Procurement solutions are internet-based tools and strategies to help companies smoothen their procurement process. Their main goal is to improve companies’ procure-to-pay (P2P) cycle and does so through automation and by using the latest technologies. Generally, digital procurement solutions help companies to handle everything from order, purchase to payment. In addition, it saves time, cuts costs, and simplifies a company’s procurement process skillfully.
Functions of New-age Procurement Solutions
Surprisingly, the Procurement Software industry is supposed to expand at a 9.6% Compound annual growth rate (CAGR) from 2018 to 2023. This is because the latest procurement solutions optimize invoice approval, purchase order, vendor management, etc. In addition, it automates purchase requisition, contract management, payment process, etc., within a single platform.
Yet, selecting the best procurement solution for your company is a complex process. Initially, you will need to recognize your business needs and analyze the procurement software solutions available in the market.
So, read on to find which procurement software function is best for your firm.
- Purchase Requisition
Operation staff of a company makes purchase requisitions when they need to purchase goods or services. If they do this process manually, they send the purchasing requests on paper. In some cases, they send an order directly to the suppliers.
The procurement Solutions helps to create purchase requisitions online from a list of pre-approved items. Once created, the P2P software routes these purchase requisitions from the user to the supplier without manual interference.
- Purchase Order
There used to be an enormous gap between a purchase request and order approval time in the old procuring process. However, with new software solutions, approved purchase requisitions get converted to purchase orders in no time. The POs are then sent online to the vendors. Best of all, the system also notifies the buyer once the purchase order is approved.
- Invoice Approval
Earlier, it was a droning task to match invoices manually with purchase order and goods receipts. However, procurement solutions software has seamless matching capabilities. In addition, it carefully stores every purchase transaction.
- Vendor management
Lack of coordination among suppliers & clients can be an obstacle in the supply chain process. Performance-related issues such as wrong order delivery, low-quality goods, and disputes can harm a company. P2P solutions assure the best vendor control and lessen delays at work effectively.
Best Procurement Solution Features that Companies can Benefit From
In this digital world, every business is dependent on modern technology. So, if you are in search of the best P2P solutions for your company, here is the list of P2P solution features that you must use. It will help you save time, reduce errors, cut costs, etc.
- Three-way matching tool
Matching invoices manually with the purchase orders and goods receipts is a tedious task. However, innovative P2P solutions can cross-check invoices with respective purchase orders & goods receipts quickly.
- Auto-initiated POs
Purchase orders were sent to the suppliers through fax earlier. However, with digital solutions, creating purchase orders and approval of requisitions are done digitally. All orders are auto-initiated once the request is approved.
- Requisitions to RFQ, RFI, & RFP
A strategic procure-to-pay solution automates requests for information (RFI), request for proposal (RFP), request for quotation (RFQ), etc. It can convert a purchase requisition to a new RFQ in a click.
- Paperless Processes that Save Time
The entire procure-to-pay cycle used to be time-consuming. However, with modern software solutions managing all purchase-related paperwork is fast.
- Vendor Screening to Minimize the Risk of Conflicts
Days of issues like disputes, delays in delivery, subpar quality, cost and time overrun, etc., are gone. With the newest features of P2P software, one can verify supplier data including, financial and credit risk data, business reports.
- Effortless Vendor Enrollment Anytime!
Today, P2P software solutions allow companies to shortlist preferred vendors based on their past performance, reputation, and more.
- Companies can take Corrective Actions Quickly!
With intelligent and innovative P2P solutions now, firms can initiate corrective action plans. They can cut off sub-par suppliers by keeping track of their performance.
- Build a Profitable Relationship with Decent Vendors
P2P software solutions provide detailed and clear visibility of vendor performance metrics. It delivers a real-time overview that shows which vendors are reliable. Therefore, it helps companies to examine the actions of vendors. In addition, it helps build a better relationship with that vendor who is worthy.
Advantages of Digital Procurement Solutions
Today the business world is affected by digital transformations too. Fortunately, firms know what the benefits of a digital P2P solution are. So let’s jump into the advantages that digital P2P solutions offer you.
- Happy User and Customers
There is no doubt that tirelessly working on keeping order, purchase, and payment reports on paper is boring. Customizable dashboard, online reporting, real-time alerts, etc., makes every P2P officer happy. Therefore, it is wise to use the latest digital solution.
