Companies with a simplified purchasing process can gain significant productivity improvements and increase cost savings. In addition to that, a simpler procurement cycle results in the following:

1. Lower support & help desk cost
2. Better engagement and supplier relationships
3. Increased productivity

To support you in achieving this, our team has listed down six proven techniques in this blog to help you simplify your procurement cycle.

6 Techniques To Simplify Your Purchasing Process

Simplifying the entire process of your procurement is crucial if you want to enhance customer satisfaction towards your potential customers, and even boost your relationships with suppliers.

Here’s a list of 6 techniques to help you streamline your purchasing process to boost your procurement efficiency. Hopefully, this procurement model can help you improve the way you handle your entire procurement cycle

Technique #1: Have A Clear And Concise Ordering System

A user-friendly ordering system is the cornerstone of a streamlined purchasing process and better operational efficiency for your business.

By ensuring that your ordering system is intuitive and easy to navigate, you’re setting the stage for a positive customer experience.

Simplify the process by eliminating unnecessary steps and minimizing form fields. This not only reduces friction but also speeds up the purchasing journey.

If possible, Utilize dropdown menus, checkboxes, and autofill features to make data entry a breeze for your customers. Remember, the easier it is for customers to place an order, the more likely they are to complete the transaction.

Technique #2: Use A Centralized Procurement Platform

Centralizing all purchasing activities onto a single platform or software solution offers numerous benefits.

It provides visibility across departments including your stakeholders, reducing the risk of duplicate orders and ensuring better tracking of expenses and inventory levels.

Technology solutions that leverage artificial intelligence can further enhance accessibility, enabling team members to collaborate seamlessly regardless of their location. Aside from that, doing this can even decrease your maverick spending.

This consolidation fosters efficiency and accountability within your procurement process.

Technique #3: Supplier Relationship Management (SRM)

Building strong relationships with your preferred suppliers is essential for streamlining the purchasing process and securing high-quality goods.

By nurturing these relationships with your preferred, you can negotiate favorable terms such as bulk discounts or extended payment terms.

Regular communication with suppliers allows you to stay informed about changes in pricing, availability, or product offerings, enabling proactive decision-making. Investing in SRM not only simplifies procurement but also fosters long-term partnerships built on trust and mutual benefit.

Technique #4: Automated Approval Workflows

Implementing automated approval workflows reduces bottlenecks in the purchasing process while maintaining control, and compliance, and boosting your entire operational efficiency.

By defining approval thresholds and utilizing software tools or email notifications within your procurement cycle, your procurement teams can expedite approvals and minimize delays.

This not only speeds up the overall process but also reduces the need for manual follow-ups, freeing up valuable time for your team members to focus on strategic tasks.

Technique #5: Catalog Management

A well-organized catalog is instrumental in facilitating easy browsing and selection for your customers within your procurement cycle.

Your procurement teams need to ensure that you categorize items logically and provide detailed descriptions, specifications, and images to aid decision-making.

This can be done by regularly updating the catalog to ensures that customers have access to the latest pricing, availability, and product information, minimizing confusion and enhancing their shopping experience.

Technique #6: Streamline Payment Methods

Offering multiple payment options caters to the diverse preferences of your customers and streamlines the checkout process.

Implement secure payment gateways for online transactions and provide convenient methods such as credit/debit cards, electronic funds transfer (EFT), or purchase orders.

Ensuring compliance with relevant security standards instills confidence in your customers and enhances trust in your brand.

By implementing these techniques, businesses can simplify their purchasing process, reduce inefficiencies, and ultimately deliver a seamless buying experience for both customers and internal stakeholders. Regular monitoring and optimization are key to continuously improving the process and adapting to evolving requirements.

What Are The Objectives In Simplifying Your Procurement Process?

Before even simplifying your purchasing process, it is critical to identify what you want to achieve by simplifying the process.

Here are some objectives to simplify your procurement process:

a) Increase Stakeholder Engagement

Increasing stakeholder management is key for any successful procurement organization.

