Reaching your organization’s profitability goals requires reducing your purchasing costs as much as you reasonably can while tracking all expenditure. This entails gaining proactive control of your organization’s spend, vendor approvals and budget while remaining compliant with procurement policies, relevant contracts, laws, and regulations.
Unfortunately, this is often easier said than done— especially if you’re not equipped with the digital procurement tools to facilitate these key business objectives.
Depending on how many vendors and suppliers your company relies on, it can be difficult to stay on top of purchasing activities and accounts. First, you need to ensure that you’re only purchasing from approved or contracted vendors. You need to verify that you’re getting the best deals and optimal vendor performance as you build relationships with key vendors.
Increase visibility with digital procurement tools
Clear oversight and spend visibility across operations is vital to making informed decisions and identifying cost saving opportunities. You can gain insight into:
- How your business spends
- Which vendors your team purchases from
- The frequency of purchases
- Total spend by category
Thanks to new vendor management features embedded in procurement software, you can streamline the entire vendor management process with complete control and visibility. As a result, you’re able to source the best supplies and services at the best prices for your indirect procurement needs. You get the peace of mind that comes with knowing that your procurement team is equipped to channel all business spend to vendors that provide the best value while eliminating as much wasteful expenditure as possible.
If it’s been a while since your company has reviewed or upgraded its procurement tools, you are almost certainly at a disadvantage if for no other reason than your competitors have likely invested in modern solutions that give them a game-changing edge.
If you’re looking to level up your procurement game and reap the financial and efficiency rewards, it may be time for you to invest in new procurement tools that keep your profitability goals and purchasing activities in lockstep.
7 Must-have tools for procurement efficiency
With so many choices on the market, it can be difficult to figure out which tools to invest in. We’ve simplified the selection process for you. Here are 7 must-have tools that your procurement and vendor management solution should provide if you’re wishing to optimize procurement processes and objectives.
1. True cloud-based procurement software
Purchasing doesn’t only occur in the procurement department. From purchasing goods and services for day-to-day business operations (i.e. indirect procurement), to expenses incurred by employees on behalf of the company, these transactions occur frequently and at all levels in a business.
And with remote work realities and prevailing uncertainties, access to business-critical systems is imperative. To this end, on-premise vendor management and procurement software leave much to be desired.
Today’s most competitive businesses rely on cloud technology that can be accessed from any location, from any device. With cloud procurement software, your entire team is empowered to carry out their responsibilities within a proactive spend management framework that enables collaboration, keeps them updated, ensures effective vendor management, and guides their purchasing decisions.
As an added bonus, cloud solutions are less expensive and easier to use. They cost less to maintain (your IT department will thank you) and they are secure and updated frequently.
2. A mobile-enabled solution
If your procurement software’s vendor tools are also available via a mobile app, your team is even better equipped to be more efficient and cost-conscious.
Such platforms enable users to request, claim, review and approve purchases and expenses, wherever they are. Your team can easily access system-configured currencies, tax rates, budgets, approved vendors, and cost centers from their mobile devices.
This way, processes are efficient and expedited—making the company that much more agile while maintaining proactive control and enabling an informed and responsible spending culture.
3. Tools for procurement that streamline the purchase order process
Processing paper-based purchase orders leaves companies exposed to the risk of losing purchase orders, inaccuracies and massive delays and bottlenecks that can lead to higher costs.
Use procurement tools that streamline vendor management and enable you to track and generate purchase orders and any attachments digitally. Such systems give employees the ability to centralize purchase orders, check the status of purchases and match POs to requests, invoices, and receipts.
4. Purchase order revisions or change orders
Mistakes happen - the wrong item gets shipped, a vendor sends too many widgets or maybe you ordered 10 keyboards but now you suddenly need 15. These scenarios are all too common in the procurement process.
Many systems enable you to perform change orders but keeping track of these changes - especially after the 9th or 10th revision - can be a challenge.
Look for a procurement tool that links all your change orders together and maintains the integrity of your approval structure. You’ll need change authorizations and a seamless audit trail so you can manage risk and easily keep track of:
- Who requested changes
- Who approved them
- And the reason for making the changes
With this feature, you stay informed of all activities associated with the PO revisions.
5. AP workflow management
Does your team still process and pay invoices manually? If so, your workflow is moving much slower than it should be—leaving you at a disadvantage.
There’s an easy fix: AP workflow management enables organizations to track, approve and process invoices much faster and much more affordably. Two or three-way invoice matching is simplified, accelerated and efficient, reducing your purchasing cycle and processing costs.
Reduce admin-intensive processes and the burden on AP teams - use your procurement software to automate everything from vendor approval to your entire procure-to-pay cycle. Such procurement tools not only save time but reduce the risk of overpayment and duplicate invoices.
6. Spend analysis tools for procurement and vendor management
Having access to procurement tools that enable visibility and the option to analyze and report on spend by employee, department and vendor gives you the power to identify saving opportunities and make data-driven decisions.
Get a holistic view of how your business spends. You can’t manage what you can’t see. By gaining real-time insights into spend by employee, department or entity, which vendors they’re purchasing from, and the frequency, you not only enable cost-cutting measures or budget adjustments to be applied, where necessary, but you’re armed with supporting data when negotiating pricing with vendors.
Your data will uncover price variances as well as the top performing vendors you should be buying from and simplify your consolidation processes.
Spend analysis tools for procurement give you a strategic advantage. You’ll no longer have to make decisions blindly, instead you’ll have on demand access to procurement and vendor management insights that assist you to make informed decisions that drive bottom line results.
7. PunchOut and internal catalogs
Rogue spend costs companies millions of dollars each year. Having effective procurement and vendor management tools in place to eliminate maverick spend with unauthorized or uncontracted suppliers could increase your saving potential exponentially.
From standard vendor approval processes to hosting internal catalogs to vendor PunchOut, ensure that your procurement software offers these advanced vendor tools that can drive more spend under management.
Internal catalogs enable procurement teams to set up and maintain approved vendor catalogs, price lists and set up templates for repeat purchases and fixed ordering. Users can shop and review product details with ease within a configured purchasing framework.
PunchOut enables users to shop from a vendor’s online catalog from within the procurement software’s interface. Users enjoy a familiar online shopping experience that provides integrated access to millions of products. You can rest assured that all purchase requisition, approvals, budget checks and purchase order generation processes are automated and compliant with business rules and policies configured in your procurement software.
Fraxion: Digital procurement tools that make it easy to spend less
Procurement and vendor management doesn’t need to be complex. Take advantage of the features and tools offered by cloud procurement software to digitize your processes, manage your vendors and extend visibility and control over expenditure.
With effective procurement tools like Fraxion’s complete solution for proactive spend management, you can elevate your processes and achieve your procurement KPIs. Get in touch to arrange a custom demo of Fraxion.