplinary action can include:

  • Face a written warning for violating the corporate credit card policy
  • Pay for the expenses yourself if you've used the card for any inappropriate use
  • Lose the right to have a corporate credit card if you lose a receipt or violate the policy
  • Suspension or termination of employment if you give the company credit card to unauthorized people or abuse the expense limits
  • Loss of company card privileges if expenses are not submitted on time
  • Legal action and termination can be imposed if prohibited purchases are made using the company credit card

How Can a Corporate Card Policy Prevent Fraud?

Globalization and remote work have increased the risks of card fraud and identity theft. A proper corporate credit card policy will minimize these risks and ensure that your corporate funds are safe.

1. Flexible limits

With Pluto, it is effortless to set card limits in real-time, so decreasing the spending limit when needed can be done in a matter of seconds. This ensures that a card is not over-exposed. If the card details were compromised, the perpetrator would not be able to withdraw any big sums.

2. Limited users

You can see all the cardholders from your Pluto dashboard and create additional cards if needed. This prevents sharing card details between the employees, as it is simply not needed anymore. The cards are used by authorized personnel, who are aware of the proper use and policies - further preventing any potential fraud and leaks.

3. Vendor-specific cards

Pluto allows you to create a card for a particular transaction, purpose, or project. This will enable you to allocate a certain amount of money that can be spent on the card, meaning the risks of any authorized charges, re-bills, or other online scams are non-existent.

4. No petty-cash

In a bigger organization, petty cash can be an issue as it is easy to defraud. Even when used properly, it is a pain to keep track of. Petty cash is no longer a problem with Pluto corporate cards, particularly when you can issue as many corporate p cards as you need with Pluto seconds (specifically 9 seconds).

The Value of a Corporate Credit Card Policy

Company card policies control employee spending, ensure compliance, and minimize fraud risk. It's even easier to maximize your results by integrating it with Pluto's expense management software.

By integrating with Pluto, you can:

  • Issue unlimited corporate cards
  • Digitize receipt reconciliation
  • Reimburse in seconds
  • Review all transactions in real-time
  • Approve expenses in an instant
  • Minimize the risk of employee fraud

Key Takeaways

A corporate card policy will help you to establish ground rules that will keep things running smoothly but, at the same time, will not limit your employees in their day-to-day work.

Ensure everyone who will have the card is aware of the rules. The great thing about using Pluto is that you can make your corporate card policy very simple, as Pluto has all the tools to manage your spending and keep everything under control.

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Learn how Pluto is helping Keyper        to eliminate petty cash spending and optimize spend management

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At Pluto Card, our mission is to assist businesses of all scales make well-informed choices. To uphold our standards, we follow editorial guidelines to guarantee that our content consistently aligns with our high-quality benchmarks.

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Procurement
November 2, 2023

Mohammed Ridwan

Why A Legacy ERP Is Not Enough For Modern Procurement Teams

In today's fast-paced business environment, most organisations rely on Enterprise Resource Planning (ERP) systems as foundational tools to manage and integrate various business processes. ERPs traditionally offer a broad spectrum of functionalities, assisting in handling essential operations such as procurement, data management, accounting, and supply chain management.

ERP systems provide a comprehensive suite of software functionalities to enhance and optimise various aspects of business operations. Over time, these systems have evolved, shifting from on-premises solutions to cloud-based platforms. However, organisations still face challenges when implementing ERP solutions across their enterprise.

One significant aspect often overlooked in ERP systems is their limitation regarding financial operations & intelligence. ERP solutions primarily focus on improving business processes and management but do not directly handle monetary transactions or provide financial products. This necessitates the integration of external financial institutions and banks with ERP systems.

Moreover, traditional ERP systems struggle to keep pace with the dynamic demands of modern procurement, particularly in the ever-evolving supply chain environment. Today, ERP systems need to be more proactive, incorporating features like real-time analytics and flexible processes to meet the ever-shifting requirements of procurement. Adapting to these changes is essential for businesses aiming to enhance their procurement efficiency and agility.

ERP Systems vs Procurement Solutions: How Are They Different?

ERP systems were initially designed to automate business processes and offer insights for internal controls, while procurement solutions comprehensively manage the ecosystem.

A P2P or a procurement solution is primarily built to meet an organisation's procurement and supply chain needs, an arena always problematic for traditional ERP.

Innovative organisations are now adopting leaner and cheaper solutions for their procurement processes. These tools can deftly handle specialised tasks and yield instant results.

Limitations of ERP

Factors like market volatility, evolving work dynamics, and shifting supply chains have made it challenging for businesses to integrate their procurement processes into their current ERP systems. Hence, it is vital to use specialised solutions to cater to dynamic business processes.

