Everyone knows procurement software is a crucial component that can automate most of your procurement functions, regardless of the size or nature of the organization.
An organization's procurement function consists of a sequence of processes to acquire the goods or services needed to accomplish its goals and objectives. The procurement function aims to locate the finest suppliers and collaborate to obtain high-quality products or services at competitive pricing.
The results of the procurement function directly affect the organization's cost-cutting plans. The procurement function prioritizes contract utilization, supplier performance improvement, sourcing cycle time reduction, risk and compliance management, and cost-saving goals.
COVID-19 unprecedently affected supply chains, causing problems for businesses worldwide. As a result, risk management and resilience will be crucial in the coming year. In a post-pandemic world, eProcurement is a dime that lets you enter the tough competition.
Read below to learn more about digitizing your procurement function using procurement software.
What is the best procurement software for your businesses?
Here are the top twelve best procurement software that you can opt for to automate your procurement process:
1. Kissflow
Kissflow Procurement Cloud is a simple and customizable Source-to-pay solution that aids businesses of all sizes to streamline their procurement processes. With Kissflow Procurement Cloud, companies can optimize their procurement strategy and boost process productivity.
This Procurement software combines eProcurement, Purchase Catalogs, AP Automation, Supplier Portal and Management, Inventory Management, Custom Integrations, and many other features into a single platform.
Best Features
Among many unique features, some of the top best features of Kissflow Procurement Cloud are:
- Vendor Management: Register vendors quickly and easily, use multilingual catalogs, and access vendor information instantly, like policy compliance, delivery quality, timeliness, and more. Rate vendors using key performance metrics and give vendors the ability to update their data quickly and get alerts on order and payment details.
- Integrations: Connect with other software solutions using simple web-based APIs, maintain a single version of up-to-date purchasing information, and instantly connect with business e-commerce vendors like Amazon.
- Spend Visibility and Control: Optimize spending with tailor-made rules, insights, and approvals, purchase data presented and concisely to drive actionable insights, and manipulate and visualize purchase data for the most convenient analysis.
- Process Performance Metrics: Process performance metrics in Kissflow capture and analyze process data to identify issues and improve performance. It helps businesses detect problems, determine their causes, and make informed decisions for process enhancement.
Pros
- Due to its flexibility, you can alter it to suit your company's requirements.
- Its straightforward installation enables you to go online within four weeks.
- The unified platform management tools provided by Kissflow ensure that the suppliers remain informed and involved at every step of the procurement process.
- The cloud option to access information from anywhere and anytime quickly.
- Kissflow's low-code platform is intuitive and facilitates easy user uptake.
- Easier integration with third-party tools and ERP systems.
- The ability to have multiple users and steps as part of a workflow form is a great advantage.
Cons
- Requires internet connection at all times. No offline option.
- Does not include autoresponders.
- Customer service is not up to the mark.
Pricing
Any plan from the following can be chosen:
Small Business: $750/month, billed annually
Corporate: $2000/month, billed annually
2. Coupa
Coupa is another great procurement software that enables organizations worldwide to get visibility into their organizational spending and control it to improve operational efficiency, lower budgetary and third-party risk, and increase profitability. It assists businesses in maximizing value through analyzing spending, optimizing strategic procurement, inventory control, and finance management.
Best Features
- Purchase Requisitions: Effective tools help users make purchasing decisions by surfacing their top choices. Additionally provides alerts that display discounts and other favorable terms.
- Coupa Open Buy Shopping: Open Buy offers a central location for comparing prices from all suppliers. Included are hosted catalogs as well as punchouts.
- Spend management Based on SOWs: Flexible forms offer instructions on how to enter the correct data for SOW-based operations. It also allows the online submission of timesheets and job details for performance tracking.
- Fraud Detection: Spend Guard utilizes AI and machine learning to identify fraud and errors throughout the entire expenditure process.
- Budget Tracking: By managing budgets in real-time, businesses can better understand the impact of spending before approving purchases. Real-time dashboards with budget meters provide a means to track expenditures.
Pros
- It is effective with oversights and audit trails.
- Reports can be swiftly created, saved, and accessed from PCs and mobile devices.
- Searching for vendors and managing large purchase orders are simple.