The purchasing process is, of course, a crucial part of the puzzle. A simplified purchasing process can help reduce the day-to-day friction with internal stakeholders and hence increase engagement.

b) Reduce Operations Cost

Like any other support operations, there is a cost to run the day-to-day operations, especially the tactical side of the purchasing. Some of the day-to-day activities include

• Processing purchase orders
• Expediting deliveries with vendors
• Guiding users on how to issue a requisition or purchase order

If you can reduce the complexity of the process, which also includes automating the process – then that can lead to reduced operations costs.

c) Increase Spending Under Management

Spend under management is the spend that is influenced or controlled by the sourcing department.

The more spend under management, the better the chance for the procurement department to deliver better savings.

What has the purchasing process to do with Spend under management?

One of the key challenges with increasing spend under management is to be involved at the beginning of the purchasing cycle. Which is when the stakeholder is thinking about engaging a vendor or set of vendors to satisfy a need.

Now if the process requires them to fill out a detailed form to engage sourcing then how many people would fill that form?

My guess is that very few people love to fill up forms!

Now consider that the process is as simple as clicking a button to engage sourcing and all the users have to do is give a brief description to get started – would that reduce the friction to engage sourcing?

In my view it does and hence simple process leads to increased spend under management.

Simplifying Your Sourcing And Purchasing Process

We can look at two aspects of simplifying the purchasing process.

a) Simplifying the sourcing process
b) Streamlining the purchasing process

Sourcing Process

So what needs to be fixed?

Focus on outcomes, not steps
If your team is focused on the outcomes of the RFP exercise and not the process, I believe that is a better approach. Let’s take an example

Your IT department wants to purchase a project management system. In today’s market, that is a commodity product. So does it make sense to conduct an RFP process where you would write detailed requirements, send it out to vendors, and then call for detailed demos?

Or does it make sense to do the following:

• Define high-level use cases
• Do a demo with the top 2- 3 vendors
• Considering your budget, select a vendor and do a quick trial of the software

Now you may not agree with the exact approach I outlined, but my point is that you should be focussing on the outcome and not the approach.

If you have an outcome-based approach, that provides agility to the team and helps them to adopt the process based on the requirements of the stakeholder.

Have A Category-Based Approach

Each category is different, so does having a consistent RFP process across all categories make sense?

I don’t think so.

So what you should do instead?

Creating a sourcing process based on the category. Direct spending needs a more holistic approach but indirect spending on the other side doesn’t need a detailed RFP process.

The indirect spend process has many variations. For example, the way you source hardware is very different from the way you source software. So having an upfront RFP process for each category would help boost the productivity of your team.

Do you need a process for each category?

The short answer is no. Based on your categories – you probably should be able to manage it with 2-3 subprocesses.

Enable Your End Users To Get Their Quotes

Self-service use cases are not new to procurement. Users using catalogs to order products or services is a good example of self-service.

Can the users get their quotes without involving the sourcing team?

The answer is yes and that would lead to increased spend under management and improved engagement with your stakeholders.

The challenge would be to ensure that compliance is enforced and your purchasing policies are adopted.

The compliance problem can be solved by

Manual Audits of the quote

Purchasing team can conduct manual reviews of quotes to ensure the purchasing policy is being followed. For example, your purchasing policy requires two bids over $10,000 in annual spending. To ensure the policy is being followed, your team should conduct regular reviews.

There are two challenges with this approach

It is time-consuming and needs dedicated resources toInstalled Plugins have this done consistently.
Audits are mostly done post-purchase. You might find issues but they can not be corrected in most of cases

So let’s look at an alternate approach that is more foolproof.

Automation

Automating the quote process can ensure that the purchasing policy is followed. Automation of the quoting process is a better approach due to the following reasons
It can automatically ensure that the purchasing policy is followed.

Let’s say based on anticipated spend and type of category, the system can automatically suggest 2-3 vendors who can be invited to bid. In cases where you have a sole source vendor strategy, the system can route the quote to that specific supplier.

The second benefit of using a quoting system is that it allows you to audit the process at any time since all the supporting data is in the system. Your team doesn’t need to go looking for emails to find out the old quotes.

It simplifies the user experience because users feel enabled instead of going to a strategic sourcing team for every purchase.

Purchasing Process

As defined above purchasing process deals with the execution part of a purchase cycle. The process starts with a user creating a requisition and end with vendor getting paid.

You can argue that the invoice management process is not part of purchasing and which is true. But when you are looking at simplifying the process, why only looking at half of the process.

So here are a couple of steps you can take to improve your purchasing process.