But before exploring the benefits of specialised solutions, let us consider the limitations of ERP:

Long Implementation Duration that Impedes ROI

Customising legacy ERP to meet procurement or supply needs is a hassle. It contributes to a longer implementation duration lasting several months. Customisation projects are resource-intensive. That makes a fast ROI virtually impossible to achieve.

Moreover, businesses must hire ERP consultants or trained partners for the implementation. The success rate and the implementation duration heavily depend on the expertise of such third parties.

With many companies already strung tight regarding capital, implementing legacy ERP to function as procurement systems may prove counterproductive.

Expensive Implementation and Maintenance

Legacy ERP licenses come at a high price. Depending on your software, ERP implementation costs can range from $150,000 to $750,000.

Moreover, procurement processes almost always require extra modules that can further increase costs. It also includes the additional burden of maintenance costs and training employees to use the software.

Failures To Meet Business Goals

The success rate of ERP implementation is dwindling. Recent studies from Gartner indicate that the failure rates of ERP implementations can exceed 75%. McKinsey, a reputed global consultancy, supports this claim as it quantifies the failure rate of all digital transformations to be higher than 70%.

One famous example is Hershey's ERP implementation failure in 1996 as they set out to replace their legacy IT systems with an integrated ERP environment. They chose SAP's R/3 ERP software, and an implementation time of 48 months was recommended, which was later cut down to 30 months. The result - a $10 million investment leading to a loss of $150 million in revenue, a 19% reduction in share price, and a 12% loss in international market share.

With such massive costs and periods involved in achieving numbers from legacy ERP solutions, using specialized procurement systems can make achieving business objectives far easier.

Lack of analytics and insights

ERP systems often fail to deliver the necessary analytics and data for effective operations. Managing vast volumes of data within these systems can be daunting. Challenges include ensuring data quality, the lack of real-time insights, limited data analysis capabilities, and integration issues with other software applications.

Poor User Experience

Many ERP systems require makeshift solutions to modify their functionality according to user demands, leading to frustration with end-users.

Legacy ERP systems are notoriously complex, making them challenging for end-users. Frequently, users must navigate between multiple interfaces, hindering productivity and adoption.

Furthermore, the lack of mobile apps and scattered functionalities exacerbate the issue—problems that a dedicated procurement solution can readily address.

Complex User Interfaces

ERP systems offer enterprise-grade capabilities, yet their inherent complexity and poor user experience pose significant challenges. Users often struggle with confusion, as traditional ERPs are overly intricate. The need for add-ons further exacerbates the complexity, as these additions must seamlessly integrate with the existing ERP system. This constant juggling of different user interfaces not only hampers productivity but also hinders widespread adoption.

Compromised Collaboration

One of the most disappointing aspects of legacy ERP systems is the lack of in-built communication channels. ERP systems struggle with establishing themselves as a medium of dialogue between internal business users and external suppliers, as they are not accessible from outside the business network. It tangles communication channels through unnecessary phone calls and scattered information exchange lines.  

They are also severely limited in their capacity to maintain supplier pipelines, requiring most data to be entered and managed through several spreadsheets.  

Urgent reports, design changes, and other important information cannot be communicated promptly, which may lead to losses. It leads to unnecessary time consumption and inaccuracies.

Solving ERP Issues with Dedicated Procurement Solutions

Addressing the limitations of ERP systems, organisations are increasingly turning to dedicated procurement solutions to streamline their purchasing processes and enhance efficiency. These specialised solutions offer advanced analytics, real-time insights, and improved data quality, making it easier for businesses to manage their procurement operations effectively.

By integrating dedicated procurement solutions with their ERP systems, organisations can bridge the gap between data management challenges and their need for comprehensive procurement intelligence, ultimately driving better decision-making and cost savings.

Addresses Overspending Issues

Integrating P2P software with ERP can prevent overspending in procurement. By harnessing ERP with eProcurement solutions, you can efficiently assess expenses across purchasing categories.

It allows you to manage budgets and increase savings. Moreover, integrating procurement solutions with ERP simplifies procurement management by automating approval processes.

Boosts Vendor Collaboration

Vendor collaboration is one of the most essential aspects of procurement. Keeping them informed of the relevant business operations helps avoid miscommunication.

By integrating procurement solutions with ERP systems, buyers and suppliers can access real-time data, empowering them to make informed decisions. This integration brings advantages such as:

  • Enhanced collaboration: Seamless collaboration between buyers and sellers, achieved through transparent access to purchase orders, invoices, and receipts.
  • Supplier empowerment: Suppliers are empowered with real-time insights into payment statuses via a supplier portal, which enables sound financial planning.
  • Stronger buyer-supplier relationship: Heightened transparency nurtures and strengthens the critical relationships between buyers and suppliers, a fundamental cornerstone for any successful business.
  • Improves Scalability and Flexibility

As businesses expand, stakeholders must seek platforms that can swiftly adapt to increased operational demands and changes in the operational cycle.

