An organization’s procurement department carries a great deal of responsibility. Along with overseeing all purchasing activity within a business, procurement also develops and produces vendor or supplier contracts, issues purchase orders, negotiates prices, communicates with vendors, and more.
Unfortunately, outdated or slow procurement procedures can lead to wasted time and resources. How can organizations simplify their procurement processing and reduce expensive or unnecessary procedures without spending too much money or disrupting their day-to-day operations? The answer is simple: procurement automation.
Automation and the Procurement Process
Procurement automation streamlines an organization’s procurement processes, boosting efficiency and reducing costs. Automation eliminates many unnecessary, time-consuming steps, such as the need to track down different departments or employees for purchase order approval.
Procurement automation software enhances the procurement process while keeping costs low. It also boosts overall productivity, reduces errors, improves transparency, increases internal and external collaboration, and ensures vendors and suppliers are paid on time.
Not sure how to get started? Here are a few ways to start automating your procurement process:
1. Seek out the right procurement process solution.
The right platform requires little to no training and offers seamless integration with more visibility and control over organizational spending. Vroozi’s procure-to-pay platform is simple to learn, part of a user’s critical path, and accessible on a laptop, mobile device, or portable tablet. Unlike other procure-to-pay options, Vroozi is intuitive and can be learned quickly.
2. Manage invoices with automation.
Manual invoice management is time-consuming and prone to errors. According to IOFM’s 2021 World Class AP Performance: Efficiency Benchmarking Metrics Report, just 24 percent of businesses that manually process less than 20,000 payments annually can pay all purchase order invoices on time.
In our experience, only 25 percent of purchase orders qualify for straight-through processing, and invoice exceptions occur in 26 percent of purchase orders. That means that more than 50 percent of purchase orders are missing invoices, approval, receipts, or other critical information, requiring the procurement department to track down the proper channels for approval. This can lead to delayed payments or compliance issues, which can damage supplier relationships.
Automating invoices can save valuable time and resources, removing manual work. A platform like Vroozi can code purchase orders for the accounting department, pre-approving and pairing them with the corresponding invoices. This data is then saved and recorded, allowing POs to be processed quickly in the future.
3. Automate your link to suppliers and vendors.
A close working relationship with vendors and suppliers is crucial for the success of any business, especially when supply chain issues or global shortages arise. Frequent two-way communication with third parties ensures quick responses to unexpected delays or hiccups in the procurement process.
Automation meets suppliers and vendors where they are by boosting day-to-day interaction and collaboration. When an organization’s procurement department can communicate openly with vendors and other departments, it improves productivity and develops important partnerships with suppliers, resulting in fewer mistakes.
Procurement process transparency can also improve vendor and supplier selection to find the most cost-effective options. Automation can also resolve issues quickly and prevent future problems from arising.
4. Reduce time spent in the PO approval cycle.
Up to 43 percent of businesses say they regularly experience issues with their PO procedures, even if they have an established purchase order system. Purchase orders and invoices can easily get stuck when missing certain information, requiring more time to move through your organization’s structure. Automation reduces the amount of time required to obtain approval, allowing the procurement team to accomplish more tasks and resolve issues promptly.
Boost Your Procurement Processes Today
Automating your procurement process can save time, resources, and money. Vroozi’s platform streamlines procurement. Search for goods and services, submit purchase requests, and approve orders with the click of a button. Additionally, Vroozi Purchase allows you to shop, manage and approve orders from any device, at any time.
