How does procurement software work?
Procurement software consolidates procurement processes to a central platform.
A digital solution begins its work in the procure-to-pay cycle by letting procurement teams look through products and their prices in real-time. It lets them access vendor past performance statistics, reviews, financial health, etc. It then allows companies to consolidate authorized suppliers.
The P2P workflow through a central procurement channel starts as employees raise PRs digitally, and the software routes them for approval. Accepted PRs can be converted into RFQs if required. Then, it converts PRs into POs after the vendor has been finalized. POs are routed for approval again and forwarded to an approved vendor. Vendor Portals in such software allow seamless communication with vendors.
As the company receives its goods, the software compares PO, GRN, and the supplier’s Invoice to confirm that the documents have similar data. Approved invoices are then paid to the supplier. The software also lets organizations choose which KPIs they’ll like to track and see, so the supplier performance is recorded through metrics.
Integration with accounting software, like Quickbooks, allows the software to store all transaction details, which can be later utilized for analysis and audit purposes.
Recommended Reading:
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How to Build a Solid Procurement Strategy for 2023 [9 Steps]
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The Vendor Management System (VMS) Buyer’s Guide 2023
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