By AMBAC Staff
Procurement jobs across nearly every industry can involve meeting with suppliers, price negotiations, managing logistics, attending trade shows and so much more. As a result of these multifaceted obligations, the workload quickly piles up, leaving many procurement professionals with limited time.
Other obligations in procurement involve highly repetitive tasks such as managing invoices and payments, tracking suppliers and orders etc.
Many of these repetitive tasks can thankfully be automated with modern tools. Automation can and should be used to ease time burdens on procurement professionals, so they can manage the other processes that can’t be automated and are essential for a company’s growth.
Procurement automation solutions range from downloadable software, which can be integrated into your current systems, or cloud-based solutions with varying features based on the size of the organization and other factors.
Below are some of the tasks that can commonly be automated in procurement and good reasons why you should consider doing it:
Manual inventory management is time consuming, and rife with the potential for human error. Having to watch inventory levels and reorder when they are low or ordering too much stock can both negatively affect a company’s cash flow to a large extent.
When stock levels are too high, a business will often be tying up too much of its reserve cash into inventory, with the potential that much of the product may remain unsold for quite some time. Likewise, when stock levels drop yet consumer demand remains high, businesses lose out on potential sales.
Software has eliminated much of the need for procurement professionals to have to manually take care of several steps in the inventory management process. Many modern software solutions offer features like one-click or automated reordering when stock levels fall, quantity alerts, and detailed reports on best-selling products.
In this way, crucial products are always supplied without the need for back-ordering, while products that aren’t as essential are never ordered with larger quantities than necessary.
Invoicing and Payments
A variety of payment and invoicing steps that used to require manual management can now be automated with procurement software. There can include managing supplier payments, sending and receiving invoices, and paying other parties involved in the supply chain.
Businesses can avoid human errors such as paying invoices for goods that were never received, paying an incorrect amount, or delaying payments, with procurement software. Of course, these errors can be costly for a business, and can happen quite frequently when there are many products being managed at once.
Automation features have virtually eliminated the need for procurement professionals to handle a wide range of invoicing and payment steps, ensuring that this requirement is taken care of in a timely manner to keep suppliers and other parties happy.
A variety of document management needs can typically be automated or facilitated with procurement software, ranging from contracts to invoices, receipts, purchase agreements, and more.
Many of these documents can be created or stored in procurement software, allowing for a central database which allows a company to easily access its important information. It also ensures that a paper trail for each transaction can be easily tracked without having to waste hours sorting through paper files.
Electronic document management also eliminates the need for a business to have paper copies of its procurement related documents, which can easily take up a vast amount of space and is simply inefficient and unnecessary.
With electronic document management, contracts can also be sent out and signed more easily, speeding up procurement processes and allowing businesses to bring on new suppliers with ease.
The days of having to send emails for order status updates are long gone with procurement software. Many types of procurement tools have order tracking features built-in, to allow professionals to easily get order status updates with a simple report.
This can be a major convenience in procurement, especially when companies are providing many products can’t possibly have someone requesting a manual order status for them.
Procurement professionals can also identify the average shipping time for their most important products so they can properly plan for restocking at the appropriate time.
Order tracking features have continually improved each year due to GPS and other technological advancements, and they are now more accurate than ever, allowing for a far more streamlined and transparent process.
Reports and Analytics
Detailed reports on spend analysis, historical records, savings tracking, supplier reports and more can be generated with procurement software, providing an array of insights for procurement professionals to rely upon as they make key decisions.
Reports can often be customized to a large extent depending on the software solution, providing detailed and useful information. Every dollar a company spends can be traced and tracked, poor performing products can be easily identified, and plentiful opportunities for cost savings are realized through access to convenient reports.
Automated reporting also facilitates better communication between a business’s procurement and finance departments and helps procurement professionals make far more accurate decisions so businesses can grow in the most efficient way possible.
Good procurement software will facilitate communication within the business, ensuring that everyone is on the same page and has the same central source to refer to. This means fewer emails will be necessary and countless hours can be saved.
Much of the information a procurement team needs can be instantly accessed in software, from reports, to order statuses, inventory levels and more. The result can transform many businesses that rely on outdated communication processes.
How to Find the Right Automation Solution
The key to finding the right procurement automation software involves looking at the current needs and challenges that your business has and finding the appropriate solution that addresses them.
Many options are available, but the one thing they all have in common is their convenience and ability to significantly streamline a variety of procurement processes by automating them, allowing professionals to focus more on the essential tasks that will drive the growth of the business.