Review Your Approval Process

Every organization has a spend authorization process. To goal is to ensure that the spend is approved at the right level before the purchase order can be sent to the vendor.

In smaller companies, the use of purchasing credit cards is common but having a purchase order process can help in controlling unauthorized spend. That is not possible with purchasing cards.

A common source of complexity in the procurement process is the number of approval steps required before an order can be sent out. The higher the number of approvals, longer it takes for the order to be approved. Especially, if the approvals go to senior management – because they are often traveling.

So look at the number of steps in the process and determine whether it is simple or do you have a complex process. For example, you don’t need office supplies order to be approved by the Director of the department.

You can simplify your approval process by implementing a threshold for approvals such that each order doesn’t go all the way up the chain for approval.

You can also have a category based approval so that additional approvals can be added based on the category.

Automation Of The Purchasing Process.

Automation of the purchasing process can not just simplify the experience for end users but also leads to a reduction in the cost of processing a purchase order.
So let’s look at how automation can help in simplification of the purchasing process

It provides a standard process for purchasing and all of the manual steps can be easily automated. For example – if your company use a paper form or electronic form for purchase then that could lead to delayed orders and long approval time. This can be easily automated and simplified by implementing a purchase order system.

It is much easier to implement approval workflows and ensure compliance using an automated system as compared to a manual process.

It reduces the training requirement because of the use of self-service procurement.

It makes the purchasing staff more productive which allows them to focus on more value-add activities instead of tactical activities.

Provide Catalogs For Repetitive Purchases

Another easier way to simplify the purchasing process is to provide catalogs for repetitive purchases. This eliminates the need for redundant data entry by your users.

There are multiple ways of implementing catalogs for purchasing.

Any modern procurement system would have built-in catalog functionality. This is an easy way to cater to the needs of users who buy same or similar products again and again. A good example of this is categories like office supplies, IT categories like hardware and software or MRO categories.

The other approach is to build an item master in your ERP system. The problem with this approach is that most of the item masters are designed for direct materials and doesn’t extend well to the need of indirect procurement.

Our recommendation is to use a modern procurement system like ProcureDesk – Sorry for the shameless plug for ProcureDesk!

But whatever system you use, any modern procurement system should be able to handle the catalog requirements.

How Effective Is Your Current Procurement Process?

How do you go about measuring the effectiveness of the process?

Here are some suggestions for measuring the effectiveness of the purchasing process

Does The Process Help In Increasing Stakeholder Engagement?

One of the main objectives of procurement is to increase stakeholder engagement. Better engagement is not just good for increasing spend under management but also increases the effectiveness of your sourcing team.

So the next logical question is, how to measure whether the current process is helping with stakeholder engagement?

I think the simplest way to measure is to look at your annual savings and review the top and bottom departments sorted by spend.

Savings delivered is not the ultimate measure because it depends upon spending under management for that department or category but it is one measure of engagement.

The other measure would be to look at the number of RFPs for different departments.

Does The Process Help You Bring More Spend Under Management?

The other question to ask is whether your process enables you to bring spend under management.

For example, your standard process is to run formal RFPs for everything which follows your industry-leading seven-step process.

Even though in reality these steps don’t take that long (depending on the category) sometimes that is deterrent enough or I would say excuse for your stakeholders to not engage you.
The general feedback is that it takes too long to run RFP’s

The other example is how simple is your purchasing process. Is this fully automated where they can find preferred vendors and pricing without involving purchasing or is it manual where they have to fill out a form to engage in sourcing?

The end goal should be to design the process with your end users in mind. Nobody gets excited by the thought of engaging in purchasing! So why not design a process that is designed for self-service.?

Give your stakeholders what they want without comprising compliance by leveraging technology

How Happy Are Your Stakeholders With Your Purchasing Process?

Probably the simplest way to measure the effectiveness of your purchasing process is to ask your stakeholders. By stakeholders, I mean the end users who are engaging with your team.

These could be people who are engaged with your sourcing teams for RFPs (Request for proposals) or users who are purchasing products or services on the company’s behalf.

You could do this through surveys, 1-1 meetings or a combination of both.

Surveys would give you objective data but then you might need to follow up with individual users to get detailed feedback about the process.

