ROI CALCULATOR

What Is Procurement ROI?

Procurement ROI measures the efficiency of your organization’s procurement activities. It evaluates the savings, efficiencies, and value derived from procurement against the expenses of procurement operations, including direct and indirect costs. 

Vroozi’s procure-to-pay solution boosts procurement ROI by automating and optimizing procurement processes, improving spend management, and enhancing supplier relationships, leading to cost savings and operational efficiencies.

Understanding Procurement Costs

Procurement costs go deeper than the direct cost of goods and services. To truly get to grips with procurement ROI, you should also account for indirect and opportunity costs. 

Indirect costs not only include the goods and services that support a business’s day-to-day operations, but also the operational expenses highlighted by our procurement ROI calculator: manually handling requisition orders, purchase orders, invoices, and payments. 

Opportunity costs result from the choices your business makes or doesn’t make. That includes choosing inefficient manual and legacy procurement systems when you could invest in cost-saving procurement automation, centralization, and process integration.

Businesses struggle to track and manage indirect and opportunity costs, especially those stemming from manual processes, inefficiencies, and non-compliance with procurement policies. But it is these hidden procurement costs that increase labor expenses, delay operations, and result in unmanaged spending.

Boosting ROI with Procurement Automation

Transitioning from manual to automated processes cuts costs and boosts procurement ROI. Automation enhances efficiency, eliminates expensive errors, and frees procurement and AP professionals to focus on tasks that bring real value to your business. 

To take just one example, manual invoice processing costs businesses $40 per invoice on average. AP invoice automation reduces that cost to around $4 per invoice with AI-powered invoice capture, coding, and two- and three-way matching. Vroozi offers similar savings throughout the procurement cycle.

A Procurement System Buyers Want To Use

Employees avoid complex and cumbersome procurement systems, leading to rogue spending, reduced spend visibility, and inflated costs. Rogue spending adds an extra 12–18 percent per dollar spent, with only 61 percent of expenditures being contract-compliant in 2022.

The solution? A centralized procurement marketplace that makes it easy for employees to find and buy from approved suppliers, ensuring compliance and reducing rogue spending. 

Vroozi’s ecommerce-like marketplace increases user adoption, reduces non-compliant purchases, and leads to cost savings. 

Spend Visibility: The Key to Procurement ROI

Spend visibility is crucial for enhancing procurement ROI. A clear view of where and how your business’s budgets are spent is key to identifying savings, negotiating better terms with suppliers, and improving procurement efficiency. Without spend visibility, uncontrolled and inefficient spending is unavoidable.

Procure-to-pay software enhances spend visibility by digitizing and automating procurement. Automation ensures spend data is accurate and comprehensive, supporting real-time visibility into spending and supplier interactions for enhanced strategic financial decision-making and improved procurement ROI.

Maximize Your Procurement ROI with Vroozi’s Procure-to-Pay Platform

Vroozi’s centralized, integrated procure-to-pay platform and sophisticated procurement automation eliminate complexity, manual data entry, and error from every stage of the procurement cycle. 

From purchasing via a marketplace of approved suppliers to streamlined approvals workflows to automatic invoice capture and processing, Vroozi cuts costs and increases procurement ROI.

Ready to boost your procurement ROI? Contact a procurement solutions expert for an in-depth analysis.