- Enhances teamwork between groups
- As per the feedback from multiple reviewers, the solution effectively calculates expenses and ensures transparency throughout the process.
Cons
- It has the potential to be much more user-friendly.
- Its third-party integrations are a bit complicated.
- Implementation and onboarding take time.
- To fully utilize the platform, users must undergo comprehensive training
- Coupa costs a lot more than its competitors.
- Suppliers can contact customer support only via chats.
Pricing
You need to contact them for a customized quotation for detailed pricing information.
3. Procurify
Procurify is targeted at mid-sized businesses. Businesses can consolidate their purchasing data with Procurify, allowing them to develop, monitor, and report requisitions, purchase orders, and expenses. In addition, companies can track purchases in real-time using their analytical reports, which can then be used to generate data-driven decisions.
Best Features
- Mobile App: Request, authorize, and receive items. You can also record things, photograph and save packing slips and receipts, and get alerts when something requires attention.
- Control Spending: Keep track of your purchases and spending plan; consult a buy pipeline to see what needs to be purchased next month and make appropriate plans.
- Faster Communication: Use the app to communicate rather than another tool's emails or texts, which speeds up decision-making.
- Audit Logs: Allows capturing, recording, and management of the complete history of purchasing documents, encompassing details of any modifications made, the individuals responsible for initiating the request, approving the purchase, and receiving the items.
Pros
- It is simple to use and is accessible across a variety of platforms.
- Provides better customer service.
- It has simple budget monitoring.
- It is a good platform for inventory management.
- Notifications from mobile apps are handy.
- It streamlines ordering multiple items by providing organized templates based on reviews.
Cons
- The mobile user interface could be better.
- It takes time to retrieve product information because scrolling is typically required.
- Budget data is only visible to approvers, not the entire team.
- Product interface and integrations can be improved.
- High server downtime.
Pricing
Procurify has simple all-in-one pricing of $2,000/month (Price may vary according to customer requirements)
4. Precoro
Precoro is a cloud-based procurement platform for SMEs that streamlines the procurement process. Key capabilities include catalog management, blanket POs, real-time budgeting, billing, visual analytics on spending at the departmental level and purchase order preparation and dissemination.
It consolidates all data centrally, enabling users to track orders, budgets, and approvals in a single location. Users can also specify their preferred deadlines for requests.
Best Features
- Robust Approval Workflow: Receive immediate notifications and customize the approval workflow based on departments and locations. Establish routing thresholds and policies, and approve them on a mobile device.
- Budget Management: Create budgets for many departments, locations, and customized fields. Set budget restrictions automatically, handle large uploads, monitor spending in real-time with a progress indicator, and get data-driven reports to help you make wise choices.
- Management of Suppliers: Establish a Suppliers Portal and a Suppliers List. Create unlimited product catalogs, manage contracts, keep contacts, and get supplier performance reports.
- User Management: Within a single account, exercise control over user access, employ two-factor authentication, and effectively handle multiple currencies, offices, and countries.
Pros
- Quick, efficient, and adaptable customer workflows.
- A platform with many users that promotes excellent collaboration.
- A thorough budget analysis provides more insight into your spending.
- The service team is always there to answer questions.
- Quick product catalog retrieval using the search feature.
- Delivers eye-catching custom reports.
- Using three-way matching eradicates fraud and inconsistencies.
Cons
- Precoro's user interface should be more straightforward.
- Information is no longer accessible after the deadline.
- It's challenging to integrate with other software and APIs.
- Creating and deleting open Purchase Orders and setting repetitive POs is difficult.
- Approval workflows don't support customizations.
- A mobile app can be helpful.
Pricing
Procurify has three offerings for different segments. The basic is Pioneer, a purchasing solution for explorers or small businesses; the next is Voyager, a financing solution for adventurers or medium-sized companies and larger companies; it offers Enterprise, which includes complete purchasing and financing solutions.
5. SAP Ariba
A single platform connects suppliers and buyers through the cloud-based supply chain management, expenditure tracking, and procurement technology known as SAP Ariba. It offers a comprehensive, integrated platform for managing everything from payments to sourcing. With SAP Ariba, your contract management, sourcing, and supply chain activities can be digitized.
