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Best Practices & Software to Optimize the Procurement Process

  • By ProcureDesk
  • April 16,2024
  • 10 min read

Best Practices & Software to Optimize the Procurement Process

Best Practices & Software to Optimize the Procurement Process

There are various ways to optimize your procurement processes, so knowing where to start comes down to considering your current processes and the problems you want to solve. 

Many of the procurement teams we talk to still rely on manual methods — for example, they use survey tools to gather purchase requests, communicate with vendors over email, and track orders and spending in spreadsheets. 

While manual procurement processes may work for teams that only make a handful of purchases each month, they become inefficient as you scale. Often, manual procurement methods lead to bottlenecks and inefficiencies, for example:

  • It’s difficult to share company purchasing rules and guidelines (and keep everyone adhering to them). Staff might not know who they can shop with, what’s approved to purchase, how much they’re allowed to spend, or even how to go about placing order requests. 
  • The order approval process can be slow and tedious. Procurement managers have to review every purchase request and send orders to vendors. If purchases don’t meet guidelines or exceed budgets, managers must communicate with employees to course-correct orders or schedule them for later months when the budget opens again.  
  • Spreadsheets become difficult to manage when you have multiple procurement team members updating them and a high volume of orders to keep up with; so teams have challenges monitoring real-time spending — which can lead to overspending.  

Procurement management systems are the natural upgrade for teams when they start to experience these challenges because they allow you to: create an organized, controlled purchasing workflow, streamline (and even automate) order approvals, and access real-time order monitoring to see all spending as it happens. 

Not only can you avoid problems like overspending, but you can also gain better visibility into purchasing patterns, strategically source partners, and pinpoint ways to reduce costs.  

In our post, we discuss how you can use effective procurement management systems — like our solution, ProcureDesk — to solve these challenges and optimize your procurement process.

To learn more about ProcureDesk, you can schedule a free demo with our team.

Onboard & Manage Vendors in a Central Dashboard

As mentioned above, a key problem managers face is sharing purchasing guidelines and creating controls for this process. If employees don’t know who to shop with or what types of orders they’re allowed to place, managers can receive all kinds of purchase requests that don’t adhere to policies (and this creates a confusing, even frustrating, experience for employees who constantly have orders denied). 

One way to avoid this is by creating a central purchasing hub where employees can: 

  • Access all approved vendors 
  • See what items they can order
  • See available budgets

ProcureDesk and other procurement systems support this by allowing you to add approved vendors to the platform, creating a “catalog” of vendors for employees to shop with. You can add an unlimited number of vendors to our platform (we have over 150 vendor integrations, including punchout catalogs with popular sites like Amazon).  

Supplier Catalogs

Then, shopping with vendors is convenient: vendor sites open directly on our platform so employees can shop, build carts, and send the carts for review. 

Punchout Catalog

Managers can also create purchase request forms with all the questions and fields to complete with orders — we provide over 20 templates to get you started. These forms tell employees exactly what information procurement managers need to review and approve orders. 

They also help filter orders; if employees find they can’t appropriately bucket an order or don’t have all the required information to complete the form, they can’t submit it.   

Streamline PR Reviews with Pre-Set Budgets & Order Approval Workflows

Step one establishes a controlled purchasing process for employees, but managers can also create budgets and automated approval rules for extra controls — and to save time on reviews.

As mentioned above, one of the main challenges for procurement teams is overspending. This often stems from the fact that teams rely on spreadsheets to set budgets and track and control spending. 

If procurement team managers stay on top of spreadsheets, they can be a useful tool; however, maintaining spreadsheets requires a lot of time, as you have to update the sheet every time a new order is placed. With manual processes, reviewing each PR form carefully is the only way to prevent unauthorized purchases or overspending. 

If you work on a team with a heavy procurement load each month, you know how long this can take. We often hear from procurement managers who feel they are buried under stacks of PR forms. 

A software solution like ProcureDesk offers the best fix because it can automate certain parts of this process. These systems let you add budgets, purchasing rules, and approval trees so it can check and approve purchases for you, or route PRs to the right member of your team for review.

