How To Use Tech To Streamline Procurement

Procurement isn’t an easy process. It’s technical and can be complex at times. So it stands to reason that finding ways to smooth out, streamline, or merely make things easier could greatly benefit any company. So what can you do to accomplish this laudable goal? It’s as simple as digitizing some of the processes and leveraging automation to your advantage. Technology makes our lives easier in many ways. Online banking. Shopping with our mobile phones. Communicating with anyone around the world. Even mundane tasks like paying your credit card bills and getting car insurance quotes can be done from the comfort of your home these days. So why not translate some of that convenience to the business world? Automation and software tools make the procure-to-payment process much smoother for everyone in the organization. Whether it’s vetting suppliers, requisitioning new items, or paying the bills/invoices, a little bit of technology goes a long way toward helping your organization accomplish its goals.

 

Assess Third Party Risk

Every organization operating today faces some level of fraud and risk throughout their daily operations. By using streamlined procurement methods and Enterprise management software, it’s easier to keep tabs on these risks and figure out ways to attenuate them. Typical third party risks might be a disreputable supplier who doesn’t hold up there into the contract or inventory mismanagement by employees. If inventory keeps going missing, employee reimbursements aren’t handled properly, the company suddenly finds itself with a lot more unapproved purchases being made, or other such fraudulent activities are occurring then there is definitely a problem that needs to be solved. By using a comprehensive spend analysis system, you can keep track of money as it goes in and out of the company and find any of these potential risk factors. This gives you Keen insight into what’s happening in real time, so you can be proactive and not reactive about third party risk or fraud within or without your organization.

 

Automate Procurement and purchasing

We’re living in a digital world. Traditional purchasing and procurement is just a tad outdated. From requisitioning to purchase orders to setting up the initial purchases of a product, the procure to pay process can get a little complicated. Doing it manually requires first doing research and defining a need for the product. Then finding a supplier for the products is the next step and after that, a manual requisition. When the requisition goes to you the department head gets approved, it’s time to put together the purchase order. Purchase orders need to have a lot of information on them. This includes:

  • The company name
  • A detailed description of the purchase
  • The suppliers name and information
  • The agreed-upon price points
  • The expected delivery date

The need to digitize most of the P2P process is fairly clear. It just needs to be implemented a little bit more broadly across more organizations. Doing so means less time spent on manual workloads and more time taking care of customers, improving operations, and making/saving money.

 

Automate AP Processes

The accounts payable department is responsible for making sure invoices are paid, managing cash flow, and optimizing working capital at an organization. At the level of the AP department, many adjustments can be made to reduce costs, cut costs for invoice, and enhance cash flow. Electronic invoicing is one of them. With electronic invoicing, invoice gets automatically coded to the correct expense account and it doesn’t require additional oversight from a team member to ensure that GL codes are correct or that it’s being routed properly. Moreover, electronic invoices don’t need to go through several levels to be approved manually. Anyone within the AP department who has access to the software can automatically approve it through their smartphones. This level of convenience means fewer invoice payment delays and less outstanding payments. It might even be possible to negotiate early payment discounts with vendors or other discounts based on how quickly invoices can be paid out. The beauty of implementing AP automation and e-invoicing at the organization level is how much it improves AP workflow while simultaneously reducing costs across every department within the organization.

 

Use A Digital Buying Guide

Buying guides are a magnificent addition to the organization’s procurement toolset. With guided buying, employees are empowered to purchase a series of pre-approved items that may be needed through a dedicated guide. The guide Works sort of like a typical e-commerce hub. Imagine shopping online for stuff you need or want at home. In guided buying, it’s a similar concept. Instead of being a repository of various inventory, however, guided buying is realized through punchout catalogs supplied by your approved suppliers. With the guide, you can go through and select items from various suppliers, put them in a card, and then check out through the guided buying system. The system automatically routes payments to the correct vendors while limiting what employees can purchase through preset rules and compliance standards. In this manner, guided buying becomes another way to prevent risk, avoid overspending, and reduce any sort of potential rogue spend that might occur in the employee buying process.

 

Use A Vendor Management System

A good vendor management system can be your company’s best friend—especially when times get tough. Vendors and suppliers work with your company to supply everything from raw materials to finished goods. They also need to be held to a pretty high standard. Vendor Management systems allow you to assess vendors in real time, determine the level of risk associated with them, communicate with them about requisitions, purchase orders, and invoices. Furthermore, you can negotiate early payment discounts or other services with your vendors by building strong relationships with them. A good vendor relationship leads to less costs, less turnover, and fewer instances of fraud over time. So, incorporating vendor/supplier management into your overall enterprise management is an essential tool for success.


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