Procurement software provides essential features like mobile and remote access that most businesses require to scale operations. It also allows businesses to create highly specialised and efficient platforms, saving money, time, and human resources.

Helps Eradicate Duplication Issues

Procurement solutions can help connect all departments to ensure office supply orders are placed through a centralised system. They help share real-time data across tech, IT, finance and accounting, HR, sales, and marketing teams. It helps prevent duplicate purchases by coordinating buying across departments. Improved coordination also allows teams to maximise discounts and negotiation opportunities while saving time, money, and effort.

Reduces Procurement Errors Through Automation

Specialised software can help organisations optimise deals, accelerate processes, and reduce errors through automation. It helps allocate repetitive and simple tasks to the system rather than to users.

For example, businesses can automate their supply ordering with this technology. Automation helps set limits to ensure timely orders, prevent shortages, and follow any restrictions they have in place.

Handles Compliance and Risk Management Issues

Managing procurement-related risks and complying with regulations can be pretty challenging. An ERP-procurement integration empowers the software to handle compliance matters and mitigate risks during procurement processes, even involving multi-currency transactions.

Supplier Performance Management

Managing supplier performance during the procurement process can be quite challenging without the right tools at your disposal. However, by integrating procurement software with an ERP system, you can simplify collecting and analysing data related to supplier performance.

This valuable information encompasses delivery times, product quality, and responsiveness, enabling you to decide whether to maintain or end supplier relationships.

Inventory Management

Inadequate inventory management can result in too much or too little stock. These outcomes affect working capital and operational efficiency. One practical approach to tackle this problem is integrating procurement solutions with ERP systems. Such integration offers benefits like:

  • Real-time visibility into inventory levels, allowing for monitoring.
  • Automated reordering process, reducing the burden on manual efforts.

For example, a supermarket chain can leverage sales data to automate the reordering of items, minimising waste and ensuring the availability of products.

Provides Analytics for Better Insights

By integrating procurement solutions with ERP, businesses gain a flexible data model capable of handling big data. It manages the data and offers valuable insights to enhance information generation, storage, and decision-making. Procurement software encompasses advanced spend analytics, supplier benchmarks, and comprehensive performance management.

Drastically Improves End-User Experience

Procurement solutions are built from the ground up, keeping procurement operations as the top priority. It helps avoid a cluttered, mismanaged UI that comes with legacy ERPs, enabling users to be more productive.

End-users can adapt to changes in the software much quicker, increasing efficiency.

Conclusion

Procurement and sourcing processes require a dedicated platform in 2023. Unlike legacy ERP, such dedicated solutions can handle complex sourcing and procurement operations. They ensure a streamlined and seamless flow of relevant information between internal business organisations and external suppliers, allowing all stakeholders to have complete project visibility.

The outcome of implementing a smaller yet far more efficient tool will facilitate faster time to market, subsequently letting you achieve your ROI at an expedited rate.

While customising an ERP may sound enticing, opting for an eProcurement solution is smarter.

5
All
Procurement
November 23, 2023

Mohammed Ridwan

Top 9 Procure-to-Pay Software for Enterprises

You want a procure-to-pay (P2P) software that automates your procurement process and addresses issues like lack of visibility, double payments, and delayed approvals. However, since such a tool has multiple users at different hierarchies and a complex workflow, you often end up with a more complex process if you don’t choose the right software. 

With ad-hoc processes, many issues pop-up: employees wait weeks for approvals, procurement teams have no real-time visibility over purchase requests and don’t know how to prioritize, finance teams get minimal control over expenses, and the entire process is chaotic. Hence, choosing the right procure-to-pay solution requires a focus on ease of use and flexibility. 

In this post, we will share the best procure-to-pay software for businesses in the UAE. We will discuss how P2P software helps with procurement management and which tools are worth considering. 

What is Procure-to-Pay Software?

Procure-to-pay software is a tool to automate the complete procurement process, which combines accounts payable (AP) software and procurement software.

Instead of having your procurement processes and data scattered across emails, Jira, different task management tools, and custom ERPs, you bring it onto a single platform. 

Procure to Pay software

By moving from your legacy tools to an automated P2P software, you can:

  • automate approval workflows, making the purchase request (PR) process easier and faster. Flexible approval workflows enable all stakeholders to approve requests with a trigger-based flow. 
  • integrate with ERPs to maintain a preferred vendor list and manage order items. While most P2P software supports record-keeping only, some allow the conversion of PRs to purchase orders (PO) automatically after approval.
  • match the goods received note (GRN) to enable two-way or three-way matching and ensure proper inventory and timely vendor payments. 
  • process payments with multiple payment options to avoid delays and foster vendor relationships. It also helps avoid double payments, underpayment, or overpayment. 
  • reconcile data faster via integrations with accounting software, enabling more visibility and control. Accounting teams get the right documents, and finance teams get visibility over expenses.