Start with a simple survey with 3- 4 questions. I would generally ask the following and users can rate 1- Not Happy 3- Happy 5- Very Happy

1. How easy is the purchasing process?
2. How effective is the purchasing process?
3. If you could change one thing in the process, what that would be?
4. Are you open to helping us improve the process? [Yes/No]

These are by no means comprehensive but keeping the survey simple might increase the participation rate.
You can then always go back to those users for more detailed feedback.

Does It Make Your Team Productive?

By team, I am referring to the procurement team. The end goal for any procurement team is to deliver better savings and deliver better stakeholder engagement.

So, theoretically, if you can do more with less, you can increase the influence of procurement and increase spend under management.

Ask your team the following questions

• Is the current sourcing process effective?
• Is the process effective?
• What would you change in the process?

Not every item you purchase needs to go through a formal process and not every bid has to follow a three-bid and a buy, even though it is industry standard practice.

So keep your process agile so that it can adapt to the needs of the business hence increasing the overall productivity of the team.

What Are The Benefits Of A Simplified Procurement?

Simplified procurement offers a multitude of benefits for businesses, including:

• Cost Savings: Streamlining the procurement process reduces overhead costs associated with manual labor, paperwork, and inefficient practices. Negotiating better terms with suppliers through streamlined processes can lead to cost savings through bulk discounts, reduced lead times, and improved pricing agreements.
• Time Efficiency: Simplified procurement processes save time for both employees and suppliers. By reducing manual tasks, paperwork, and approval cycles, employees can focus on strategic activities rather than administrative tasks. This also results in faster order processing, reduced lead times, and improved delivery times from suppliers.
• Improved Compliance: Simplified procurement processes often come with built-in compliance measures. Automated approval workflows and centralized procurement platforms ensure that purchases are in line with company policies, budgets, and regulatory requirements. This reduces the risk of errors, fraud, and non-compliance, thereby protecting the organization from potential legal and financial liabilities.
• Enhanced Visibility and Control: Centralized procurement platforms provide real-time visibility into purchasing activities, expenditures, and inventory levels. This enables better decision-making, budget forecasting, and inventory management. With greater control over the procurement process, businesses can optimize spending, identify cost-saving opportunities, and mitigate risks effectively.
• Stronger Supplier Relationships: Simplified procurement processes enable businesses to build stronger relationships with suppliers. By standardizing processes, providing clear communication channels, and negotiating favorable terms, businesses can establish mutually beneficial partnerships with suppliers. This can result in better pricing, improved product quality, and preferential treatment during shortages or disruptions.
• Increased Efficiency and Productivity: By eliminating unnecessary steps, reducing manual tasks, and automating repetitive processes, simplified procurement increases overall efficiency and productivity. Employees can focus their time and energy on value-added activities, such as strategic sourcing, supplier negotiations, and vendor management, leading to improved business performance and competitiveness.
• Enhanced Customer Satisfaction: Simplified procurement processes often lead to faster order processing, improved product availability, and better customer service. By ensuring timely delivery of goods and services, businesses can enhance customer satisfaction, loyalty, and retention, ultimately driving revenue growth and market share expansion.

What Are The Challenges Of A Simplified Procurement?

While there are numerous benefits to simplifying procurement processes, there are also several challenges that businesses may encounter:

• Resistance to Change: Implementing changes to procurement processes can meet resistance from employees who are accustomed to existing workflows. Resistance may stem from concerns about job security, lack of familiarity with new systems, or fear of increased workloads during the transition period.
• Integration of Technology: Adopting new technology solutions for procurement simplification may require significant investment in terms of time, resources, and training. Integrating these systems with existing software, databases, and workflows can be complex and may result in compatibility issues or disruptions to daily operations.\
• Data Security and Privacy: Centralized procurement platforms and automated workflows rely on the storage and processing of sensitive data, including financial information, supplier details, and purchasing history. Ensuring the security and privacy of this data is essential to prevent unauthorized access, data breaches, or compliance violations.
• Supplier Adoption and Collaboration: Simplified procurement processes often involve collaboration with suppliers to standardize practices, share information, and negotiate terms. However, not all suppliers may be willing or able to adapt to new requirements, leading to challenges in supplier onboarding, communication, and relationship management.
• Customization and Flexibility: Standardizing procurement processes may overlook the unique needs and preferences of different departments or business units within an organization. Balancing the need for standardization with the requirement for customization and flexibility can be challenging, particularly in large or decentralized organizations with diverse stakeholder requirements.
• Risk Management and Compliance: Simplified procurement processes may inadvertently increase the risk of non-compliance with regulatory requirements or internal policies. Automating approval workflows and reducing manual oversight can lead to errors, oversights, or instances of fraud if adequate controls and monitoring mechanisms are not in place.
• Vendor Lock-in: Depending heavily on a single vendor for procurement software or services can create dependency and vendor lock-in, limiting flexibility and innovation. Businesses must carefully evaluate vendor offerings, contract terms, and exit strategies to mitigate the risk of vendor lock-in and ensure long-term sustainability.
• Change Management: Successfully implementing simplified procurement processes requires effective change management strategies to communicate the benefits, address concerns, and engage stakeholders throughout the transition. Lack of proper change management can lead to resistance, confusion, and ultimately, project failure.