Best Features
- Manage Supply Chain Interruptions: Responses to supply chain disruptions can be made both in advance and on the spot, thanks to robust analytics and real-time communications with suppliers. You can avoid expensive problem solutions by dealing with problems before they have a negative effect.
- Cost Savings: Using readily available contract and procurement management solutions can save money and improve process control. Earnings will improve by eliminating costly errors and utilizing ongoing sourcing cost savings.
- Boost Collaboration: Use a digital marketplace to manage sales cycles and assist in growth. Through SAP Ariba Discovery, buyers can post sourcing requests, and providers can reply with their information. Enables users to join Ariba Network, which has twice the volume of eBay and Amazon.
- End-to-End Features: Enhance the sourcing, procurement, financial, and supply chain management tasks with comprehensive functionalities that bolster the entire process.
Pros
- Workflows for approval are adaptable.
- Users can efficiently manage spend by category and coordinate supply chain spending policies with a unified view of all processes.
- Offers transparency into transactions involving purchases
- Standard layout templates are accessible through SAP Ariba.
- Good cross-platform compatibility
- Integration is simple
Cons
- Sending generated data via emails is slow and cumbersome.
- SAP Ariba's reporting capabilities are restricted
- Visual data representations need to be improved.
- New releases lack testing and stability
- It's challenging to contact assistance
- Invoice submission has difficulties.
Pricing
SAP Ariba has different pricing schedules depending on the region. It also has a fee calculator which calculates pricing estimates by calculating the number of purchase orders and Non-PO and PO invoices issued.
6. Fraxion
Fraxion's cloud-based procurement software and user-friendly solutions are used by mid-size businesses to automate purchase requisition, purchase order, cost management, and approval procedures, expedite AP operations, and enable expenditure analysis. It streamlines the procure-to-pay cycle while providing total transparency, budget insight, and policy compliance.
Best Features
- Expense Management: Streamline the expense management system by making it easier to complete and submit claims via the web or a mobile app, take a photo of receipts, and upload them, meanwhile ensuring that spending guidelines are followed.
- Travel Management: From the creation of a request to the handling of invoices, travel itineraries, incurred travel costs, and the handling bills against travel costs.
- Analyzing Capabilities: Gain transactional expenditure insights and budget, supplier, and employee spending analysis. Analyze the effect of spending before you do it. Then, use the reporting and business intelligence tools from Fraxion to make data-driven decisions.
- Integration and Automation: Integration with other software systems (e.g., ERP) and automation of manual tasks might be supported to streamline processes.
Pros
- It is simple to use and accessible from anywhere.
- Extremely customizable from the user's perspective in terms of workflows and approvals
- Excellent document and data storage
- The software may enforce spending policies, ensuring compliance with regulations and internal controls.
- Assists in receiving the correct approval for purchase orders and maintains a sequence count for POs
- Excellent support from the consultants
Cons
- When importing data into accounting software when another person is logged in, there are occasionally issues (related to batching).
- Software occasionally makes mistakes when making POs
- eRequester merely has the essential functionalities.
- Periodic updates are not sent or notified.
- No OCR functionality yet
- The small pop-up panels that appear when you first open a request might be a bit larger.
- There are no choices for varying language profiles.
- The ability to search could still be enhanced.
- The UI & internal workflow is not satisfactory.
Pricing
Fraxion has divided its solution into two offerings. One is an on-premises or hosted spend management software; the other is cloud-based. For more pricing information, you will need to send in a request.
7. Team procure
Team Procure is a cloud-based procurement software created to assist companies in managing operations like electronic auctions, bid gathering, request approvals, and order tracking from a single platform. Supervisors can manage internal purchase requests, assess monthly progress across all procurement operations, and compare vendors on an item-by-item basis.
Best Features
- Online Auction: Benefit from a competitive and effective environment by gathering your suppliers on a digital platform
- Bid Management: Utilizes a single platform to control the steps of bid gathering, supplier assessment, bid comparison, approval procedure, order, payment, and delivery tracking
- Request Management: Makes purchasing requests simpler for your central procurement team by integrating the system with your remote units, departments, projects, or field teams.
- Approvals: One can create custom approval workflows according to the need of their organization.
