Purchasing or Procurement is the most essential component of any organization. To produce its own goods, organizations must procure various goods and services from vendors that would help them achieve the goal.
The efficient procurement process ensures that the organization saves costs, works with on-time delivery suppliers, and eliminates any delays in the chain.
Digital Procurement processes can be implemented at any organization which would result in alignment with corporate priorities.
What is Procurement Process?
Procurement is the generic term given to the collective processes that help organizations acquire raw material and goods for further production of finished goods.
Some of the processes are:
- Purchase Request (Requisition) – It is an internal document that a person with a higher-level position may approve such as a manager or finance head. These documents record what things have to be purchased.
- Purchase Order – An external document that the organization sends to its vendor of choice, It contains details related to the goods, payment terms, delivery terms, etc.
- Goods Receipt Note (GRN) – An internal document generated after the material has been received and checked for any defects, if everything is in order the GRN is generated and forwarded as accounts payable.
The problem with traditional procurement
Traditional procurement solutions are highly dependent on paper and excel sheets which can turn into an inefficient way to process procurement very easily.
From a Purchase Request to GRN, 5-6 steps are required at a minimum including approvals. This can be hard to manage and also time-consuming.
A paper-based purchase order can take up to 6 hours to convert from a purchase request to a purchase order if everything and everyone is in order, organizations on day to day basis create multiple requests and multiple orders. Traditional paper-based and spreadsheet-based procurement systems are very inefficient and time-consuming in this case.
What is a better alternative?
A better alternative for managing procurement with processes such as purchase requests and purchase orders would be a service that can easily integrate all these services while being accessible from everywhere and with more user-friendly features.
Automating these processes would result in:
- Efficiency – Digitally controlled procurement is faster and more accurate and also ensures that no business standard is bypassed. Efficiency results in managers receiving requested items in time, employees spend less time on paper-work or correcting errors.
- Analytics – A digital procurement system like Procflo helps organizations collect data that can be used to derive better results and have a positive impact on the bottom line.
- Lower Risk – Automation improves transparency across the board with pricing, taxation, supplier relations, and live inventory values. All of these reduces the risk of having a halted production line.
How can you implement digital procurement?
For any digitization of the procurement process, the first place to start would be Procure to Pay (P2P). This is the area that often involves the most repeated work.
It is very simple to automate a process like this using Procflo, It helps organizations manage procurement, Inventory, and vendor management, and it is free to use for growing businesses.
Procflo helps organization automate the complete Procure to Pay cycle at any organization, with its robust features like:
- Purchase Request Generation
- Purchase Order Generation
- Purchase Request/Order Approval
- Vendor Management
- Inventory Management
- Customized Notifications
- Web and Mobile Apps
Procflo is a complete Procurement and Purchasing software for any organization.
Procurement is the most strategic and important function of any operating business. A well designed and effective technology solution helps save time and create transparency for the complete process.
There is no need to rely on spreadsheets or paper for any purchase requests, orders, or invoices. These techniques are inefficient and slow you down.
Streamline your organizations procurement and purchasing using Procflo.
Get started by clicking here. It is free to use software with robust features for businesses.
Read more about Benefits of Business Automation here.