Since legacy ERPs aren’t enough to manage your entire procurement process, adding P2P software makes purchasing and payments easier. 

Top 9 Procure-to-Pay Software

Here is a procure-to-pay software list for companies in the UAE: 

1. Pluto

Procure-to-Pay software by Pluto

Pluto is an all-in-one procure-to-pay solution to transform your procurement and AP processes. It sits on top of your ERP as a layer to manage the multiple stages of the procurement process. From automating PRs to setting multi-layer approval workflows and managing vendors, it is the ultimate solution to transform a chaotic procurement process into a faster and more efficient one. 

Key Features:

  • Features fully customizable workflows for raising PR and POs, requiring no technical expertise
  • Offers a flexible approval engine capable of managing intricate hierarchies
  • Enables multi-layer invoice approvals with policies to align with your company's structure
  • Ability to upload invoices easily via WhatsApp images, eliminating the need to search for invoice details. Also facilitates invoice capture via emails directly to speed up the receipt capture process
  • A centralized dashboard to gather bills in one place and track the status to avoid double payments
  • Vendor-specific corporate cards to control budgets and detect irrelevant expenses
  • Supports local and international wire transfers to make payments 
  • OCR technology minimizes manual data entry by creating and populating bills from invoices
  • Supports ERP integration to synchronize your vendors, POs, and bills and integrates with accounting software, such as Oracle, NetSuite, Zoho, Quickbooks, Wafeq, Xero, etc.
  • Integrates with payment gateways and accounting software for seamless payments and reconciliation (a feature not available in other solutions)
  • Raises alerts for upcoming payments and enables scheduling payments in advance and automate invoices 
  • Provides a complete audit trail of the process to ensure visibility at each step
  • Shows real-time analytics to facilitate deep insights for supporting budget control

Pricing: 

Request the sales team for a custom quote

Pros:

  • More financial control with vendor-specific corporate cards 
  • Better Forex rates than most local banks 
  • Multiple integration options including Netsuite, Dynamics and more

Cons:

  • Slightly longer on-boarding due to unlimited corporate purchasing card offering 
  • Directly integrates with all other major ERPs except Tally

2. Order.co

Procure to pay solution by Order

Order.co is a procure-to-pay platform that provides you access to over 15,000+ vendors in addition to your preferred vendors. It acts as an online marketplace like Amazon or eBay to help you procure items for your business. You add items to the cart, and it enables a rule-based approval system for POs with complete control and visibility. 

Key Features:

  • Provides a custom, pre-approved Order.co catalog, including your current vendors and a vast network of 15,000+ vendors
  • Supports purchases from multiple vendors regardless of their ordering methods (API, website, email)
  • Sources the best prices for your needs to automatically generate POs and set up recurring orders to save time and reduce manual errors
  • Offers real-time budgeting and reporting insights by the user, location, cost center, or vendor
  • Simplifies payment processing by consolidating all orders from multiple vendors into one monthly invoice

Pricing:

Dependent upon locations and usage; contact hello@order.co for pricing information

Pros:

  • Customizable product lists for ordering 
  • Easy-to-create customizable workflows
  • Ability to categorize purchases and run reports

Cons:

  • Set up is confusing and requires customer support help
  • Can not order from multiple vendors at the same time

3. Yooz

Procure to pay platform by Yooz

Yooz optimizes the procurement process by focusing on invoice management.  It is suitable for mid-size companies of all sectors wanting to automate procurement with a cloud-based procure-to-pay solution. It uses artificial intelligence (AI) and machine learning (ML) technologies to enhance security and control in their account payable automation software.

Key Features:

  • Enables online, real-time management of supplier relationships, improving communication and collaboration
  • Provides mobile access for invoice approval and communication
  • Maintains regulation-compliant traceability, ensuring adherence to relevant laws and standards
  • Automates real-time general ledger (GL) coding and PO matching
  • Captures all types of documents through various channels, such as email, drag and drop, mobile, scan, and secure file transfer protocol (SFTP)
  • Integrates with accounting software and ERPs
  • Allows users to approve and pay invoices in batches, offering multiple payment options, such as virtual credit card, ACH, e-check, and paper check
  • Offers a range of services, including consulting, configuration, training, and user support

Pricing: 

Free trial for up to 15 days followed by a "pay-as-you-use" model. Also offers “gold edition” subscription pricing (based on the volume of documents) for an unlimited number of users and 4 hours of complimentary service

Pros:

  • Integrates with Sage Intacct
  • Ability to tag people in the comments and email them directly from the invoice
  • Numerous criteria available for setting up the approval workflows

Cons: 

  • Doesn’t offer payment services in the UAE, so you need to carry out payments on a different platform
  • Doesn't have integrations with major vendors as a form of punchout
  • Time-consuming to download and export files
  • Hard for vendors to send the invoices through Yooz

4. Kissflow

Procure to pay solution by Kissflow

Kissflow simplifies and enhances procurement processes while ensuring transparency and compliance. It helps users automate the entire process without requiring technical expertise or coding experience. It comes with 50+ ready-to-use applications, enabling unlimited automation applications.  

