Getting your company to the next level starts with fully optimizing your procurement department.
That’s because, when it comes to purchasing, most organizations are afflicted by a number of inefficiencies. Money is wasted. Fraud is rampant. Cash flow problems materialize. Employees are demotivated.
The good news is that it’s quite easy to improve procurement efficiency.
By investing in a modern e-procurement platform, your company can achieve complete procurement visibility—thereby increasing profitability and driving competitive advantage.
Here are six ways your company will benefit by achieving 100 percent procurement visibility.
1. Cost savings
Non-core spending accounts for up to 40 percent of the average organization’s revenues. Unfortunately, most companies only scrutinize about half of those expenditures. This is due to the fact that tracking spending across an organization is quite difficult for companies that haven’t yet migrated to a modern e-procurement solution.
Companies that have made the switch, on the other hand, benefit from complete visibility into their spending. With full procurement visibility, it will be very clear as to which expenditures are necessary—as well as which accounts or departments could use some extra attention.
Right off the bat, you’ll be able to see where you need to invest your energies the most to reduce your expenses and increase profitability.
2. Reduced fraud
According to one report, nearly 41 percent of purchasing managers believe that procurement fraud is a significant threat to their organization. Whether that’s kickbacks, billing fraud, or buying more items than necessary, procurement fraud can drastically hold organizations back.
With full visibility into procurement, companies are less likely to experience widespread fraud. Each purchase is easily traceable. Purchasing managers can see very quickly who bought what and when—and determine if those transactions were necessary and authorized.
3. Reduced rogue spending
Fifty-four percent of employees admit that they’ve gone rogue before (i.e., they’ve made purchases without going through the proper authorization channels).
It’s difficult to get rid of maverick spending altogether. But with a modern e-procurement system in place, you’ll have enough visibility that enables you to determine where rogue spending is occurring. Armed with that knowledge, you can then begin to figure out what you need to do in order to rein it in.
This is important: Believe it or not, a 5 percent to 10 percent reduction in rogue spending can translate into millions of dollars in annual cost savings for the average large organization.
4. More working capital and better cash flow
With complete procurement visibility, you’re able to easily determine inventory levels and see when you need to order more supplies and materials. You won’t have to worry about ordering too much of something at once—or waiting until it’s too late to submit your next order.
Instead, you can rely on your modern e-procurement system to let you know with certainty what your inventory levels are and when you need to order again. This enables you to stretch out your cash as long as you possibly can—freeing up working capital and giving you the cash flow needed to grow your operations.
5. Better deals from suppliers and vendors
Companies that rely on old procurement systems—whether they are paper-based or run on spreadsheets—have a very difficult time determining if they are stretching out their dollars as much as they could be.
When you have complete visibility into your purchasing department, it’s much easier to see if you’re taking advantage of all available payment discounts and using your bargaining power to secure the best deals from suppliers and vendors.
6. A more productive and engaged workforce
Every company is only as strong as the people who power it.
The best workers are drawn to companies that use the latest tools and technologies. When you invest in a modern e-procurement platform, not only does your company become more efficient and cost-effective, but you are also doing your part to engage your most talented workers—and attract very skilled candidates when new positions open up.
As a result, your team will be happier and more productive—which should bolster your bottom line.
To learn more about how your organization stands to benefit from achieving complete visibility into your spend, check out our e-book, The Complete Guide to Achieving 100% Procurement Visibility.