Procurement process is often the place where good ideas come to die.
A company has a great new marketing plan for an upcoming conference, but requires some new purchases. The new marketing manager fills out a Purchase Requisition form, but makes some mistakes and it is sent back immediately. After correcting them, the procurement team informs him that the supplier isn’t registered yet and will need to go through a Vendor Registration process.
Finally, the purchase order is created but there are some errors on it regarding the details of the vendor. The errors are corrected, but the VP of Marketing is out of town and cannot approve the new PO until she gets back.
By the time the materials are finally received, the team has missed their window and has to use the old materials for the conference.
Procurement should be an enabling feature of business, not a killer. To really make a great impact, companies should consider procurement automation.
There are four main stages of the procure-to-pay cycle:
In the Demand step, the major procurement processes that is required is the Purchase Requisition. Creating a Purchase Request involves gathering information about the details of the request and the vendor. All of this information can be captured in an electronic form and funneled through a series of approvals with an automated workflow.
Probably the most important feature of a procurement process workflow is the approval step. If approvals are done over email, they can be difficult to track and attach to a process. If you include them as a part of a larger workflow, they are seamless and don’t require any follow-up. Similarly, if your purchase requisition software includes a mobile application, these approvals can be done on the go without waiting for anyone to return to the office.
The Vendor Registration and Asset Purchase processes can also be broken down into simple forms that ensure that all the correct information is gathered.
When it comes to purchase order process, the devil is in the details. Issues like tax, terms and conditions, and delivery terms must be followed exactly. Electronic forms and quick approvals ensure that it gets done the right time. Using purchase order automation here ensures that all the right information is gathered the first time and easily referenced later on.
Upon receiving the items, the important process to look at here is the Supplier Invoice. Vendors have their own invoicing systems and it can be difficult to match their standards with yours. Creating an automated system around the invoicing process can ensure that all the goods were received correctly. Companies sometimes pay invoices for goods never received because there isn’t a reliable invoice approval system and input from everyone involved in the system.
After you ensure that the goods and services have been received, Vendor Payments becomes the key process. Keeping good relationships with great vendors is important for any business and withholding payment due to complex internal processes isn’t the way to impress them. With an automated Vendor Payment process, you can make sure your vendors stay happy and excited to work with you.
Procurement can be an enabling part of the business, but only if it is streamlined. Unfortunately, these processes typically create huge opportunities for irregularities, complex approval systems and incorrect details. Clear out the chaos in your Procurement processes with automation.
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