It’s possible to achieve full visibility into your procurement processes with the right approach. As a result, you’ll be able to reduce your expenses and maximize the value of every dollar you spend. Take these six steps and you’ll be well on your way to managing your entire procurement process as effectively as you possibly can.
1. Make Sure Everything Is Recorded in a Central Location
Instead of running around your offices trying to track things down, you would be much better off implementing a procurement system that requires all members of the team to store relevant data in one centralized location. That way, whenever you need to access specific data, you’ll know where to find it right away—thus giving you better insight into where money is flowing.
2. Migrate to an Electronic Procurement System
Just because you’ve been using paper to manage your procurement needs for quite some time doesn’t mean you should keep an outdated system in place.If you haven’t made the switch yet, it’s time for you to migrate to an electronic procurement system that makes tracking purchases, approvals, associated documents, and other pertinent data incredibly simple. Instead of manually tracking down purchase orders, invoices, and inventory, you can access your new system to find that information in a matter of seconds. This streamlines the entire procurement process, thus giving you more time to focus on other important facets of your operations.
3. Integrate as Much Automation Into Your Process as You Can
Though you might not be able to automate everything, chances are that there’s a lot of clutter in your procurement workflows that slows your company down.For example, imagine your team is still relying on old procurement tools. When invoices come in, your employees manually process them. Not only does this take a lot of time, but it also leaves your company vulnerable to human error.By automating the processing and payment of invoices, however, your company can reduce the time it takes to settle your accounts while drastically reducing costs as well.
4. Get Rid of the Time-Consuming Approval Process for Routine Purchases
You don’t need your CEO to sign off on a routine order for new office supplies.If your organization makes many recurring purchases, you may want to update the approval process so that executives don’t need to approve every order themselves. They’re busy enough as it is. Although you will certainly want to run major expenditures by them, the routine and recurring smaller ones serve as speed bumps that can severely slow companies down.To speed your procurement process up, consider curating a catalog of predefined vendors and items that a select group of employees can order directly from that require fewer or, in some cases, no approvals. To reduce significant rogue spending, you can also implement spend limits that prevent employees from racking up major bills.
5. Train Your Team Thoroughly
As you adjust your procurement process, you must make sure that your employees know what’s newly expected of them as changes are implemented.In addition to hands-on training sessions, be sure to create documentation of your new processes that employees can refer to in the event they’re unsure how to keep things running smoothly.
6. Communicate Clearly and Regularly to Keep Your Team Informed
One of the easiest ways to gain procurement visibility is by keeping your team updated and encouraging input on ways to constantly improve or adjust processes to boost departmental efficiency.When you bring every member of your procurement team into the process and maintain open channels of communication, you’ll gain even more insight into your spend. Nothing will be done behind closed doors any longer.Additionally, improved communication gives managers and employees alike more ownership over spend management in a collaborative manner. As more members of the procurement team start talking with each other, accountability increases.
Achieving perfect visibility into procurement is hard work. But it’s not impossible. By taking a proactive approach to spend management, using modern technology, updating your policies, and cultivating an open and collaborative environment, you can gain comprehensive insight into your spend—thereby enabling you to make better decisions.The end result? A healthier, more competitive company and a more robust bottom line.
Editor’s Note: This is a revised and updated version of a post that was originally published June 29, 2017.
Learn more on procurement visibility with our guide to Solving Spend Management