Pros
- Quickly create and manage purchase requests and orders
- Powerful approval workflows that are easy-to-use & user-friendly
- Easy Integrations with other software, especially accounting software
- Offers different kinds of bidding options
Cons
- Improvement in inventory management required
- Primarily used for auctions and bid gathering
- There is no base free version, only a trial.
Pricing
There are two plans:
1. Starter: $25 user/month - For users that need access to create purchase requests and approvals.
2. Business: $35 user/month - Includes requester teams and the ability to merge or split a request.
8. App zen
An AI-based procurement software called AppZen makes finances simpler by automating tasks requiring human expertise. For example, maximizing business finance automates manual processes, audits finances, and strengthens employee decision-making.
Best Features
- Identify Errors: Companies can use AI to find and fix errors in manual processing, double-entry accounting, overpayment of invoices, fraudulent expense claims, crossover payments, and supplier payments.
- Reduce T&E Spend: All employee expenditure reports are validated before being paid. Reveals double receipts, personal expenditures, and over-the-limit charges. Before being delivered, the company receives reports from AI-powered spending audits.
- Expense Policy and Compliance: AI-powered expenditure auditing verifies that T&E spending complies with policies before reimbursement. The company can identify unapproved expenditures, things that could get them into legal trouble, and spending that goes over their approach.
- Integration: Their integrations are easily installed with minimal IT effort and can show ROI within days of implementation.
Pros
- Provides the organization with enhanced process transparency and control over discrepancies by auditing data and spending in real-time.
- Artificial intelligence (AI) uses patterns and behaviors to identify any danger related to any expense.
- Any instance of non-compliance is quickly discovered and reported for the appropriate course of action.
- All invoices and non-PO spending may be categorized, matched, and approved without user intervention.
- It smoothly interfaces with the existing expense automation systems to enable real-time auditing.
- Assists the company in immediately identifying errors, waste, or fraud.
- Mastermind, a tool specifically created for the finance team, automates corporate spending policies to guarantee complete compliance and auditing of all spending.
Cons
- It does not offer a reporting tool that can be downloaded.
- Doesn't function properly with different currencies and international dates.
Pricing
Free 90-day Expense Audit. Contact App Zen directly for further pricing options.
9. PairSoft
To create the most powerful procure-to-pay platform for mid-market and large enterprises, PairSoft combines three products: PaperSave, DocuPeak, and WorkPlace. PairSoft helps organizations utilize internal and PunchOut catalogs to conveniently manage business vendor relationships and purchases. PairSoft even makes it possible to find what you need in only a few clicks by combining all relevant documents.
Best Features
- Integrations: PairSoft offers integrations with reputable ERPs like Microsoft Dynamics, Blackbaud, NetSuite, and Sage Intacct, so you can complete your work without switching between programs.
- Payment management: PairSoft Pay improves speed and security while streamlining AP payments from your ERP. Your team will save time and money by doing away with paper checks in favor of an electronic platform. This will reduce the amount of time and money that would otherwise be required to manage payments manually.
- Fundraising: By using less manual, paper-based procedures, you may free up your fundraising and advancement teams' time. The efficient, cloud-based platform from PairSoft increases productivity with automatic gift and donation processing, streamlined document management, and integration with well-known apps.
Pros
- Multi-language and Multi-currency capabilities.
- Role-based security and approvals are available.
- Converting travel requests to expense reports saves time
- Keeps track of every invoice and visibility into the workflow
- Seamless integration with other ERPs
Cons
- It takes time for a ticketing system to complete
- Long resolution time
- Multiple permission options make it confusing to set up routing rules
- More reporting features could be added
Pricing
Contact Pairsoft directly for pricing options
10. Open gov
OpenGov Budgeting & Planning is the first modern, full-featured cloud procurement software explicitly created for the planning and analysis needs of the public sector. Budgeting & Planning is the industry's most collaborative solution for budget process automation, human cost forecasting, managerial reporting, and general openness. As a result, it is trusted by hundreds of forward-thinking governments.
Best Features
- Compliant Solicitation Development: Its exclusive technology enables teams to create solicitations quickly by utilizing in-line comments, project monitoring reports, and automatic notifications
- Supplier Engagement and Awards: Leverages automated addenda and calendar changes, notifications and automatic alerts, in-line instructions, Q&A, live chat help, and workflow reporting to keep internal teams and suppliers in sync throughout the sourcing process.
