Did you ever find yourself thinking that it would be nice if the purchasing process in your organization works more smoothly and efficiently?
You may have had trouble with lost paperwork and invoices which do not match purchase orders or issues with purchases exceeding the budget. Whatever you are struggling with in your procurement solution with purchases signifies that it’s time for a change. Procurement automation systems are becoming more widely used and popular each day.
But at times, it becomes hard to understand when it is time to make the switch from traditional processes to a digital or automated process. Challenges that the procurement department has to face are a reliable indication that your organization can benefit from a good procurement system.
When Problems Grow
It is common for organizations to develop issues in their procurement team when they grow. When your organization is increasing, solutions that work fine, in the beginning, cannot always keep up with the new workload. Such problems may include:
- You get the delivery with all the paperwork done correctly, but there is not enough money in your budget to cover the purchase.
- You receive an order with an invoice and packing slip but cannot find a purchase order (PO) that matches it.
- Delivery seems to be missing items, but there is no PO on file which would prove what you had ordered.
Hence, sorting out such types of hassles is expensive as well as time-consuming. The more time you take to let things go on without upgrading the procurement process, the worse it is going to get.
Challenges Faced by Using Manual Paper-Based Systems
Manual and paper-based purchasing can turn out to be time-consuming and cumbersome. Firstly, the department with a requirement files purchasing request. Then the accounting team or supervisor decides whether the request fits in the merits approval and budget.
Secondly, the purchasing team submits a purchase order to the vendor. If the product is the one that your organization has not used previously, then this can take extra time.
For large purchases, it is good to get price quotes from multiple vendors before selecting one. Lastly, your organization receives the goods and services you ordered. Now, it is time to check the purchase order against the packing slip and invoice. Moreover, you can double-check the record and delivery of all items on the received goods document for 3-way matching.
As all these steps can become quite cumbersome in a paper-based process, it is good to skip a few of them which can lead to problems down the road. Moreover, if everybody follows your organization’s buying policies, human errors can take place, and paper documents can get lost as well.
Streamline the Purchasing Process
Automating procurement follows the basic step as the purchasing process in a manual paper-based system. It makes the complete process a lot simpler by streamlining all the steps through a central program.
You can simply log-in to the procurement solution and shop from a list of pre-approved items and vendors. For the buyers who need authorization, it is easy to submit purchasing requests through the system.
Once the time comes to create a purchase order, the procurement solution includes custom templates which make the process easy. Also, you can submit purchase orders directly to vendors through the software if they accept digital PO.
While doing this, the solution monitors every single file generated, so you never lose track of crucial paperwork. Moreover, you can also get an accounts payable system that easily integrates with your purchasing software to make things easier.