Procure-to-Pay and the Power of EDI

As many businesses will be aware, the procure-to-pay (P2P) process is the cycle of purchasing and paying for goods or services. It spans everything from identifying an initial need within an organisation to issuing payments to suppliers. Using an integrated system like Zupa’s Caternet, which fully automates the process, is an essential step in scaling, because as a business grows, the complexity of product purchasing grows with it. But why are P2P systems becoming a lifeline to many contract caterers today?

Procure to pay within the Caternet platform facilitates electronic trading across every supplier the catering operator deals with, including those that operate in multiple trading locations. This means orders are created within the system and sent to a supplier over the internet. The supplier can then send delivery and invoice data as electronic messages completely removing longwinded paperwork from the procurement process, thus making everything visible and auditable for head office users. The benefits are of course wide reaching for customers and can be best summed up in three words:

Efficiency

Essential in today’s resource challenged market.

Control

Vital in a world of rising costs and unpredictability.

Visibility

Ensuring that businesses can operate with clarity and one single source of truth when it comes to what goes in and out of the business.

Control is one of the most tangible benefits of P2P, and the beauty of systems like Caternet is that suppliers input their product catalogues directly into the system, and these are approved by your central purchasing team. This process is based on an ABL (Approved Buying List) being established; in simple terms this means users in the trading sites/operational units can only buy the correct product at the correct price, cutting out any human error and reducing costly mistakes.

Coupled with control, the electronic process makes the creation of orders and receipting of goods far more effective. The system will automatically three-way match orders, deliveries and invoices, with complete matches automatically being passed to the finance team via an interface. This means users must only deal with exceptions, delivering even more productivity and operational efficiency.

When we speak to our contract catering clients, we are told time and again how they love the efficiency and control of Caternet, yet what really gets our clients excited is the huge potential the system has in saving them time and money. Based on our own system data and industry averages, we can calculate the savings an organisation will make moving from manual processes to Caternet. In fact, we’ll be launching our very own P2P calculator on our website soon – operators will be able to simply put in the number of invoices they trade with and the number of sites they have, and the saving will be calculated. In the food industry businesses often purchase perishable products, so we have a higher volume of lower value invoices compared to other industries. This means the savings can be significant.

The power of EDI is really shifting the landscape too, especially in terms of the visibility it delivers on purchasing data. Being able to see what sites are purchasing on a line-by-line basis is very powerful data to have access to. Also, for contract caterers, being able to use that data to analyse what you buy from each supplier gives a marked advantage when negotiating future prices, compared to the days of the supplier having all the purchasing data and all the clout. EDI essentially flips that power putting greater control into the hands of businesses. For example, operators can use such data to analyse supplier performance in areas such as fulfilment of orders and how frequently products are substituted.

The Caternet SaaS (Software as a Service) product is constantly being updated and improved to give more benefit to its customers. In fact, it is one of the many reasons The Dean Close Foundation has recently reengaged with Caternet (Read more here: I https://www.zupa.com/case-studies/zupa-celebrates-reunion-with-the-dean-close-foundation). Interestingly, messaging enhancements in 2023 also saw the number of invoices being processed via auto reconciliation, increase from 89% to 97%.