Procurement process inefficiencies like delayed payments, duplicated invoices, and transaction disputes cost the organization a lot and result in hampering of relationship with vendors and losing the preferential discounts offered by vendors to the organization. The traditional procurement process involves maintaining a stack of papers, lengthy email threads, etc. It also possess a significant amount risk, fraud and mismanagement. All of this can be avoided by implementing an automated e-procurement system.
Why to automate procurement process?
An automated procurement process can eliminate the manual and repetitive tasks like releasing purchase orders, processing invoices, and data entry, etc. allowing them to focus on critical tasks like decision-making, budgeting and strategizing.
Let’s understand the main reasons to automate the procurement process:
- Centralized Process – An automated e-procurement system, allows you to take control of all the purchase related aspects through a single software or via a mobile app, helping you to formalize rate contracts with your vendor, make payments, and process invoices, etc
- Greater Spending Visibility – The analytics provided by the automated e-procurement system helps the finance team to understand where exactly the spending is happening. Furthermore, they can streamline and curb the unnecessary expenses through the insights and analytics available in the dashboard.
- Establishing Governance & Compliance – By setting up an advanced approval hierarchies to process any purchase orders or invoices, you can increase the accountability and transparency. Also, by enforcing robust protocols and accounts payable procedures to categorize and automatically approve certain types of requests made by specified people to streamline the approval process.
- Effective Communication – Enhance team efficiency by allowing them to communicate and collaborate more effectively. The e-procurement automation software, has a LIVE chat feature through which finance teams can interact with one another for any quick clarification required. Procurement teams can also interact with the vendors to address any vendor-related issues. It helps in saving tons of time and increases the collaborative teamwork.
- Payment Automation: A robust software helps you to split payments and make vendor payouts, manage all your marketplace payouts to the vendor’s bank account and much more. Through powerful API banking, you can also schedule these payments. You can even set automated reminder notification through email / SMS to notify employees or vendors or critical activities. With this you can avoid making late payments and strengthen your relationship with vendors.
- Automated Accounting: Automate the digital bookkeeping process by eliminating the error-prone manual process of entering data into your accounting software. Integrate your accounting software like Tally, Quickbooks, Zoho, SAP, etc. with the platform and ensure accurate entry for the GL record including the associated amount, account, date, description, transaction number, and type for each transaction.
What To Automate In Procurement Process?
Purchase Requisitioning – In a traditional purchase order flow, procurement teams have to run from pillar to post to get all the necessary details like purchase details, rate contracts, vendor details involving a lot of manual work. Most of these tasks are repetitive in nature & the data is scattered over emails & spreadsheets. Procurement process automation allows organizations to automate the entire purchase requisition life-cycle and increases team productivity and process efficiency while saving costs.
Payables – To process a single invoice, sometimes it may take ages. Delayed payment may result in hampering the relationship with vendors, might end up in losing out on preferential pricing and the organizations might end up paying more exceeding their budget. With an e-procurement system, organizations can automate their vendor payments, process multiple invoices quickly and efficiently.
Vendor Management – Before releasing any purchase order, organizations need to evaluate the vendor based on product quality, location, delivery timelines, credit period, etc. Without a clear evaluation process, organizations will end up making a strain in their vendor relationships. By automating the vendor management process, procurement teams can streamline vendor selection, address any vendor-related issues thus forming a better relationship with the vendor.
Finly Suite To Automate The Procurement Process
Finly is a Finance Management & Governance Suite for businesses to automate, gain visibility & control business spending. The tax compliant platform comprises of a scalable & intelligent E-Procurement System. The powerful policy engine governs all business transactions & an integrated payment technology system allowing automated reconciliations. Finly helps you gain insightful reports in real-time on your account payables & removes all spend management hurdles while your business scales.
The benefits that CFOs can see after moving to FinlyFinance are the improved accounts payable governance, streamlined processes, total control on budget spend, increased productivity, effective communication, and collaboration, faster invoice processing, and the minimized risks associated with routine invoice payments. This yields to a better relationship with vendors by allowing them for preferred service and better deals.