Over the last few years, organizations are trying to improve the procure-to-pay process. CFOs are looking for ways to reduce costs and increase savings through improved efficiency. Manual P2P processes brings a wealth of challenges such as inefficiency, no visibility into spend and inability to achieve compliance. Automation helps organizations better understand spending, improve compliance, negotiate deals, and reduce maverick spending.
Key Benefits of Procurement Software
Improved Visibility for Better Decision Making: Automated procure-to-pay system helps cut unnecessary costs in procurement process and improves visibility, compliance while cutting risk at every phase of the procurement process. Automation helps buyers and suppliers to get real-time, accurate data to make informed decisions. It improves efficiency while eliminating paper from the process. Automated system provides end-to-end visibility between POs, invoices and receipt documents to make sure that goods have been received properly prior issuing payment.
Eliminating Cumbersome Processes: Purchase-to-approval process is one of the biggest bottlenecks in procurement operations. Let’s say getting approval for a series of equipment purchases, requires a document to be uploaded, attached, printed, signed, scanned and emailed back. Although integrating an eSignature application can eliminate some of the cumbersome steps, but there are still some areas of the process that can be streamlined and automated. Automation can alert key players about pending actions and significantly reduce bottlenecks.
Minimize Risk and Maximize Cost Savings: Too many suppliers put your company at risk. The more vendors you have, the more you have to try tracking them. When not addressed properly, this gets worse at a later time. Automated procurement software would help identify the spend associated with non-preferred vendors and manages it with preferred suppliers. Choosing preferred suppliers can ensure compliance with guidelines and can take advantage of volume-based price breaks and other purchase discount structures. Not dealing with non-preferred suppliers would reduce risk, take advantage of corporate discounts and save resources by allowing procurement to focus on higher-value tasks instead of managing many vendors.
Access to Records: With procure-to-pay software, the data can be digitally stored in a centralized repository, making it easily accessible to suppliers at the time of sourcing. Buyers can access online catalogs from new suppliers, review and approve purchase orders and check status easily. This means you spend no time in sourcing documents taking the guesswork out of finding documents. In addition, businesses can assign specific authority to users for raising purchase orders and define spending limits. Procure-to-pay system generates automated reminders to alert users when requisitions are pending and require the approval when there is a breach of purchasing policy.
Catalogue Management: Organizations have thousands of records stored and a few catalogues from suppliers. Organizations prefer to source a specific item from existing catalogue, which was ordered in the past. The procurement team looks out for the catalogue to find the information about the required item. Often, it becomes difficult to find the contract of the supplier from the stack of thousands of other contracts. Procurement software helps team to link the procure-to-pay cycle with the contract system and creates a centralized repository to store the contracts. This helps companies to fetch details and costs of the previous orders from suppliers at the time of sourcing even the catalogues are not available.
Reporting & Analytics: Automation can help create reports to give deep insight into the supplier performance, evaluate spend at various levels; ensure suppliers are complying with pre-negotiated terms, and status of contracts. The reports provide valuable intelligence for strategic spend analysis and reduce maverick spending.
Improved Efficiency: Automation shortens the approval cycle time and reduces the possibility of missing payment deadlines. This avoids late payment penalties, helps you to leverage supplier discounts and improves supplier relationships.
Automating procurement process is not an option, it has become a necessity today. To stand in the competition, the organization should not just be transactional but strategic. Automation through the eProcurement process is transforming the way you do business. The best benefit is freeing procurement team from low-value tasks so they can focus on strategic corporate activities.
Taking some steps to automate the procurement process can help reap significant benefits – in terms of reducing risk, saving money and eliminating waste. Therefore, if you haven’t started automating your procurement process, this would be the best time for you to start on it.
Kevin Peterson is a content marketing enthusiast, freelance writer at SutiSoft, specializing in Business, ERP, Technology and Cloud/SaaS trends.