Purchasing process automation: how to set up purchasing department processes more efficiently?

An efficient procurement process is worth a lot. You maintain an overview, speed up transactions, reduce manual operations and minimize errors. In addition, you lay a foundation for cost savings and strategic decision-making. Especially if the procurement department and the financial administration align their processes. But anyone who wants to work more efficiently in 2023 cannot really do so without embracing the possibilities of technology. Automating the procurement process is the solution for organizations that want to realize an efficiency boost. The question is: where and how do you start?

What does the entire procurement process look like?

First, let’s look at what the entire procurement process – also called the purchase-to-pay process – looks like. Purchasing starts with an inventory: you determine what products or services your organization needs. A careful analysis helps you determine your purchasing needs. You have to define these specifically. In your specification, you include your organization’s requirements and how you can meet them. In other words, you describe where you can obtain the goods or services you need. Then you order the products or services your organization currently needs, and the supplier gets to work preparing and delivering your order. At this stage, it is crucial to monitor the contract closely. Is the supplier keeping the agreements made? You need to monitor this on several levels: from delivery to payment. For example, you want to check whether the order arrives on time and in its completeness. And of course you have to process all this quickly and correctly in your ERP system. Only then can you correct any errors in time and discuss points of improvement with the supplier (e.g. for next time).

Automating purchasing: align your process with that of financial administration!

As shown in the process described above, alignment between the purchasing and finance departments is essential to an efficient, successful purchasing process. When these two teams join forces, things run more smoothly and you have a solid foundation for healthy operations. As we wrote in the introduction, “automation” is a key word when you want to operate more efficiently. But why exactly is that? We’ll explain it to you by discussing the two processes you can best start your ‘automation journey’ with!

1. Processing purchase invoices

Purchase invoice processing is a process that involves both the purchasing department and financial administration. Traditionally, this is error-prone and time-consuming: the more manual operations you have to perform, the lower the efficiency. If you process invoices (partially) manually, you often encounter a lot of problems. Think of over-typing errors, delayed approval, lost invoices and delayed payments. You can tackle these stumbling blocks in your process with a smart total solution. This eliminates the need for manual typing when processing invoices in your ERP system. If you also use automated workflows (by implementing workflow software), the process becomes even easier and faster. You save time, increase transparency, reduce the risk of errors and have a clear financial overview. This allows both departments involved to streamline things much better.

2. Match purchase order confirmations to invoices.

If you move the processing of purchase order confirmations to the beginning of the process, you can spot any discrepancies early. These could include unexpected extra charges or price differences – and these sometimes involve additional tasks. If the finance department notices these almost immediately after the order is completed, you can finish them quickly. How do you gain this quick insight? By optimizing the processing of order confirmations. And you do that, too, by automating the process.

Optimizing procurement: what are the benefits of automating procurement processes?

Work more efficiently

When you spend less time on manual repetitive work, you have more room for challenging tasks. That will make you happier. And you add more value to the organization that way.

Optimize the decision-making process around corporate spending

When the purchasing department and the finance department both have insight and oversight, they can optimize the decision-making process around corporate spending.

Reduce errors

Human (over-typing) error lurks in a small corner, especially when you spend hours doing manual work. Use a smart total solution that recognizes invoice data at lightning speed, and you’ll cross this repetitive task off your to-do list. And with an invoice-matching platform, it’s much easier to detect and eliminate errors. In fact, the right software will automatically signal when the purchase order and invoice do not match.

Save costs

When you minimize human error in financial transactions, it provides another benefit: You avoid many additional costs. Consider, for example, penalties for late payments.

Automate the procurement process to minimize manual operations?

With a reliable total solution, you can optimize important processes and set up paperless administration. A good software supplier also offers additional functionalities, such as a matching module that allows you to process order confirmations automatically.

Optimize procurement process?

Benefits

Make fewer mistakes
Cost savings
Better decision-making

Want to make your process smarter?

We’d love to think with you. Schedule a no-obligation demo with us or contact us for further questions!

Back to overview

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