Key Features:

  • Offers fluid forms to enable easy capturing, approval, and tracking of PRs
  • Allows users to register and maintain vendors with access to multilingual catalogs
  • Integration with accounting systems, ERPs, and finance systems like Quickbooks, SAP, and Microsoft Dynamics 
  • Accelerates the invoice approval process with timely alerts and automated checks. Connect invoices to contracts, POs, and service entry sheets in a single dashboard
  • Customizable reports to visualize data using charts, filters, and heatmaps
  • Ability to define and manage budget restrictions with dynamic rules throughout the entire procure-to-pay lifecycle
  • Customized approval workflows to ensure transparency with rule-based approval processes
  • Smart alerts that provide real-time updates on the status of POs and invoices to keep stakeholders informed 

Pricing: 

Starts at $2499/month (billed annually). Pricing varies based on transaction volume and number of users

Pros: 

  • Intuitive interface with a relatively short learning curve

Cons:

  • Does not support payment flows in the UAE
  • Cost of its license is high (particularly for SMBs)
  • Can not handle intricate processes that require a high degree of customization or involve multiple conditional branches
  • Customization options are limited, including specific integrations, advanced business rules, or more sophisticated automation capabilities

5. Coupa

Procure-to-pay software by coupa

Coupa is a cloud-based automation platform to manage procurement processes. It facilitates supply chain optimization by providing visibility and control. It brings consumer shopping ease to the procurement process. With a focus on user adoption, it provides an intuitive shopping experience for employees, making it easier to adhere to pre-approved spending guidelines.

Key Features:

  • Simplifies procurement by allowing organizations to track pre-approved spending and get real-time visibility into POs and order lifecycle
  • Maximizes pre-approved spend to offer complete visibility over the purchase-to-pay processes
  • Promotes user adoption at all levels with an easy-to-use interface, creating value for both employees and vendors
  • Provides a centralized platform within Coupa Procure, allowing easy comparison of items across multiple vendors
  • Offers real-time budget management with budget meters, allowing organizations to assess budget sufficiency before committing to spending
  • Employs AI and machine learning to detect errors and fraud across business spend
  • Enables quick notifications of disruptions and allows vendors to confirm availability, minimizing unplanned downtime
  • Provides real-time visibility into inventory availability, helping organizations reduce redundant and wasteful spending

Pricing: 

Request the sales team for a custom quote

Pros:

  • Several categories and filters in the analytics section to streamline data
  • Chat option enables approver and claimant to discuss issues with receipts
  • Enables setting up of customized approval chains and including additional new approvers  

Cons:

  • Lots of unnecessary notifications, making it difficult to select the ones that need action or comment
  • Low receipt searchability, making retrieval time-consuming
  • Inconsistent syncing of remit-to address from NetSuite
  • Complex to implement and not intuitive, forcing admins to spend more time resolving employees' queries
  • Slow customer service 

6. Esker

Procure to pay platform by Esker

Esker is a cloud-based automation procurement software. It helps you optimize procurement processes and collaborate strategically with your vendors. With the ability to integrate across various company departments, it simplifies user adoption while facilitating visibility and control.

Key Features:

  • Facilitates approval mechanism and GRN matching for each PR and invoice 
  • Offers real-time analytics, enabling you to maintain tighter budget controls
  • Gives access to products from preferred vendors, aligning purchases with company procurement policies
  • Provides a self-service portal, facilitating supplier onboarding, catalog management, and invoice status access
  • Customizable dashboards to manage daily tasks, monitor productivity, and identify issues and opportunities as they arise
  • Enables you to customize the interface with your company's corporate identity, enhancing the supplier's ability to identify and engage with your organization seamlessly

Pricing: 

Contact sales for pricing

Pros:

  • Contains filtered views to allow for focused priorities 
  • Auto-sends payment reminders

Cons:

  • Gets expensive with each customization implemented
  • Doesn’t allow unused/old customer accounts to be deleted
  • Integration with accounting software isn't seamless 
  • Approval workflow requires a manual trigger to start

7. PayEm

Procure to pay software by PayEm

PayEm offers a procure-to-pay solution, covering everything in one place to replace your traditional procurement process. With a core focus on processing PR, it simplifies the creation of POs with custom forms and approval workflows. It facilitates collaboration between procurement and finance teams to enhance visibility and control. 