- End of tiresome Tasks
A procure-to-pay process is enormous. It includes finding goods and agreeing to terms with vendors, etc. It involves acquiring goods & services, etc., too. In addition, the P2P process also includes working with an external source, a competitive bidding process, etc. By automating this process, P2P software reduces the work pressure daily.
- Considerable Return On Investment
Procurement solutions come with a price. The software solutions are often costly. However, over time, you can save a large amount of money & surpass initial spending. Now, this is because P2P solutions reduce errors and make the procuring and payment process faster.
- Helps with better Decision Making
With a P2P software solution, an industry gets better visibility & actionable insights into their P2P processes. Now, these forecasting tools help them to create a roadmap for massive gains.
- Boosted Agility
A smooth procurement process depends upon effective interaction with all relevant areas of business. With the help of the newest P2P solutions, firms can keep everyone in the loop & analyze factors, including;
- Pricing structure,
- Timeline of delivery
- The scope of work
- Terms and conditions
- Cut Costs and Save Money
Every business knows that fewer errors mean tremendous monetary gains, meaning a company has to spend less money on resolving or cleaning up problems. Therefore, by using a digital software solution, a company can ensure cost reduction in undue issues.
- Easy Way to Pay for Goods or Conducting an Audit
Earlier the payment process after the goods are received used to take a substantial amount of time. The financial had to ensure that the payment amount matches the invoices & purchase orders. The audits used to take a long time. However, P2P solutions, with the help of the latest tools, make this entire process smooth.
- Updating Records takes less time
A P2P process is incomplete without updating all records at the end. It includes keeping records of invoices, information from the audit, purchase orders, etc. Detailed & accurate bookkeeping is crucial to avoid stock discrepancies. Thus, one of the best advantages of P2P solutions software is the automatic updating of records.
- Increase Efficiency of the In-house Team of a Company
Without digital solutions, the P2P process becomes hard. Not to forget, the entire process needs numerous workers because of the large number of areas of the P2P process. With software solutions, work becomes faster & accurate by maintaining quality standards. With automated software, a company will also require fewer people, saving labor and inventory costs.
- Makes Analytics Easy
The best thing about automatic P2P systems is inventory management and generating order reports. This system analyzes all data, costs and saves on needless expenses.
- It leaves no Room for Human error
More human control means the possibility of errors. Automated P2P software solutions limit manual input reducing the chance of mistakes. It helps to keep accurate inventory data in all stages of the P2P cycle.
- Lessen the risk of confusion & delay of work
Manual working often causes confusion between internal and external operations. Digital P2P software solutions generate automatic reports, reducing the risk for any differences within the supply chain.
- Help Build a Strong Strategy.
By ensuring a transparent procure-to-pay process, industries can establish goals, align their priorities, & increase their scalability.
Is there any Downside to it?
No solution is 100% perfect, especially software, if you don’t use it correctly. Thankfully, the benefits of electronic P2P solutions outweigh the cons, but it is still vital to know the negatives before depending on the process to transform your business.
- Over-Managing at times
As the P2P solutions put too much control into your hands, people start to micromanage everything. Sometimes too much micromanagement is needless.
- Lose contact with non-digital suppliers
Every supplier you have may not take the hi-tech leap like you. Therefore, sometimes a digital procuring system can disrupt your supplier relationships.
- Approval slow-down
When micromanaging increases, sometimes it slows down the review process. However, it is critical to note that using an effective digital P2P solution can be the best decision you ever take for your business. So, try your best to handle the possibility of setbacks and take your business to new heights. Read on to find about the P2P tools that can be a game-changer for your business.
Common P2P problems with the best procurement solutions
- Poor quality goods
In countless scenarios, companies fail to discover the quality risk in time. In such a situation, the best solution would be to review consumer feedback.
- Unclear Purchase requisition
Often suppliers cannot deliver what customer requests in case of unclear POs during P2P. To avoid this, the best P2P solution is to automate the procure-to-pay process. By providing precise details of what your company requires, solving P2P problems is easy.
- Lack of supplier assessment
Without inspection of suppliers before doing business, the chances of unreliable experiences increases. To curb this P2P problem, conducting supplier evaluation is crucial.
- Failure to understand supplier abilities
Too much trust in a supplier without realizing their capabilities is a huge problem. It can lead to unstable & poor deliveries. Therefore, P2P experts must monitor suppliers to ensure all delivery standards are okay. Fortunately, P2P software can do it easily for companies.