- Asset Management: Industry-leading asset management software that manages every infrastructure asset: indoors, outdoors, above and below ground.
Pros
- They place a high priority on customer service.
- Designed for government departments
- Aid in bidding and contract management process
Cons
- Multiple attachments get confusing with large projects
- Users reported long processing times and glitches
- Lack of functionality when it comes to sharing permits with multiple persons
Pricing
Contact Team Procure directly for pricing options
11. Tradogram
Tradogram is a cloud-based procurement management application. Supplier management, purchase-to-pay, contract management, strategic sourcing, and order management are just a few of the connected modules that users can select from.
Managers of teams may keep an eye on purchases and access procurement data from any place or device. Additionally, the system has modules for tracking projects and budgeting that enable users to predict budgets for various project lines.
Best Features
- Customized multi-level management: Makes it easier to connect many departments in numerous places, all under one roof. Create and organize departments, monitor and track workflows, and assign managers and users access levels by configuring a collaborative administration dashboard.
- Report Builder: Creates personalized reports based on items, suppliers, locations, purchase order categories, document kinds, and more. The UI is simple to use. Create reports automatically to track orders at every stage. Real-time analysis and access to total spend visibility give each member the limited authority to examine spending data.
- Instant Messaging: To access real-time responses and speed up communication within a unified database, enable notifications. Before sending it off for final approval, let users and suppliers work together in real-time.
- Requisitions: Generate versatile requisitions that undergo supervisor approval before being converted into purchase orders. Access and monitor order requirements conveniently from a centralized dashboard.
Pros
- The software is simple to use and teaches staff members, and the support level is excellent.
- It lets users add budgets, create order approvals at various levels, and sync with Quickbooks.
- The modules' ability to exchange data makes conducting actions incredibly easy and practical.
- You may track orders running behind schedule and those scheduled to arrive using the dashboard tool.
- Customer support through chat support is highly responsive and resolves issues quickly.
Cons
- Emails sent to vendors often go to their spam folder
- Not enough reporting options
- Lack of customization
- It needs more refinement in specific modules
- The lack of integration with inventory and supply chain management
Pricing
Tradogram offers a free trial and plan for single users, whereas enterprise plans start from $15 per user per month.
12. Ivalua
Ivalua is a cloud-based procurement tool that aids companies in managing services linked to stock and bid management. It includes a user-friendly interface with capabilities for requisition management, risk management, budget management, and invoice automation that assure proper documentation.
Best Features
- Simplified Integrations: Continually integrate with popular SAP and ERP systems and other web-based apps while maintaining total transaction transparency. You can manage data and guarantee a smooth workflow by automating integration procedures.
- Tasks to Automate: You may maximize supplier engagement by automating work processes and invoicing procedures and aiming for high user adoption.
- Better Interaction: Promote workflow-enabled, secure collaboration that increases sustainability, fosters supplier-led innovation, and connects seamlessly with communication and other information-sharing technology.
- Industry knowledge: Provides services to businesses in all sectors that depend on outside products and services, including those in the automotive, construction and engineering, food and beverage, health care, manufacturing, retail, and telecommunications industries.
- Procure to Pay: Streamline your P2P process through digitization, ensuring consistent data and enhanced visibility while curbing abnormal spending. Embrace touchless efficiency with four-way smart matching and embrace the convenience of automated invoice management.
Pros
- Ivalua is a capable contract management tool with several capabilities typical of software in its class.
- Users can store contracts on the platform in a reliable contract repository for later use.
- Ivalua's collaborative contract authoring capability, which enables two or more users to work on a contract together, accelerates the contract creation process.
- It provides more customizations and spend analytics customizations as per the business requirement.
Cons
- Ivalua's customer service is occasionally unresponsive, and the company lacks effective customer support channels.
- The program occasionally has issues and slows down.
Pricing
Contact Ivalua directly for pricing options
13. GEP SMART
GEP SMART, previously known as SMART by GEP, is an advanced supply chain solution hosted on the Microsoft Azure cloud platform. Designed for large corporations, this system harnesses the power of AI, big data, blockchain, and the Internet of Things (IoT) to inform and enable strategic decision-making. Actively used in retail, manufacturing, technology, FMCG, energy and utility industries.
