7 Tools You Need For Your Procurement and Vendor Management
Anyone in sourcing is aware of how many variables influence the success of a purchase order process. There is a lot that can go wrong when it comes to managing vendors, tracking purchase orders and budget approvals, conducting three-way matches, and other tasks. Getting the right tool is more than just a good business decision that will earn you a pat on the back or brownie points at work.
Choosing the right procurement management software can mean the difference between a successful procurement team and a frustrated group of people. Especially those who are scrambling every day and dealing with frustrated customers, coworkers, and finance team members.
To help you choose from the many procurement tools available, we’ve compiled a list of the top 7 procurement management tools:
1. True Cloud-Based Procurement Software
Purchasing does not take place solely in the procurement department. These transactions occur frequently and at all levels in a business. Ranging from purchasing goods and services for day-to-day business operations which are called indirect procurement, to expenses incurred by employees on your company’s behalf. Also, with remote work realities and looming uncertainties, access to mission-critical systems is essential. In this regard, on-premise vendor management and procurement software fall short.
Cloud technology, which can be accessed from any location and on any device, is used by today’s most competitive businesses. Your entire team is empowered to carry out their responsibilities within a proactive spend management framework. With cloud procurement software, the management framework enables collaboration, keeps them up to date, ensures effective vendor management, and guides their purchasing decisions.
Cloud solutions are also less expensive and easier to use. They are less expensive to maintain (your IT department will thank you), secure and frequently updated.
2. A Mobile-Enabled Solution
If the vendor tools in your procurement software are also accessible via a mobile app, your team will be even better equipped to be more efficient and cost-conscious. It works similar to taking the process of physical trade show booth design and building to the virtual world.
Users can use such platforms from anywhere to request, claim, review, and approve purchases and expenses. From their mobile devices, your team can easily access system-configured currencies, tax rates, budgets, approved vendors, and cost centers.
Processes are more efficient and expedited in this manner. This makes the company more agile while maintaining proactive control and enabling an informed and responsible spending culture.
3. Tools for Streamlining the Purchase Order Process
Processing paper-based purchase orders expose businesses to the risk of lost orders, inaccuracies, massive delays, and bottlenecks, all of which can lead to higher costs.
Use a procurement tool that automates vendor management and allows you to digitally track and generate purchase orders and any attachments. Employees can use such systems to centralize purchase orders, check the status of purchases, and match POs to requests, invoices, and receipts.
4. Purchase Order Revisions or Change Orders
Mistakes happen: the wrong item is shipped, the vendor sends too many widgets, or you ordered ten keyboards but now require fifteen. In the procurement process, these scenarios are all too common. Many systems allow you to issue change orders, but keeping track of these changes – especially after the ninth or tenth revision – can be difficult.
Look for a procurement tool that connects all of your change orders while preserving the integrity of your approval structure. Change authorizations and a continuous audit trail are required to manage risk and easily keep track of:
- Who requested the modifications?
- Who gave them their blessing?
- And why are the changes being made?
With this feature, you can keep track of all activities related to PO revisions.
5. AP Workflow Management
Is your team still manually processing and paying invoices? If this is the case, your workflow is moving much slower than it should, putting you at a disadvantage.
There is a simple solution: AP workflow management allows organizations to track, approve, and process invoices much more quickly and affordably. Two-way or three-way invoice matching is easier, faster, and more efficient, lowering your purchasing cycle and processing costs.
Reduce the administrative burden on AP teams by using procurement software to automate everything from vendor approval to your entire procure-to-pay cycle. Not only do these procurement tools save time, but they also minimize the chances of overpayment and duplicate invoices.
6. Spend on Analysis Tools
Having access to tools that provide visibility and the ability to analyze and report on spend by employees, departments, and vendors empowers you to identify cost-cutting opportunities and make data-driven decisions. Get a complete picture of how your company spends its money. What you can’t see, you can’t manage.
By gaining insightful information into an employee’s, department’s, or entity’s spending, which vendors they’re trying to purchase from, and the frequency, you can not only implement cost-cutting measures or budget modifications as needed but you’ll also be armed with supportive evidence when negotiating costs with vendors. Your data will reveal price variances as well as the top-performing vendors from whom you should be purchasing, simplifying your consolidation processes.
Spend analysis tools for procurement provide you with a competitive advantage. You will no longer have to make decisions on the spur of the moment; instead, you will have on-demand access to procurement and vendor management insights that will help you make informed decisions that will drive bottom-line results.
7. PunchOut and Internal Catalogs
Rogue spending costs businesses millions of dollars each year. Having effective procurement and vendor management tools to eliminate maverick spending with unauthorized or uncontracted suppliers could exponentially increase your savings potential.
From standard vendor approval processes to hosting internal catalogs to vendor PunchOut, make sure your procurement software includes these advanced vendor tools that can help you manage more spend.
Internal catalogs allow procurement teams to create and manage approved vendor catalogs, price lists, and template sets for repeat purchases and fixed ordering. Within a predefined purchasing framework, users can shop and review product details.
Procurement and vendor management do not have to be difficult. Utilize the features and tools provided by cloud procurement software to digitize your processes, manage your vendors, and increase visibility and control overspending. Also, working with a reputable sourcing firm like MatchSourcing can level up your business management and save your time.
You can elevate your processes and achieve your procurement KPIs by using effective procurement tools that provide a complete solution for proactive spend management.