Operational processes have become the secret weapon and ultimate supplement to speeding up your organization’s growth timeline. Making sure your organization is collecting the right data, working with the right vendors, and ensuring proper compliance standards in your accounting processes is integral to pressing forward.
Knowing the difference between the three most popular operational processes, then, is essential to understanding the processes your organization needs to make more efficient. Here, we’ve provided a quick run-down of what each process entails, the steps related to them, and identified why they’re important.
Whether you’re new to the financial operations space or just needed a little refresher, here are the different but critical processes that we know as P2P, R2R, and Q2C:
This process covers the supply management process from organizations that require procuring the goods and services to pay for them. The following steps are included in this process:
- Identification of Requirement
- Authorization of Purchase Request
- Final Approval of Purchase Request
- Identification of Suppliers
- Receipt of the Quotation
- Selection of the Vendor
- Purchase Order Acknowledgement
- Advance Shipment Notice
- Goods Receipt
- Invoice Recording
- 3 Way Match
- Payment to Supplier
Of course, a key to remember is that this process doesn’t include sourcing or finding suppliers. To read more about these steps in-depth, read our guide here.
The opposite of P2P. The quote-to-cash process is one that covers the following steps:
- Product/Service Configuration
- Quote Creation/Negotiation
- Contract Lifecycle and Order Management
- Payment Receipt
Quote-to-cash captures only the revenue generating cycle of organizations. This means that it includes the, quoting, and invoicing, but doesn’t include the prospecting customers, customer service, or any support beyond the initial payment.
Record-to-Report is an operational management process is sometimes just referred to as reporting. Record to report speaks to the entire process from collecting data and consolidating it in a report format allowing financial organizations to deliver on streamlined accounting integrity as apart of the close process.
According to a study by Oracle, the steps of the Record-to-Report process is as follows:
- Extract data from transactional systems
- Ensure compliance with accounting standards
- Transform data into meaningful operations KPIs
- Determine the best way to present information
- Share complete results with internal and external stakeholders
- Engage Stakeholder dialogue
Making this report as streamlined and easy to follow helps companies make decisions and operational adjustments based on credible and accurate data. It also helps them maintain credibility and compliance with all the satellite members of their organization.