There has been an increased focus on improving the procurement management process over the years. The CFOs and CPOs are constantly looking for various methods to reduce cost and increase the savings through enhanced efficiency. The manual and paper-based P2P methods bring home a lot of challenges like inefficiency, lack of the visibility of spend management, inability to ensure the contract compliance. At the same time its automation helps various organizations to better understand their spend, convert the compliances to contracts, negotiate much easily for better pricing, reducing the spend etc. which are a few among the benefits.
Some key benefits of using an e-procurement software
— Enhanced visibility for better decisions:
An automated procure to pay system help on eradicating the various unnecessary costs in manual procurement processes and helps in increasing the visibility, sourcing velocity, and compliance, along with reducing the risk at every stage of the procurement lifecycle. The automation of the procurement management helps both the buyers and suppliers to receive accurate real-time data to make better decisions. This thereby improves the processing efficiency by removes the paper from the equation.
An automated system provides a clear visibility between the POs, invoices, goods receipt documents etc. to ensure the materials are received correctly before issuing the payments. This, in turn, helps from taking cash flow decisions based on incomplete data.
— Easy access to records:
If you have an e-procurement management software, all of your data on the suppliers are stored digitally and conveniently in a central repository which is easy to access during the time of sourcing. The buyers will easily access the online catalogs from the new or existing suppliers, review, approve the purchase orders, and check the status of shipments in e-formats. This reduces your time spend for scouting for documents by guessing the location of the documents. In addition, the cloud-based system provides dedicated permissions, access, and encryption features to allow multiple levels of the scope of approval based on organization’s team structure. The organization can arise specific authority to the users for raising purchase orders, define the spending limit etc. An e-procurement management system generates automated reminders to alert the users when POs are pending and require their approval or there is a breach of purchasing a policy.
— Catalog management:
Each organization can have thousands of contract records stored but only a few catalogs from suppliers. Often organizations prefer to source a specific item from an existing supplier from whom the same item was ordered in the past. The procurement manager generally looks for the catalog of the existing supplier and find all the information needed for the required item. Perhaps in many cases it happens, the contract of a previous order is available but the catalog is unavailable. In certain other cases, it becomes very difficult to find an old contract of the supplier from a stack of thousands of contracts. In these cases, an automated procurement management like the one we offer at Aufait helps the procurement professionals to link the e-procurement software with the contract management system and create a central repository to store the contracts although the catalog of the supplier is unavailable. This allows the procurement officers in the organization to easily fetch the details and historical cost of a previously ordered item from a particular supplier during the time of sourcing even when the catalog is not available.
— Proactive Reporting and Analysis:
This is the best use of automating the procurement process. The automation has the ability to create reports that can give deeper insights into the supplier performance, examine the spend at the various levels, whether the supplier is complying with the already negotiated terms, shipments, the status of contracts etc. The real-time reports help in providing the valuable business intelligence for strategic spend analysis and reduction of maverick spend.
— Leveraging the benefits of efficiency
The automation shortens the approval cycle time, it also reduces the possibility of missing payment deadlines. It also prevents the late payment penalties, opens a scope for leveraging supplier discounts and this, in turn, improves supplier relationships.
Keep checking this space to know why integrating an e-procurement software is important for your business, how to optimize your procurement and the various other benefits of automating the procurement management process.