A procurement system can solve this problem through purchasing frameworks. You do this by making purchase orders mandatory. This can be done in a variety of ways. Most common are:
- Connecting supplier web shops to the system;
- Connecting a purchasing catalog to the system; or
- By making free text requests mandatory in the procurement system.
After registering the purchase request, it is time for approval. Every company has their own rules regarding the approval process. Purchasing processes vary and flexible purchase to pay software take this into account. For example, an easy to set up workflow that allows the process to follow exactly how the company is used to working.
Information becomes insight
Linking the invoice to the purchase request gives the company direct insight of the expenses. This makes up to date spend reports possible, giving the department detailed and real-time data on supplier performance. This can be very useful for assessing a supplier.
Going one step further, contracts can be coupled with procurement and an invoice. This creates a three-way match and makes the entire process more efficient and secure. When the invoice data is matched to a purchase order and a contract, the system will automatically approve the payment. There is no longer a need for a manual check if there is a complete match.
This works especially well for recurring costs, such as housing, telephone bills, or lease costs.
By recording the purchase in one system, a body of data is created that a buyer can learn from to get a grip on the expenses. The data will tell exactly how much has been purchased per supplier, giving the buyer the data to negotiate a new discount when the current contract needs renewal.
Buying intelligently can give the organization a competitive advantage. Procurement software helps with smarter purchasing by forcing compliance, securing approval, linking invoices and contracts to purchasing and by making useful spend reports.