When you are negotiating contracts, searching for suppliers, or figuring out the best way to move forward with a purchase for your company, do you find yourself feeling like there is a better way to get your work done? It happens to many procurement managers during their careers.
There are many variables that go into the purchase to pay process that need to be addressed in order to ensure compliance, quality, and less redundancy throughout the negotiations. One way to help with this is to use a source to pay software solution or automation to supplement your procurement process. Implementing this as part of your overall strategy ultimately reduces risk, improves spend under management, and makes it easier or faster to procure the goods and services that you need.
Here is a quick guide to how procurement can streamline your entire procurement process.
Understanding Procurement Stages
Procurement is an in-depth process that happens in stages. Software helps provide visibility, insight, and control into the process along every procurement stage. Procurement usually starts when a company recognizes the need for a product or service. Then it's a matter of developing the requisition and actually putting it in. Then you have to find a supplier, evaluate the supplier, and eventually draw up a contract for receipt of the goods or service. Making the order, paying the invoice, and keeping track of everything rounds out the cycle. Streamlining this process is essential to improved efficiency at any organization.
That is where automation can really help matters. By helping you understand and perform some of these procurement stages in the background digitally, you are able to acquire the product or services you need without much trouble. With integration into all other aspects of your enterprise management, software is the best method for improving the process at every stage of the cycle.
Guided Buying
In our non-working lives we probably use websites like Amazon to find and purchase goods to use at home. Wouldn't it be great if there were some kind of amenity that allowed you to do something similar with procurement? Well, there it is. It's called guided buying. Guided buying is sort of a hub of reputable suppliers you can use to quickly and efficiently make new purchases. It looks at where you are located and what you're buying then provides the most efficient options. Ultimately, it allows employees to make purchases without heavy involvement from the procurement department and keeps track of those purchases electronically.
Automation
Automation is one of the driving forces in most industries today. The meeting of technology and legacy practices had actually made most people's jobs easier, especially in procurement and purchasing. Using procurement automation tools lets you see what's happening along your purchase to pay path and provides even more tools for saving money, preventing duplication, and rubbing things more efficiently. Here are just a few things automation software can do:
● Tracking spending budgets
● Acquiring services easier
● Reviewing and approving purchases any time with a smartphone
● Streamlined purchase orders
● Guided requisition
● Quick contract retrieval and assessment
● Inventory management and control
Ultimately, using tools to enhance the process leads to improved performance and saves time without creating unnecessary work or headaches along the way.
Fraud Protection
Fraud is a major problem in the procurement cycle. It's always a lingering threat that costs industries billions every year. Whether it's third party risk such as maverick spending, information loss, or poor work / shorted goods. It could happen if a company gets a higher paid contract based on the procurement manager receiving some kind of monetary gain. It might be a conflict of interest or inflated bills. It could even happen during contract negotiations, with either party making deliberately misleading statements so they can snag that contract. Regardless of its form, spotting and investigating fraud is one of the more important roles in procurement. Less steps in the approval chain supply fewer opportunities for fraud. Automation software uses machine learning/artificial intelligence to flag potential fraud and enables real-time monitoring you can use to spot errors or risks before they can become a problem. It can apply to all spend within a company, making it an invaluable fraud prevention tool.
Improving Spend Under Management
The concept of spend under management revolves around procurement and finding the best value. It is simply the amount of spending that uses preferred suppliers/contracts and is directly overseen during procurement. It covers everything from negotiations with current suppliers to understanding the value added to your company. Monitoring your spend under management can lead to greater efficiency and reduced cost along the entire procurement chain.
Using software is helpful because it completely streamlines your entire procurement process while giving you complete real-time visibility into the purchase-to-pay cycle. When you want your suppliers to perform their jobs correctly and remain compliant with your organization's goals or guidelines, having software available is helpful to meet your company's procuring goals.
