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Is it possible to optimize an organization’s spend without hiring new employees or making a huge IT investment? Is there a way to streamline complicated procurement processes like supplier onboarding and contract reviews? Can we eliminate costly invoice processing and manual data entry errors? The answer is yes, you can, and procurement automation is the key. It is based on the underlying procurement philosophy of “procuring the right item at the right time at the right price from the right vendor”.
What is Procurement Automation?
Procurement automation is a strategic approach aimed at optimizing procurement processes to achieve maximum efficiency and time savings. By leveraging automation software, businesses can accelerate the procurement lifecycle, liberating employees from mundane, time-consuming tasks. This empowers teams to redirect their efforts towards critical activities like decision-making and strategic planning. Moreover, procurement automation software revolutionizes the procure-to-pay process, all while keeping costs in check.
This comprehensive approach involves the automation of various tasks and functions, including purchase requisition, supplier management, purchase order creation, contract management, invoice processing, and reporting. By implementing procurement automation, organizations can not only streamline operations and reduce errors but also gain tighter control over costs. This translates to improved resource allocation and a stronger bottom line.
Why should you automate your procurement process?
Before we jump on to the five procurement processes to automate, here are some of the benefits of procurement automation.
- Increases productivity
- Eliminates manual errors
- Provides visibility into your spend
- Acts as a central repository
- Improves collaboration between internal and external teams
- Removes approval bottlenecks.
Top 6 Procurement Processes Every Company Must Automate
1. Purchase Requisition
Most of the time, purchase requisitions get stuck and consume a lot of time to move through the complex hierarchical structure. Procurement process automation will not only cut down the time of approval cycle but also remove redundant steps in the process and enable purchasing staff to do more in less time.
2. Purchase Order
In a recent survey, nearly 43 percent of organizations admitted having immediate inadequacies in their PO practices despite having a formal purchase order system in place. Procurement process automation allows organizations automate the entire purchase order cycle to deliver improvements in productivity and process efficiency, while saving costs.
3. Invoice management
There’s a problem with manual invoice management. Too often, procurement teams have to deal with misplaced or poorly managed purchase orders, missing goods receipts, submission delays, uncontrolled (maverick) spending, tricky spreadsheets, and insufficient transparency as far as the spend culture is concerned.
Manual invoice management usually means, practically, delayed payments and compliance issues.
By going digital, invoice management becomes buttery smooth, with features ranging from touch-free auto-approval of standard low-value invoices to extended functionality through integrations with finance and accounting tools.
For example, Kissflow can speed up your invoice approvals by automating the three-way matching and streamlining your approval process. You can compare individual invoices against predefined business rules and available POs and goods receipts – in a click.
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 automating vendor management process, organizations can quickly identify and resolve grievances, forming a better relationship with the vendor. Manage your vendors better with our guide to creating successful strategic sourcing. Download it now!
5. Contract Management
In manual contract management, all contracts are just dumped in the same filing cabinet or the local drive. As it is disorganized and unstructured, finding contracts or even keeping tabs on them can be a real challenge.
When contract management is done through a centralized automation platform, you have easy access to a central repository of documents, which means all the documents you need are just a few clicks away.
This enables notifications and updates about contract expiry, giving stakeholders ample time to renew and renegotiate them if needed.
Sourcing refers to the process of identifying, evaluating, and selecting suppliers to provide goods or services that meet an organization's specific requirements. Traditionally, sourcing involves a manual and often time-intensive process of identifying, evaluating, and selecting suppliers for goods or services. This usually involves using multiple platforms to complete your sourcing deals and not to mention too many back and forth communication that can sometimes be lost, leading to delays.
With a procurement automation platform, you source suppliers through a structured and automated process with a centralized platform to communicate, compare bids, and store sourcing-related documents. Product-driven insights based on price, delivery times and more also help you easily choose the best supplier.
Why choose Kissflow Procurement Cloud?
Kissflow Procurement Cloud is a cloud-based procurement automation software that helps you automate your procurement process end-to-end. Some of its advantages are as follows:
- Run and execute procurement processes with optimal process efficiency and reduced costs
- Streamline the procure-to-pay cycle and mitigate purchasing risks.
- Track and store all purchasing transactions and contracts in a centralized location
- Study the organization’s spend habits to better budget allocation
- Integrate with all your existing financial and accounting systems for easy and timely payments
- Customize reports, dashboards and workflows to suit your business needs
- Access reports and analytics features, providing insights into procurement performance, spending patterns, and supplier performance–supporting data-driven decision-making.