Best Features
- BOM Management: The platform enables users to easily create, update, and manage bills of materials (BOM) across various levels. It enhances visibility by providing a real-time view of all BOM items, facilitating collaborative sourcing and procurement activities among multiple users.
- Supplier Management: Gain real-time insights into supplier information and performance. Audit supplier performance using qualitative and quantitative scorecards and targeted surveys. The supplier portal allows suppliers to update profiles and respond to inquiries.
- Data Management: This module aggregates and cleanses spending data for analysis. Real-time savings tracking is enabled by combining data from auctions, RFx, and contracts. Users can capture supplier information across procurement tasks.
Pros
- The platform utilizes blended AI for enhanced process optimization. Real-time spend analytics provide granular insights with self-learning and correction capabilities.
- Savings validation and visibility tools give users an in-depth look at cost avoidance, cost reduction, signing bonuses and more.
- The cloud offers ample storage, a collaborative data environment, secure document storage, and real-time system updates without impacting daily tasks.
Cons
- Setting up and configuring can be complex and challenging, requiring significant time and resources.
- The integration of documents can occasionally lag.
- GEP Smart is slightly more expensive for smaller organizations than other market-available procurement options.
Pricing
Contact GEP SMART directly for pricing options
14. SourceDay
SourceDay, is a cloud-based SaaS solution that streamlines supplier collaboration and enhances business processes. It seamlessly integrates with ERP systems, providing real-time access to precise supplier information regarding lead times, pricing, and delivery dates. Notable features include purchase order management, AP automation, and RFQ collaboration.
Best Features
- RFQ Collaboration: Effortlessly compare quotes, bids, and awards, and review supplier submissions for each RFQ, all from a centralized dashboard. Digitize RFQ processes and easily filter supplier information based on status and deadlines.
- ERP Integration: Seamlessly integrate with any ERP system to obtain up-to-date and precise supplier data, automate purchase order changes, and foster supplier collaboration. Leverage ERP data integration to anticipate supply chain trends and make informed changes accordingly.
- AP Automation: Go paperless and streamline invoicing with ERP integration, benefiting from automated three-way supplier invoice matching and auto vouchers. Customize supplier preferences and perform line-level matching to prevent overpayment.
Pros
- Gain complete visibility across various purchase order management processes.
- Reduce manual labor and paperwork to eliminate human errors by automating the updating of purchase orders and invoices, ensuring a continuously updated record.
- Automate tasks, optimize processes and achieve comprehensive visibility across all operational levels by seamlessly integrating ERP functionality.
Cons
- Updating POs is not easy
- Supplier/vendor's infrequent updates can be a drawback, emphasizing the importance of aligning with them when using SourceDay.
Pricing
Contact SourceDay directly for pricing options.
15. Fairmarkit
Fairmarkit, is a cloud-based procurement software that serves as an intelligent sourcing platform. With features such as automation and data optimization, it enhances supply processes. This platform also offers comprehensive functionalities, including detailed report analysis, request management, vendor recommendations, and more, all within a unified interface.
Best Features
- Speed Analytics: Ensure compliance, proactively monitor KPIs and keep stakeholders informed. Effectively manage and optimize data, budgets, and resources.
- Process Automation: Gain real-time access to streamlined and automated data. Effortlessly identify vendors, score responses, and send bid invitations without the need for manual work.
- Vendor Recommendation: Automate requests considering product category, purchase data, and vendor response behavior, eliminating the need for labor-intensive manual workflows.
Pros
- Access a free trial to quickly browse before making any investments.
- Automate and streamline the database workflow with a simplified, intuitive interface.
- With advanced analytics and automation processes, streamline workflows to improve efficiency.
Cons
- Chat functionality is not great.
- There is still room to improve supplier recommendations.
Pricing
Contact Fairmarkit directly for pricing options.
Learn more about procurement software
Although procurement software can automate most of your procurement functions, you must understand why your business needs one.
What is procurement software?
You might have heard about different software that can automate business functions and make lives easier. Similarly, procurement software is a computer program or application that allows businesses to automate purchasing processes, order management, inventory management, supplier management, contract lifecycle management, and invoicing administration.
