The Finance and Supply departments work hand in hand to manage resources and generate savings. To achieve this, approaches such as Source-To-Pay (S2P) have been adopted to enhance productivity within processes, reduce expenses and improve supplier relationship management. However, there is an evolution in this work strategy between Finance and Supply: Budget-To-Pay (B2P).
Some of the challenges that organizations face, beyond cost reduction, are ensuring the visibility and traceability of processes, understanding the information that is generated in each of the stages of the Supply Chain to make strategic decisions and manage efficiently budgets by aligning the different teams.
The B2P approach allows the dynamics between the financial and purchasing areas to evolve, moving to a relationship with proactive and fluid communication. In this way, greater visibility and accuracy is guaranteed between the budget, purchase orders and accounts payable.
What is the B2P approach?
B2P is a framework that makes it easier for Finance and Purchasing teams to work together to have greater control of costs , starting from the budget until the invoices are filed and paid.
When establishing the annual budget, Purchasing works hand in hand with Finance to establish the budget control objectives for each area. Once the objectives are aligned, each purchase order is related to a budget line for approval. If it is over budget, purchases are not made until additional funds are available.
If this way of working is complemented with technology that facilitates the integration of the entire B2P cycle, traceability is easier and more precise because all the data will be consolidated on a single platform.
B2P Benefits
- There is a single expense recording system for more effective tracking.
- The allocation and control of costs is carried out in an efficient way.
- There is greater visibility of information.
- Each budget weight can be linked to actual data: purchase orders, direct purchases, or approved requisitions.
- Promotes collaborative work between business areas.