Key Features:

  • Offers custom request forms equipped with conditional logic to ensure a user-friendly experience
  • Provides fully customizable automated approval workflows based on factors like amounts, subsidiaries, and stakeholders
  • Integrates with communication platforms like Slack and email, allowing request tracking and approvals
  • Consolidates all the requests and approvals, simplifying discussions, document sharing, and creating an audit log
  • Enables real-time updates and clear overviews of request statuses, minimizing the need for follow-up inquiries
  • Offers OCR technology for invoice processing
  • Syncs with your ERP and enables exporting reconciled transactions and uploading them to your ERP 
  • Automates vendor management with payment scheduling, funds transferring, and limits setting for each vendor

Pricing: 

Request a custom quote

Pros:

  • Multiple virtual credit cards for different vendors
  • Supports global transactions 

Cons:

  • Some vendors don't accept PayEm cards
  • High transaction clearing time 
  • Limits the user to either a virtual or physical card at one time 

8. Pipefy

Pipefy Procure to pay platform

Pipefy is an automation procure-to-pay tool to manage end-to-end procurement processes, from PR to paying vendors, to create a frictionless experience. It aims to break silos between teams to simplify purchase and AP. 

Key Features:

  • Allows you to create and customize workflows, from purchase requisition to supplier management
  • Provides secure portals where records and documents can be organized, ensuring that all information is easily accessible, especially during audits
  • Ensures compliance with custom forms that include required fields to accelerate POs
  • Enables access to real-time insights to help you forecast ideal quantities and vendors for requisitions
  • Evaluates your processes, delivering reliable data to enable strategic and data-driven decisions
  • Integrates with your existing ERPs and accounting systems, such as NetSuite, Oracle E-business Suite, QuickBooks, Sage Intacct, etc.  
  • Enables deadline alerts, approval flows, and information exchange to prevent late fees and cashing in on early payment discounts
  • Offers a customizable dashboard to streamline vendor registration, updates, onboarding, and contract management

Pricing:

Offers three packages starting with a free option for smaller teams, and a subsequent model that costs $20 per month per user and $34 per month per user. Also, offers an enterprise plan with custom pricing

Pros: 

  • Offers templates for organizing processes

Cons:

  • Complex sign-up process
  • Workflows aren’t flexible with difficulty with respect to adding new users and making changes 
  • Difficult to import data and search in the database for information

9. Procurify

Procure to pay software solution by Procurify

Procurify speeds up the procurement process, enhances internal communication, and reduces financial risks. It is an easy-to-implement tool that saves time for finance and operations teams. From catalog management to custom user controls, it helps to track the procurement process in real time. 

Key Features:

  • Tailors POs to match your internal processes and vendor expectations
  • Creates, tracks, and maintains an audit trail of all procurement transactions for transparency and compliance
  • Enhances financial controls by enabling PO-based purchasing
  • Ensures that requested items are approved against budgets before procurement
  • Syncs PO with your accounting system or ERP, whether via API, CSV, flat file, or direct integration
  • Integrates with trusted vendors through punchout catalogs to streamline the ordering process
  • Enables blanket PO, which involve making multiple purchases against a single PO, even when details of future purchases may be unknown
  • Provides PO workflows to save on shipping costs, unlock vendor discounts, and reduce paperwork 

Pricing: 

Starts at $2000/month with a custom pricing tier

Pros:

  • Easy-to-make amendments in the original PO
  • Enables ordering from multiple websites for resources, including Amazon
  • Makes it easy to upload documents to support expense and order reports

Cons:

  • Doesn’t offer payment services in UAE, so you will need to carry out payments on a different platform
  • Doesn’t cater to the UAE market, and does not support UAE-specific workflows such as VAT management
  • Cannot edit orders once they are approved
  • Cannot see the order history for a catalog item without running a report
  • Physical inventory has to be tracked outside Procurify

Which Procure-to-Pay Software Should You Pick?

Don’t choose a platform that offers the maximum functionality. Instead, choose the one that is user-friendly and flexible. 

Procurement is already a complex process that requires visibility by different stakeholders. Choosing a tool that offers visibility and accommodates complex business needs will help you transform your chaotic procure-to-pay process

If you want to get started, book a demo, and our team will help you identify the bottlenecks and make the entire process simpler and manageable.

Disclaimer: The comparisons and rankings of procure to pay software competitors in this article are based primarily on reviews found online. While we strive to provide accurate and up-to-date information, these reviews are subjective and reflect the opinions of the users who posted them. The information presented is intended for general informational purposes and should not be considered as a definitive guide for choosing a software provider. We encourage readers to conduct their own research and consider their specific needs before making a decision.

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January 29, 2024

Mohammed Ridwan

How to Improve the Accounts Payable Management Process for Healthy Working Capital

Accounts payable (AP) is the money you owe vendors and creditors, i.e., short-term liabilities. These are the payments for goods and services you received that are yet to be cleared.  