Your enterprise resource planning (ERP) and accounting software can be integrated with your procurement software; These integrations are essential to ensure a seamless data transfer and maintain information in a centralized hub.
Additionally, robust procurement management software can perform the following essential procurement functions smoothly:
- Generating purchase requisitions based on requirements and adding them to the database
- Auto-flipping purchase requisitions to purchase orders
- Approving purchase requisitions through a sophisticated approval process
- Submitting pending purchase orders for approval or rejection to the appropriate employees
- Sending reminders to approve purchase requisitions and orders
- Automating the electronic supplier submission of purchase orders
- Executing a three-way match between purchase orders, goods receivable notes, and invoices to prevent fraud
- Providing visibility on inventory management and helping in avoid shortages
- Conducting financial operations upon the arrival of items, supplies, and services
- Gathering information and performing trend analysis to enhance and increase revenues
- Simplifying administration and standardization across several platforms
Why do businesses need procurement software?
The manual purchasing process takes longer and has more room for error as human intervention is involved. To realize the need for procurement software, consider the traditional procurement process:
Someone identifies a need and submits a purchase requisition form to the relevant department head for approval. If a vendor has been used previously, the process usually goes smoothly. Once the requisition is approved, the buyer completes a purchase order form and sends it to the supplier, either by fax, email or occasionally by postal service.
Company policy regarding bids must be adhered to if the product or service has never been acquired before or if a supplier is employed for the first time, mainly if it is a costly item.
In this scenario, the buyer must submit numerous requests for quotes (RFQs) to vendors, wait for the responses, decide, and then submit a purchase request for approval with the quotes stapled to it.
Following approval, the item is then ordered. Next, vendors and the business may enter into a contract, wherein the terms must be negotiated, and contract management must be put in place to guarantee compliance.
The order is examined for accuracy after it has arrived. Orders and invoices may be delivered together or separately. However, before it can be processed for payment, the accounting department must receive both the invoice and the delivery confirmation.
In a conventional system, this procedure is carried out by hand and takes days to complete on a cycle. Many human-prone mistakes are often involved, resulting in costly resolution costs. You might miss the deadline to submit payment to the supplier, which can cost you penalties.
Moreover, communicating with the internal team or suppliers through calls, messages, and emails creates confusion and obscurity. In addition, when the procurement process is executed manually, it is challenging to manage the performance of your suppliers and keep track of it.
Contrarily, procurement software enables a large portion of the process to be automated, and the entire process is electronic. So let's explore some of the fantastic benefits of procurement software.
What are the benefits of procurement software?
Businesses that use e-Procurement solutions gain various advantages. These include but are not limited to the following:
1. Lowered costs
Every organization wants to lower its costs and increase its savings. However, if you are looking for immediate cost savings, then procurement software can help you. The University of Jakarta conducted a thorough study on procurement software implementations and found astonishing findings.
By implementing procurement software, organizations can gain the following:
- 64% decrease in off-contract spending
- 66% reduced requisition to order cycle times
- 58% cost savings from requisition to the order
- 20% growth in spend under management
Another research found that a typical paper invoice costs $10.08 to generate and takes 8.3 days to complete, but an automated invoice only costs $2.18 and requires 2.9 days. Besides the paper costs, manual procurement processes involve storage costs to store all the essential documentation.
Additionally, there are indirect advantages like incorporating best practices into the procurement procedure, institutionalizing the processes, lowering reliance on people, enhancing supplier engagement, increasing transparency, auditing, and so forth.
2. Enhanced transparency
Your purchasing system can become more transparent thanks to procurement software. In addition, the purchasing dashboard becomes more uniform due to the centralization of supplier data, purchase data, and integration with ERP, which also raises visibility to organizational leadership.
With the help of procurement software, you can verify and track the following essential tasks in real-time:
- Shortlisting of suppliers
- Evaluation techniques
- Number of Quotations
- Negotiation Strategies and Results
- Orders for Purchases
- Incoming Requests and Approvals
- Taxes, Payments, and additional information
- Adherence to agreements/obligations
With such fine-grained visibility, transactional problems impeding managers' ability to meet organizational objectives come to light, and the pattern over time becomes apparent. The path to confronting the difficulties head-on is paved by insights and objective data, and little incremental actions progressively result in a more significant shift.
