The Best Strategies Businesses Should Follow to Modernize the Procurement Process

Procurement is crucial for any business and is one of the most complex and time-consuming processes. As a company grows, purchasing becomes even more complicated. If the complexities arising from the regular purchasing process are not addressed, the process becomes inefficient, employees experience frustration, rouge spending can occur, and compliance will be at risk.

Businesses aiming to grow must address and modernize their purchasing process with proper steps and technology in place. With a modern buying process, requisitions become easier and faster for buyers. At the same time, approvers gain the control, visibility, and contribution needed to ensure procurement occurs in a way that promotes growth.

How Inefficient Processes are Affecting the Procurement Process

Many organizations still rely on traditional methods of communication, such as phone calls and text messages, to manage purchase orders. These outdated practices limit visibility into purchase requests and significantly slow down the approvals process, leaving team members and vendors uninformed.

When purchase requests are slow and difficult for employees to initiate, businesses often experience delays that can hinder key activities within the organization. Without access to the necessary technologies and services, employees may struggle to perform effectively, leading to a negative impact on the organization and its ability to innovate.

Risk assessment becomes challenging with a manual procurement process. Poor purchasing methods and lengthy approval timeframes can result in unmanaged spend. Without proper security evaluations and the ability to audit spending for compliance, companies often expose themselves to more risk than necessary.

The Best Practices to Modernize Your Procurement Process

As you move toward modernization, the main goal of this transition is to transform the entire procure-to-pay process and gain control over spending. Here are a few best practices that will help ensure your procurement process is successful:

Communicate with Your Teams

Clearly communicate with your internal teams about the changes you plan to make in the purchasing process and why. Explain these changes to everyone involved in the procure-to-pay process from the outset, then execute them and share the outcomes with your team as improvements are made. This provides greater transparency across teams and allows for assessing results to iterate on processes and workflows.

Implement Advanced Procurement Software

Utilizing an advanced procure-to-pay solution eliminates the need for manual and outdated processes, improves resource management, and provides complete transparency across the buying process. The solution should be easy for employees to understand and use so they can complete their assigned tasks effectively. It must be flexible enough to adapt to future needs of the business.

Depending on your industry, there may be specific requirements regarding the type and flow of goods, services or payments within your business. Implement solutions that allow customized workflow processes tailored to your unique business needs. A customizable solution allows you to create the most efficient processes and automate the entire purchasing process, reducing errors and improving efficiency. The solution automates tasks such as purchase orders, invoice receipt, approvals, and payments.

Ensure the System is Fully Integrated

Procure-to-pay process allows procurement and finance departments to work collaboratively to ensure that the goods or services purchased by an organization are paid for. There are numerous factors that can delay the process from being efficient, such as slow data exchanges between systems, tedious processes, and manual data input.

With an integrated procure-to-pay system that includes key systems like Accounts Payable (AP), Inventory Management System (IMS), Invoice Processing, and eCommerce platforms, you can drive faster payments, greater visibility, and eliminate costly manual work.

By integrating these systems into a single platform, you can streamline the process and make it more efficient for all stakeholders involved. It also improves data transparency across all departments involved – creating a self-service environment for information and removing information hurdles.

Automate Approval Workflows

Create workflows that include all necessary approvers for each type of purchase, such as stakeholders in finance, accounting, security, legal, and others. Identify which approvals can be processed in parallel to reduce the overall approval timeline.

Next, adopt a solution that enables you to route purchase requests to the appropriate approvers according to the approval flow. Focus on identifying and eliminating non-transparent and confusing processes, and implement automated workflows wherever feasible.

Conclusion

A modern procurement process has become a significant advantage for organizations today. With a commitment to continuous growth and proper steps to modernize the process, organizations can transform their procure-to-pay process into a driver of value creation.Implementing an advanced procure-to-pay system like SutiProcure is essential to keeping up with changing needs and ensuring that your business spending is under control.