Why School Districts Need a Procure-to-Pay Marketplace

The 2020-21 school year is already underway and many schools continue to struggle with and adapt to the education budget crisis created by the pandemic.  Given this reality,  districts can no longer afford the inefficiencies and cost of manual, paper-based requisitioning, ordering, invoice reconciliation, and payment processes. Digitizing the procure-to-pay process is now a necessity for school districts that need to identify every opportunity for savings and operating efficiency. 

What is a Procure-to-Pay Marketplace?

Procure-to-Pay refers to an organization’s operational procurement process, from requisition through to payment.  A procure-to-pay marketplace offers a single, seamless platform that facilitates all of the processes associated with the shop-order-pay transaction.

Organizations that have implemented an end-to-end procure-to-pay marketplace derive many benefits from their systems. To highlight just a few:

• One-stop-shop. A single site that teachers and staff can access to easily requisition all the goods and services they require from approved supplier contracts
• Optimize savings. Ability to identify saving opportunities in real-time to eliminate over-spending
• On-contract, compliant spending. Automated tracking of expenditures per contract to ensure budget, contract, and policy compliance
• Reduced overhead. Lower transaction costs by eliminating manual, paper-based procurement and payables processing
• Business insight. Increased visibility and control across the entire procure-to-pay process informs and elevates management decisions

Further, a procure-to-pay Marketplace eliminates the wall between procurement and accounts payable by automating the reconciliation of invoices with orders and creating easy access to historical records to support audit requirements.

Understanding the Procure-to-Pay S-O-P

SHOP.  Shopping/requisitioning is the first step in the procure-to-pay process. It includes finding the right product or utilizing a three-bid process to determine product price, selecting the supplier, and creating the requisition or shopping cart for approval.

The most efficient way to shop and create a purchase requisition is to implement a one-stop multi-vendor punchout marketplace of all district-approved suppliers and contracts.  Teachers and staff can then shop across these suppliers’ catalogs to access real-time product and price information, and conduct side by side comparisons.  At EqualLevel, our marketplace includes real-time search across punchout sites and an AI-powered savings advisor that checks items in the cart to suggest lower-cost identical or substitute items.

Once a cart/purchase requisition is created, flexible, automated purchase requisition approval workflows can be defined by the school building, department, and at different monetary values.  Approvers can either approve or reject a purchase requisition after evaluating the need, verifying the available budget, and validating the purchase requisition form. Incomplete purchase requisitions are rejected back to the initiator for correction and resubmission.  Approved purchase requisitions are converted into a purchase order and transmitted to the supplier.

ORDER. The next step in the procurement cycle, Order, involves processing, receiving, and distributing the product.

While leveraging a supplier punchout catalog creates efficiencies, these productivity gains can increase exponentially with the integration of purchase orders.  With integrated purchase orders, districts can eliminate staff time spent on the phone placing an order or sending a pdf via email or fax. Also eliminated is the possibility of data entry or re-keying errors by the supplier by ensuring, at the time of PO creation, that required fields such as work order number are entered.

One of the biggest benefits of integrated POs is the reduction in order processing time. The POs are submitted directly to the supplier’s fulfillment system via XML (Extensible Markup Language) or EDI (Electronic Data Interchange) with the orders being picked, packed, and shipped.

PAY.  This last phase of the procurement process, Pay, lets organizations maximize the benefits of procure-to-pay automation by allowing suppliers to submit invoices electronically, which greatly increases financial accuracy and processing efficiencies.

Once a goods receipt is approved, a three-way match between the purchase order, the vendor invoice, and the receipt of the good is performed. If there are no discrepancies found, the invoice is automatically approved and an okay-to-pay notification sent to the finance team for payment disbursement. A common frustration for districts processing invoices is missing or incorrect information that often requires time spent hunting down the correct data or delayed payments. In the case of inaccuracies, the invoice can be automatically rejected back to the supplier with the reason for rejection.

Finance and Account Payable Departments want to ensure vendors are billing properly and every order contains the necessary data to reconcile. Integrated invoicing via XML facilitates information accuracy, consistency, and completion, and as a result, payments go out the door more quickly.

More dollars for instruction.

School administrators want to ensure they have all the resources possible to ensure their students’ success.  Spending more than necessary on any transaction and on inefficient processes that increase workload and personnel requirements takes away from the hard dollars that could have been focused on expanded, mission-centric educational programs.

With a demonstrated ROI proven in school districts ranging from 2,000 to 200,000 students, the EqualLevel Marketplace will help your schools extend their budgets and get the most from every instructional dollar.