When considering process-heavy departments like procurement, organizing each process into a workflow will have a positive effect on the bottom line.
We talk about outdated procurement practices like paper forms moving over to make space for ‘modern’ solutions like spreadsheets and online forms. However, consider the average procurement team: they are spending the bulk of their day chasing email threads, hunting for hard-to-find spreadsheets, and processing mountains of paperwork.
If you want to eliminate all this inefficiency that’s causing a waste of time, energy, finances, and personnel resources, procurement workflows are the right answer.
But how does this work? Here’s all you need to know about procurement workflow automation.
What are procurement workflows?
Procurement workflows are the set of predictable and repetitive tasks in a procure-to-pay process. These workflows handle the responsibility of moving the data and documents involved in a procurement function from one step to the next. Each workflow in the procurement process has its own set of approval rules, task assignments, and more.
Let’s take a closer look at what makes an entire procurement workflow.
A closer look at what the procurement workflow looks like
Look under the hood, and you’ll see that a procurement workflow typically consists of these 5 key components.
1. Purchase requisitions
Purchase requests are raised when an employee raises the need for a product or a service. Each request establishes details like the items procurement needs to order, their quantity, and the expected timeframe.
Most of the time, purchase requests get stuck and consume a lot of time to move through the complex hierarchical structure. Using a procurement workflow helps not only to cut down the time of approval cycle, but also removes redundant steps in the process, enabling purchasing staff to do more in less time.
2. Purchase orders
The PO is the first official offer issued by a buyer to a seller indicating the details listed in the respective purchase requisition–types, quantities, agreed prices and timelines for products or services. It is used to control the purchasing of products and services from external suppliers.
POs are raised on the successful approval of the respective PR, or purchase requisition.
A recent survey established that almost 43 percent of organizations would admit to having immediate inadequacies in their PO practices, despite having a formal PO system in place. PRs executed through procurement workflows let organizations automate the entire purchase order cycle to deliver improvements in productivity and process efficiency, while saving costs.
3. Invoice approvals
Manual invoices often move slower than bureaucratic procedures.
Manual procurement practices tend to bog down the payment cycle, costing organizations early payment discount opportunities and worse. With automated procurement workflows, organizations can keep track of receipts, calculate shipping and taxes, and pay all invoices on or before the deadline with little manual intervention.
4. Vendor management
Without a clear line of disclosure and process transparency, organizations will end up making a strain in their vendor relationships. With automation, procurement teams can streamline vendor selection and pick the best vendor available.
By streamlining vendor management using workflows, organizations can quickly identify and resolve grievances, establishing better relationships with vendors.
5. Contract approvals
In traditional contract management methods, all contracts are unceremoniously dumped into overloaded cabinet or the local hard drive. As the process of contract approval management itself is disorganized and unstructured, finding contracts or keeping tabs on them can be a real challenge.
Procurement workflows help you organize all contracts in a central repository that can be accessed in a single click. Additionally, it also ensures that all contracts stay consistent and accurate.
How a cloud procurement solution can help streamline your procurement workflow
Procurement workflows are great in theory, but executing them can be tricky. There are a number of options out there, including stand-alone tools designed for specific functions, or comprehensive procure-to-pay tools.
These cloud-based digital procurement software solutions can handles all of your core processes within the procure-to-pay cycle, from POs, PRs, and vendor management, and all the way to contract and invoice management.
Procurement teams can enjoy a host of benefits specific to digital procurement. Faster purchase order processing, flawless procurement data management and integration with accounting and ERP systems are all typical advantages of taking procurement digital through a procurement workflow, using comprehensive procurement software.
If you want to take a look at procurement solutions, you can start your search at a really good place: Kissflow Procurement Cloud. It offers all the described benefits of comprehensive procurement software. You can check out the demo for free, and see how well it fits your requirements.