Addressing these challenges requires careful planning, communication, and collaboration among stakeholders, as well as ongoing monitoring and optimization of procurement processes to ensure alignment with business objectives and stakeholder needs.

What Is A Purchasing Process?

Let’s first define what is a purchasing process.

For this discussion, we are going to assume all the steps from the need identification to the supplier getting paid.

Now you can argue that Accounts Payable is not part of the purchasing process but I would recommend you look at the end-to-end process to get a complete understanding of user experience. The end users / Employees of the company don’t stop interacting once the purchase order is issued, so why would you only evaluate just the purchasing process.?

In any Procurement/Purchasing organization, there are two sub-teams. So let’s divide the purchasing process into two subcategories.

Strategic Sourcing Process

Strategic sourcing is responsible for identifying saving opportunities by conducting spend analysis. Most of the sourcing teams have an annual savings target assigned to them.

Strategic sourcing team is responsible for day to day interaction with vendors to negotiate cost, conducting evaluation through the strategic sourcing process.

So what is the ideal strategic sourcing process?

There are many strategic sourcing models out there but let’s take the most widely used model for our discussion here

picture above depicts the At Kearny’s seven 7 step sourcing model. The idea is to cover the key steps involved in a strategic sourcing process.

The model can be applied to both Direct and Indirect spend but in my opinion, the process is better suited more for Direct materials.

If you are only focussed on purchasing, then skip this section and go to the next section on the purchasing process.

Let’s cover each of them briefly

Profile The Category

This step involves understanding the category profile. Few things to cover in the category profile

1. Annual Spend
2. Number of suppliers
3. Seasonality of demand
4. Forecast for the next 12 months

Select Sourcing Strategy

The sourcing strategy varies from category to category. However, some common cost-saving models can be used based on the category. For example, spend consolidation, parts standardization, and so on.

Generate Supplier Portfolio

This step includes building a listing of suppliers who can meet the requirements of a given category. Whether the vendor is qualified or not depends upon different factors which of course depends on the category you are sourcing.

For example – if you are purchasing raw materials then there are stringent qualification criteria which should be met for a vendor to be qualified. However, for something like IT hardware, you probably don’t need that many details.

A simple qualification check could be whether the vendor can provide what you are looking for at a reasonable cost and can meet your delivery criteria like lead time etc.

Select The Implementation Path

This step involves planning for an implementation path for your chosen sourcing strategy. You can adopt different approaches based on the category.

For example – You might take an RFP route for implementing your sourcing strategy or you might decide to run an auction.

Think of these as toolsets that can be applied to different scenarios based on the category and availability of the vendors. For example, an RFP might not be the best route for a single source supplier.

Negotiate With Suppliers

This step is self-explanatory so I won’t get into more details on this. The negotiation strategy could vary based on the type of the category.

For example, if you are negotiating for direct materials or you are trying to find a supplier for a unique commodity, then the approach is very different as compared to negotiating for office supplies.

Integrate Suppliers

After you have selected the supplier, the equally important step is to integrate the supplier with your supply chain. Following are some of the steps which are involved in the integration process
Supplier onboarding – setting up the vendor in different systems so that the transactions can be processed

Setting up cadence to exchange information about forecast and tracking deliveries.
Defining a vendor performance scorecard so that there is a shared agreement on how the performance would be measured.

The key point is to ensure that you all agree on key KPI which are being tracked as well as the source of the data which is going to drive those KPIs.

