When you receive hundreds of thousands of invoices each year, one KPI which will cry out how good or bad your P2P process is, is the percentage of invoices paid to terms.  In December there was a P2P meeting in Paris where P2P Leaders illustrated the initiatives which were really working.  For the attendees it was like entering a P2P Aladdin’s Cave (stay with me)… tips and ideas where spilling out like gold nuggests and gems.  One super-sized jewel came in the form of Percy Kirkman’s session.  Percy is the P2P Leader at Procter and Gamble.  He managed to silence the audience by sharing some very impressive statistics regarding Payment on Time (POT).

In 2007 P&G were keen to increase POT from 94% and the Right First Time (RFT) from 76%.  Key finance and procurement people put their heads together and decided the most effective way to meet their targets was to build a cross organisational team consisting of Procurement, Payment Services, Sourcing and the Sites, and established a common direction based around a joint vision, objective, goals, strategies and measures.  The objective was simple: ‘to drive for simplification, compliance and better service’.

Sounds good, but how did it really work?  The objective was bought to life by a ruthless dedication to joint accountability, joint reviews and league tables.  If this was going to happen, no cracks could appear.  Percy stressed the importance of placing real focus and dedication to ensuring the plan was followed through and stuck to.  What helped this was the creation of a single P2P action plan at Site/Regional level which were then led by appointed P2P Leads within the sites rather than the SSO.  This P2P leadership at site level and joint accountability between Procurement, Payment Services, the Sites etc meant that in 2008 POT hit 97% and RFT at 84%.

Read my blog in the next couple of days to find out how one company realised €7 million in working cap by doing something very simple.