- No clearness in the P2P process
Keeping valuable data like sales forecasts, market trends, product changes, etc., hamper the relationship with the suppliers. Keeping open demands and updates of new requirements can help build trust in suppliers.
- Time management issues
The time factor is vital for P2Ps. Missed deadlines can impact overall consumer satisfaction. Therefore, pick a supplier whose time management skills meet your company’s demand.
- Failure to access risks
Risk assessment during the procure-to-pay process is vital. Not doing this can lead to pointless procurement issues. The best solution for this is to implement strategic measures to handle undue risks.
- Lack of Trust
Not having faith in suppliers can lead to a variety of P2P problems. Showing confidence in them can help you resolve issues with them.
- Business without a formal contract
Legal contracts may be time-consuming but not investing time in them is a big problem. Therefore, invest time in official agreements. A digital software solution can fasten this process if you want.
- Accidental order placement
Many companies face the issue of ordering wrong items or quantities. You can readily rectify these order errors with P2P software. Once everything is automatic, you won’t have to worry about human errors.
Now, a procure-to-pay process depends on people, process, and paperwork. Therefore, people in your company must know how to boost project profitability. Without proper skills, they won’t be able to do it. So the trick is to employ a team with knowledge of:
- Supplier Performance Evaluation
- Traffic and Logistics Support
- Shop and Office Expediting
- Facilities P2P
- Material Planning
- Supplier Capacity Assessments
You won’t have to worry about this if you put your trust in an automatic P2P process. Here is why.
Significant Electronic Procurement Solutions Tools
Getting the full advantage of the latest P2P solutions is incomplete without the best tools. Check out how the promising P2P tools help companies.
The E-sourcing tool supports and assists in pre-qualifying suppliers. It discovers suppliers apt for the selection phase. For a company, this tool helps in the sourcing of suppliers. Besides, it helps in the marketing process of suppliers, as well.
- E-ordering and web-based ERP
E-ordering and web-based ERP are the best internet-based tool for order placement, requisition approval, & receiving ordered goods and services.
Gathering information about goods and suppliers is a crucial part of the P2P process. E-informing tool is an internet-based technology that helps in acquiring data. This tool distributes info among internal and external parties.
Now that you know about P2P solutions, it is time to check out their importance in various sectors.
Value of Procurement Solutions in Various Sectors
Disruptions in the supply chain can cause 62% of financial loss. Therefore, procurement solutions are ideal for business & financial companies. However, you will be surprised to know how P2P software solutions are critical among multiple industries.
Take a look!
- End-to-End P2P solutions for senior citizens
Value-based payment models and integrated care delivery is crucial for the senior living industry. P2P solutions help to lessen costs, enhance patient care, & improve financial performance. It helps automates P2P process, order, & payments of;
- Foodservice Equipment, Products & Supplies
- Medical food supplements
- Washing chemicals & related products
- Housekeeping Products
- Medical Nutrition/Enteral Products
- Enteral nutrition
- Medical Supplies
- Incontinence products and more
- Benefits of digital P2P software in health care & hospitality
P2P solutions make it easier for healthcare providers to stick to healthcare rules and regulations. A P2P software solution system keeps all info regarding any vendor organized.
The P2P portal allows nurses, clinicians, and pharmacists to manage and track orders by themselves. The system prohibits them from violating P2P rules and regulations of the establishment. All order-relevant information is stored in one place and checking the entire order history from the very outset becomes easy. Further, there are also other benefits such as,
- Doctors and nurses receive direct access to suppliers. They can discuss their concerns with them to resolve issues timely.
- P2P solutions help to find purchasing opportunities fast. Thus, it helps the doctors to be well-equipped while facing medical challenges.
- P2P software solutions stop the supply of lower-quality medicines. With traceable P2P-related processes, it reduces the chances for background manipulations too.
- Education sectors are looking for P2P solutions too!
To get value for money, educational institutions too need suitable P2P solutions. This is because P2P solutions;
- Provides ease of ordering from preferred vendors
- Lessens transaction costs
- Enhance the productivity of department personnel
- Allows universities to focus on their core duties
- Enhances access to information
- Are apt for management control
Now that you know why multiple industries need P2P solutions, you must know how to pick the best one for your company. Fortunately, there are various P2P software solutions in the market. However, you must select the one that fits your business needs. Below are some of the top procurement software to choose from.