Setting up a schedule for quarterly business reviews. You might want monthly reviews in the beginning, especially for new suppliers.

This is by no means a comprehensive list of what should be done to integrate a supplier.

Benchmark Supply Market

This is a continuous process where you are benchmarking your vendors with what is available in the market. You could think of benchmarking in the following ways

Compare the supplier performance benchmarks with other suppliers. This could be within the same category or across the categories.
Identify what worked in the last sourcing process and incorporate that in your standard sourcing process.

Benchmark supplier performance across your peers or your competition. This data might not be readily available, so the evaluation is subjective or based on third-party data.

What Are The Steps To A Purchasing Process?

The purchasing process covers the execution of activities involved in issuing a purchase order and paying the vendors.

These activities are handled by two different departments, we are covering the whole process here but the later sections are focussed on the purchasing process covering the purchasing process

A purchasing process would have the following step

Step 1: Create Requisition

This activity refers to users creating a requisition for the product or service they intend to purchase. Depending on the level of automation, this could be a manual process or automated in some form or fashion. Generally, this is the area where users get frustrated and need training.

Step 2: Approval Of Spend

In this step, the requisition is sent for approval before the order can be created. The objective of this step is to ensure that spend is authorized at the right level.
In this step, the number of approval levels can add to the complexity and time it takes for the requisition to be approved

Step 3: Issue Purchase Order

This step involves creating a purchase order for a vendor. The difference between requisition creation and order creation is that in some cases the requisition might not even have a vendor specified or there are multiple vendors. In case of multiple vendors, the requisition is split across different vendor purchase orders.

Depending upon the level of automation, this could be a fully automated process. If the process is not automated, this could involve manually keying in the order into the backend system.

Step 4: Receive Material

The next step in the purchasing process is for the vendor to deliver the product or service to the company.

In the case of a tangible product, it needs to be received and inventoried if required. In the case of services, a receipt is not required in most of the case. But it is a good practice to create receipts even for services because that is an evidence for your A/P team that the product or service has been received and the invoice is OK to pay.

Step 5: Receive Vendor Invoice

This step includes receiving the vendor invoice. The vendor invoice can be received in multiple ways depending upon the level of the automation and the process established with the vendors.

Your company might be receiving invoices in one of the following ways

1. Vendors sending paper invoices which are then keyed into your accounting system.
2. Vendor sending invoices through EDI (Electronic Data Interchange) or other forms of electronic invoices. In this case, the data entry step is completely eliminated because the invoice is fully integrated with your back-end systems.

Step 6: Invoice Reconciliation

Invoice reconciliation step includes matching the invoice with the purchase order to determine any discrepancies. The straightforward outcome of this process is that the invoice is ready to be paid.
Companies conduct a 2-way match ( match PO with Invoice) or a 3-way match (match PO, invoice and receipt) to identify these discrepancies.

More manual the process, the more time it takes to conduct the reconciliation and as the volume of invoices increases, the process becomes less reliable and more time-consuming.

Step 7: Vendor Payment

In the final step of the procurement process, vendors are paid according to the agreed-upon payment terms.

These terms typically outline the timing and method of payment, which may include options such as net 30, net 60, or payment upon delivery.

Once goods or services have been received and accepted by the purchasing organization, invoices are reviewed for accuracy and processed for payment.

Simplify Your Purchasing Process With ProcureDesk

Our tool ProcureDesk has features that you might want to explore, to help you streamline the way you handle your procurement cycle.

Here are some of the features ProcureDesk has:

Purchase Requisition Management

While most purchase order software allows you to create a purchase order, growing companies need a process before the purchase order.

Even though all purchase requests end up with a purchase order, you still need the request approved for cost control and budget management.

With a purchase request, an employee can request the purchase with an estimated amount and have it approved by the manager.

Vendor Catalogs

The finance team wants a detailed description of everything the employees are purchasing.

But for employees, it is a pain to type in the long product descriptions.

Instead, provide them with vendor catalogs that streamline the procurement process. With catalogs, employees can choose what they need to buy with a click.

Let’s say you purchase office supplies from Amazon.com.

With the click of a button, an employee can open up Amazon.com, pick what she needs and then send the data back to the requisition. This experience is called vendor punch-out catalogs.

Here is a sample of the punch-out catalog:

And this is how the data gets moved to the shopping cart.