Companies struggle to manage accounts payable because the process involves multiple stakeholders, and the workflow isn't clearly laid out. The teams have to handle hundreds of documents, including purchase requests, purchase orders, goods received notes (GRN), invoices, etc. and ensure there isn't any discrepancy with the order received.

So, decentralized approvals and verifications make the process chaotic before the team can clear the final payment. If you find yourself in a similar situation, where accounts payable is hectic, and the working capital is messed up, read this post to discover the top strategies for effective accounts payable management.

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What is the Account Payable Process?

Account payable process

The AP process starts upon receiving goods and an accompanying invoice for payment processing. The next step involves verifying the accuracy of the invoice details. This verification process ensures that the goods received match the information provided in the invoice, including quantities, prices, and other relevant terms.

Following the confirmation, the invoice undergoes an approval workflow. It involves obtaining the necessary authorizations from various departments or individuals within the organization and ensuring compliance with internal policies and procedures before proceeding with the payment.

After completing the payment, the accounts payable team records the transaction in the financial system, updating the company's records. This step ensures accurate financial reporting and maintains an up-to-date overview of the company's financial position.

Challenges of the Decentralized Accounts Payable Process

Companies strive to maintain a seamless flow of goods and services while meeting financial responsibilities through timely and accurate AP management. However, relying on a manual process for these tasks introduces these bottlenecks: 

  • Managing documents manually raises concerns, particularly with paper-based documents that are susceptible to misplacement or damage. It not only hampers day-to-day operational efficiency but also poses a threat to data integrity.

  • Similarly, a manual verification process increases susceptibility to mistakes. Achieving precise alignment between received goods and invoice information requires meticulous attention, heightening the possibility of overlooking crucial details such as terms and conditions.

  • The manual handling in the approval workflow introduces risks of delays and potential oversights. Obtaining authorizations from different departments becomes time-consuming, and ensuring compliance with internal policies is prone to human errors.

  • After completing the payment, the critical step of recording the transaction in the financial system becomes vulnerable to manual data entry errors, impacting the precision of financial reporting and the clarity of the company's financial standing.

  • The manual process increases the likelihood of inadvertently paying the same invoice multiple times. Inaccurate data entry and a lack of robust authentication processes expose the organization to fraud, including the manipulation of invoices.

In summary, the manual accounts payable process detrimentally affects operational efficiency and financial stability. The lack of synchronization across different teams results in communication gaps and discrepancies. Failing to maintain a cohesive and streamlined process leads to errors in financial reporting, impedes effective decision-making, and strains interdepartmental collaboration.

Strategies for Efficient Accounts Payable Management

Effective management of the accounts payable process is possible when you optimize the human and technological aspects of the same. 

On the human side, optimizing requires streamlining workflows, enhancing communication, and fostering a collaborative environment. Simultaneously, the technological part involves shifting to an accounts payable automation solution that provides a centralized platform for complete visibility and control. 

Here are the strategies for efficient accounts payable management:

Strengthen Internal Control Over Financial Reporting

Internal control over financial reporting (ICFR) ensures the accuracy, reliability, and integrity of financial information within an organization. ICFR helps safeguard financial processes and mitigate risks as the intricate nature of accounts payable necessitates a robust control framework.

Strengthening ICFR for enhancing accounts payable management involves the following elements:

1. Segregation of Duties

With the segregation of duties, you ensure that no single individual controls all the stages of the accounts payable process. You divide the responsibilities among different staff members, which reduces the risk of errors, fraud, and mismanagement.

For instance, by assigning one team member to handle invoice approval and another to process payments, the segregation of duties minimizes the risk of errors or fraudulent activities and promotes accountability.

2. Audit Trail

Establishing a comprehensive audit trail involves recording and documenting every transaction in a chronological sequence of activities. It facilitates transparency and serves as a valuable tool for tracking and investigating discrepancies that arise during the accounts payable process.

For instance, in the case of an invoice mismatch, a comprehensive audit trail makes it easy to trace the exact steps in the transaction history, revealing where the error occurred. It speeds up the resolution process and enhances accuracy in financial reporting by promptly addressing issues.

3. Approval Policies

Clearly defined approval policies outline the hierarchy of authorizations required for various transaction amounts, ensuring that financial transactions undergo proper scrutiny before processing.

For instance, a clearly defined approval policy mandates that transactions under $1,000 require approval from a department head, while amounts exceeding $10,000 necessitate approval from top-level management.

4. Document Policies and Procedures

Clear documentation outlines specific steps for the accounts payable process. When a team member adheres to these guidelines, all required approvals are obtained, documentation is consistently retained, and errors are minimized.

In practical terms, this means that during an audit, the organization quickly and accurately traces the entire lifecycle of an invoice, showcasing compliance, reducing audit time, and enhancing financial transparency.

