Procurement is a process of procurement buying goods needed by the company for operational needs. Along with the development of technology, procurement or the process of procuring goods can be done online or often referred to as e-procurement.
The existence of e-procurement is considered very helpful for companies, especially in reducing costs such as the use of paper. Not only that, the existence of e-procurement can also avoid the problem of fraud or fraud in the procurement process.
When your business is growing and getting bigger, make sure your company’s procurement process keeps up with the increasing demand for customer orders. In addition, make sure the A/M process in your company runs smoothly, because both are an interconnected entity in the procurement process. Below we detail five key issues A/P teams face with their manual processes and how e-procurement tools can help fix gaps in your business strategy.
In the A/M process, an exception occurs whenever there is a communication error between your company and a supplier. When misinformation is discovered it will certainly slow down your entire process as all parties involved must identify and remedy the situation. This results in longer invoice processing times and slows down the procurement process.
That’s where e-procurement comes in as a solution for your company. By moving your invoicing and procurement processes to a digital format, you can reduce the possibility of human error or what is often called human error when entering information. With the help of a digital processing platform, your accounts payable team can establish digital connections with suppliers, as well as create a fast procurement process.
Lack of data transparency on procurement
Lack of access to supplier data and information is often the cause of invoice errors. Dealing with delays in receiving (or providing) important information will disrupt communication which in turn will create barriers to identifying and solving the problem.
When organizations make decisions based on inaccurate information and data, the company opens the door to risks including inventory shortages, overstocks and procurement challenges that impact your bottom line. However, by embracing digital e-procurement platforms. The integrated e-procurement system will centralize your communication and functions so that it will create the right data management strategy.
Invoice approval and payment takes a long time
Traditional invoicing and payment approval processes are prone to delays. When companies choose to use manual processes such as paper invoices, it takes longer to review information and process invoices.
If this happens, the payment process will take a long time, while without payment, the procurement of goods will be delayed and hinder the delivery of goods to your hands.
However, with an e-procurement platform, you can speed up the process to get paid faster. With digital or electronic access, buyers and sellers will have instant access to available products, services and prices and can centralize tracking their transactions. This leads to a more secure process, and faster invoice approval and processing times.
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The risk of paper document
With hundreds of paper invoices being processed at any given time and piles of paperwork your A/P team has to sift through it can be time-consuming. This will certainly affect your A/P process.
It’s different if you embrace digitization, the need for physical paper invoices is a thing of the past. With a digital platform for e-procurement, buyers and suppliers can quickly interact, share information, and track the current invoice status, all in one location. This will help the company or organization in processing transactions faster and simpler.
Manual process cost high budget
The goal of your A/P department is to make operations functional. Often, it is difficult for organizations to achieve efficiencies using manual processes. When they commit to switching to an electronic system, they can reduce the need for manual input. In addition, they can also speed up the process and create more secure transactions.
By automating purchase requisitions and invoices, digital e-procurement tools can reduce tedious work. Not only that, it also gives your employees more time to act strategically in their roles. As more organizations embrace digitization and rely on e-procurement platforms, the time and costs associated with processing invoices will decrease. Buyers and suppliers will find themselves with more resilient and profitable business relationships.