In some cases, all you need is a simple list of items that you can purchase from a vendor.

You can build a simple item list with some basic information enabling employees with similar purchasing experience as the vendor punch-outs.

Here is how you can curate your catalog in purchasing software:

Purchase Approvals

The system automatically assigns purchase approvals. Your employees don’t need to know who needs to approve the purchase.

You can configure the purchase approvals based on the amount, department, location, budget owners, and much more. You can easily configure your custom approval workflows.

The system checks the requisition against the purchase approval workflow and then identifies the required approvers for the purchase.

Purchase Order Management

Once the requisition is approved, you can send the purchase order to the vendor. Purchase order management software automates this process.

If you have a purchasing team, they might want to review different requisitions to assess cost-saving opportunities.

Automated Purchase Order Creation

You don’t have to worry about converting purchase requisitions to purchase orders with automated purchase order creation.

This saves time, especially when you don’t have a purchasing or buying team.

You can identify what suppliers accept purchase orders, and the system can take care of the rest.

Here is an example of a purchase order that ProcureDesk automatically generates.

Supplier Management

Is managing suppliers a problem for you?

Supplier management features can help.

Supplier management lets you keep track of your supplier information in one place.

Managing Vendor Information

With ProcureDesk, all your supplier information is in one single place.

You can track key vendor information like Vendor tax details, D.B.A name, delivery locations, and key contacts.

Suppliers can use supplier portals to respond to requests for quotes, track open purchase orders, and submit invoices against the purchase order.

The supplier portal enables self-service for vendors, reducing the number of inquiries the AP team receives.

For example – a supplier can track the status of the open invoice and track the payment status.

FAQs

What Is Procurement?

Procurement refers to the process of acquiring goods, services, or works from external sources to fulfill the needs of an organization.

It involves activities such as sourcing suppliers, negotiating contracts, placing orders, and managing supplier relationships.

Procurement plays a vital role in ensuring that organizations obtain the right products or services at the right time, quality, and price to support their operations and strategic objectives.

What Is Simplification In Purchasing?

Simplification in purchasing involves streamlining and optimizing the procurement process to make it more efficient, cost-effective, and user-friendly.

This includes reducing unnecessary steps, minimizing paperwork, standardizing procedures, and leveraging technology to automate repetitive tasks.

The goal is to simplify the purchasing journey for both internal stakeholders and external suppliers, ultimately improving productivity, reducing costs, and enhancing overall business performance.

Why Is Procurement Process Optimization So Critical?

Procurement process optimization is critical for several reasons.

Firstly, it helps organizations achieve cost savings by identifying inefficiencies, negotiating better terms with suppliers, and eliminating unnecessary expenses.

Secondly, it enhances operational efficiency by streamlining workflows, reducing cycle times, and improving collaboration among stakeholders.

Thirdly, it strengthens supplier relationships by promoting transparency, trust, and mutual benefit. Lastly, optimized procurement processes ensure compliance with regulatory requirements, internal policies, and industry standards, reducing the risk of errors, fraud, or non-compliance.

How Do You Manage The Purchasing Process?

1. Managing the purchasing process involves several key steps, including:
2. Identifying procurement needs and requirements.
3. Conducting market research and sourcing potential suppliers.
4. Requesting and evaluating supplier proposals or quotations.
5. Negotiating contracts, terms, and pricing with selected suppliers.
6. Placing orders and managing the procurement lifecycle.
7. Tracking and monitoring supplier performance, delivery schedules, and quality standards.
8. Conducting regular reviews and evaluations to identify areas for improvement and optimization. Implementing best practices, utilizing procurement software or tools, and fostering collaboration among cross-functional teams are essential for effective management of the purchasing process.

The Bottomline

A well-structured and efficient purchasing process is not just a necessity but a strategic asset for any company aiming for growth and success.

By prioritizing areas with the highest impact, such as user-friendly ordering systems, centralized procurement platforms, strong supplier relationships, automated approval workflows, catalog management, and streamlined payment methods, businesses can streamline operations, enhance compliance, and ultimately drive growth.

Investing in optimizing the purchasing process is not only about efficiency but also about fostering positive relationships with customers and suppliers, which are integral to sustainable business expansion. With a comprehensive approach to procurement, companies can position themselves for long-term success in an ever-evolving market landscape.