By strengthening ICFR, organizations systematically address challenges such as fraud, errors, and inefficiencies.

Employing Technology 

AP automation optimizes the accounts payable management process beyond mere operational enhancements, enabling accuracy, efficiency, and informed decision-making. Automating AP management is a strategic approach with the following key elements:

1. Centralized Collaboration

centralized collaboration

Automation involves centralizing AP management and creating a unified document storage and collaboration platform. Not only does it extract all the critical information, but it also stores them on a centralized dashboard for easy access and processing. This fosters seamless communication among team members, ensuring everyone can access real-time information and collaborate effectively.

2. Safeguards for Duplicate Payments

detect duplicate payments

Automation includes built-in safeguards to prevent duplicate payments. Automated systems employ checks and validation processes to flag duplicate receipts and eliminate the risk of paying the same invoice multiple times, reducing the likelihood of financial errors. Moreover, since the centralized platform acts as a single source truth, the possibility of double payments automatically reduces.

3. Streamline Workflow

streamline accounts payable workflow

Automated workflows simplify and streamline the entire AP process. With simple if-then rules, you can create workflows for trigger-based approvals. By eliminating manual intervention at various stages, tasks such as invoice approval, payment processing, and data entry become more efficient, reducing processing times and enhancing overall workflow. 

4. Integrate

Integrate with ERPs

The accounts payable software integrates with other financial systems. This integration ensures a cohesive flow of information across departments, reducing data silos and enhancing accuracy in financial reporting.

5. Insights

Gain accounts payable insights

Automated AP systems provide valuable insights through analytics and reporting tools. These insights enable businesses to track key performance indicators, identify trends, and make data-driven decisions. This analytical capability contributes to strategic financial management and planning.

Improve Vendor Relationships

Vendor relationships are not just about successful transactions. Healthy partnerships bring many benefits, such as streamlined processes, minimized disruptions, and a collaborative atmosphere that enhances the overall effectiveness of the accounts payable function within the organization.

Improving accounts payable management involves the following components:

1. Negotiate With Vendors

Initiating negotiations with vendors involves engaging in open discussions about terms, pricing, and contractual agreements till both parties arrive at mutually beneficial arrangements. Compelling negotiation ensures favorable terms for the company and establishes a foundation of trust and collaboration.

For instance, when negotiating with a key supplier for raw materials, the company secures favorable terms such as bulk purchase discounts and extended payment periods. This not only reduces costs but also builds a positive, long-term relationship.

2. Timely Payments

Adhering to agreed-upon payment schedules fosters goodwill and reliability, positioning the company as a trusted and preferred partner. Timely payments strengthen vendor relationships and contribute to smoother transactions and potential benefits such as early payment discounts.

3. Transparent Communication

Keeping vendors informed about payment timelines, potential delays, or any changes in the process contributes to a positive working dynamic. Open lines of communication facilitate problem-solving, creating an environment where both parties feel comfortable addressing concerns and finding resolutions.

4. Streamline Onboarding Process

Simplifying the onboarding procedure by providing clear guidelines, efficient documentation processes, and transparent communication ensures that vendors can seamlessly integrate into the accounts payable system. It saves time and lays the groundwork for a cooperative and efficient long-term partnership.

By implementing these strategies, businesses cultivate vendor relationships that go beyond transactional interactions, fostering a collaborative environment.

End Result: Optimized Accounts Payable Management Process

accounts payable automation in Pluto

For storing and retrieving documents, you get optical character recognition (OCR) technology that extracts invoice information accurately. All the information goes on a centralized digital platform, reducing the chance of misplacement and improving accessibility. 

For verification, you get all the necessary information on a unified dashboard. This centralized database enables accurate cross-referencing of received goods with invoice details, minimizing errors and making the process more efficient.

You get a no-code trigger-based approval workflow builder for approvals, where you can create workflows with simple if-then rules. These preset rules and automated notifications make authorization seamless across departments, reducing delays, ensuring policy compliance, and lowering the risk of human errors.

For recording transactions, you get integration facilities, where your accounts payable software syncs data across your accounting systems for consistent records, minimizes errors, ensures precise financial reporting, and offers a real-time, accurate view of the company's finances.

Next Steps for Efficient Accounts Payable Management

After establishing transparent processes and policies and adopting the right automation tools, plan an AP audit.

An AP audit involves reviewing and assessing the existing procedures to pinpoint areas that can be improved. By doing so, you identify inefficiencies or bottlenecks in the accounts payable management system. It provides insights into how well the established processes align with the intended goals and whether adjustments are needed.

This proactive approach helps enhance the overall efficiency and effectiveness of accounts payable management, ensuring that the system operates smoothly and aligns with the company's objectives. 

Read more about AP audits in our post to understand how they help and how you can prepare for them in advance.