3. Greater productivity
By adding more and more categories, creating catalogs, and establishing rate contracts, you can bring all of your purchasing activities under the procurement team's management and shorten the procurement cycle time.
As per APQC, Organizations with automated ordering processes performed better in procurement than those without. In addition, organizations that employ a system to complete the process instead of simply using a manual or spreadsheet-based method have significantly shorter PO cycle times.
Compared to businesses that use a manual/spreadsheet approach, which takes 35 hours on average, organizations that have automated this procedure have a shorter cycle time, i.e., 24 hours to place a purchase order. However, this 46 percent increase is not negligible; it equates to 11 hours for each PO that could be used for more beneficial endeavors.
4. Greater control
Procurement software makes managing compliance, audits, and legal challenges easier while standardizing your procurement and approval workflow for every transaction. You can easily track the performance of your suppliers because your contract with them is centrally located. As your organization expands, controlling variation and scaling the standardized process becomes simple.
In addition, with procurement software, the supplier-buyer relationship achieves a new high due to enhanced openness, agility, and long-term visibility; the procurement department can concentrate on strategic categories and deliver value where it counts.
5. Smooth communication
Procurement software offers an efficient collaboration gateway, which enhances internal and external communication. In addition, it has centralized storage for all communications and documentation. As a result, team members who work in procurement have a real-time perspective of all process phases and are aware of crucial turning points.
Users can receive automated reminders and updates, so they know their requests' status. In addition, suppliers can access information about their contracts with your company and connect with your procurement team using the program.
How to choose the best procurement software?
Before selecting a procurement software, you must identify its primary use, how it will fit into your overall procurement strategy, and who will use it. Here's a step-by-step guide to help you choose the best procurement software for your organization:
1. Identify the stakeholders
The first step is to identify the end users leveraging the procurement software. The need for specific features may vary from one user to another, mainly depending on their position or role. Explore what features they expect to see and what features could be helpful in their role.
For example, if this software will be used by accounts payable or finance teams, then it must have options for seamless integrations with other accounting software such as Quickbooks. Similarly, if the executive team will also use it, it should have robust reporting features backed up by real-time data that can help the team make informed decisions.
2. Audit your current process
Processes help determine how to get things done and also have a significant impact on the outcomes. If your current processes are inefficient, then it is most likely that deploying software will only bring chaos to an already tangled state.
You must conduct an audit to understand the workflows and how things usually get done at your organization. This audit will also help you determine what features might be helpful to overcome the identified problems in the current process.
3. Find out your needs
After following the first two steps, you can determine what you need in a procurement process. Through these steps, you should have a set of identified problems that your organization is facing.
List every possible one of them. Now arrange them in the order of priority. Next, look for software with features that can solve your top-priority problems.
4. Define the scope and the budget
By defining your usage scope, you can be confident that you're only looking at Procurement Software choices that can handle the added demand.
To make sure the software in question is a net improvement to the business, it's also crucial to decide how much you're ready to spend and what kind of quantifiable return on investment it must offer.
5. Set a timeline
Many transformation projects take a lot of time to complete, eventually making them obsolete. Therefore, you must set a timeline that clarifies the internal team and external stakeholders.
Your timeline can also consist of specific deliverables to be achieved within the deadline. For example, the software will be deployed throughout the organization in June, and the next two weeks will be spent on training.
6. Make a selection
Once you have clearly outlined your expectations, The final step is to compare your desired procurement software to the possibilities on the market.
Before making a purchase, conduct extensive research, look for customer testimonials and avail trials to explore the software's features, interface, ease of use, customer service and onboarding process to get a complete picture.
Endnote
The procure-to-pay cycle includes all communications between you and potential suppliers until products are delivered to your company and money is received by the supplier. A software program created to manage the procure-to-pay cycle will meet your procurement needs if you're looking for a comprehensive solution that elegantly packages your purchases.
Whatever procurement software you choose should have a manageable learning curve so that you can swiftly onboard your team and your existing procurement data to minimize disruptions to your procurement activities in the interim, additionally while choosing procurement software, keep your long-term organizational goals in mind to expand swiftly along with your procurement software.
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