Purchase Approvals

ProcureDesk will: 

  • Automatically deny orders that go over budget and notify team members about why the order was denied. 
  • Automatically approve orders that adhere to policies and budgets so procurement managers don’t have to spend time reviewing those. 
  • Route orders to the right person(s) and send notifications when orders are ready for review. 
Invoices pending approval

Note: Procurement team leads can review orders within the ProcureDesk dashboard or through our app, email, or Slack, making the process simple and easy (even while on the go). 

Then, after orders are approved, procurement systems can automatically convert PRs to purchase orders and send POs to vendors, so managers don’t have to spend time on this last step. 

This saves hours every week, and managers can still feel peace of mind that users can’t purchase unapproved items or continue spending after budgets have been met. 

Read more: How to Control Employee Expenses Across Your Organization

Provide Visibility into Order Status to Avoid Back & Forth Emails 

After orders are placed, procurement managers are tasked with: 

  • Communicating with vendors on order status. 
  • Updating employees on orders (after they’re approved and as vendors acknowledge or ship them). 
  • Receiving updates from employees after orders arrive (i.e., if the order was right, or if there were any issues with items). 

Without a procurement management system, this is all done over email; it can be hard to keep track of and reference email threads, and this method requires a lot of back-and-forth. 

ProcureDesk addresses this with automated order tracking and a central dashboard for managers, vendors, and purchasers to communicate and check on orders. 

Supplier portal: Supplier quotes

Vendors can acknowledge POs as they’re sent so managers can see that vendors are working on orders (they can also deny orders and explain why they can’t take the request). Vendors can also mark when orders are fulfilled and shipped so managers can add tracking numbers to the system.

Then managers and employees alike can see the status of orders without emailing around for updates.  

After employees receive orders, they can upload a photo of the receipt and log notes about the order condition, confirming they received the right items and quantities. (If they forget to add this information, our system will send an email reminder to do so.)

Create Receipt

Our system automatically flags orders with discrepancies so managers know where to focus their attention and how to resolve issues with vendors. However, all receipts and purchase information are readily available for procurement managers to check on orders. 

Note: Receipt management is also key to powering our three-way matching feature and automating invoice approval workflows

Analyze Spend Data to Identify Cost Savings Opportunities & Establish Supplier Relationships 

Now, as we said earlier — choosing the right strategies to optimize your procurement process will depend on your current situation. Beyond the basics of creating a controlled purchasing flow, you can also improve procurement processes by analyzing spending and creating procurement contracts with suppliers.

We’ve already explained some of the headaches associated with tracking and managing spending in spreadsheets, and you can probably already imagine how this method doesn’t lend the most convenience to analyzing spend data. Teams typically need another reporting tool to pull spreadsheet data and highlight spending patterns. 

Given this challenge, some teams avoid analyzing spend data, but failing to do so can lead to spending money you don’t have, and then you’re left dipping into credit lines or sending late payments. 

That’s why good procurement solutions contain native reporting to track spending in different ways. 

ProcureDesk’s spend analytics dashboard shows metrics like spend by day, supplier, category, department, or individual. You can also dig into orders and see what items teams purchase most frequently. 

Spend Dashboard

Then, you can use these learnings to guide your procurement strategy and make more informed decisions. For example, you can: 

  • Understand what each department typically spends so you can identify areas to cut costs and budget appropriately. (This can also help you forecast future spending.) 
  • Reach out to suppliers you frequently purchase from to negotiate contracts.
  • Evaluate supplier performance and renegotiate existing contracts for better rates or payment terms. 

Analyzing spend data should be a regular, routine practice so you can continually pinpoint new ways to save and areas to improve supplier relationships. After working with suppliers for a while, they typically offer extra perks, like longer payment terms (60 or 90 days vs. 45 days). You can also nab discounts for sending early payments or regularly making payments on time. 

Course-correcting problem spending and establishing contracts to source the items your business needs is the only way to grow your bottom line effectively. 

Bring Employees on Board So Everyone Knows How to Follow Procurement Plans 

The last step might seem obvious, but the onboarding piece can be the difference between success or failure to launch. 

After you invest in procurement software and go through the setup, you want employees to actually use the system. You need to share access, explain the software’s purpose and how it works, and train others to use it. 

You should also consider the user experience when comparing software. You don’t want something that’ll be difficult to learn, feel outdated, or be clunky to use.  

After employees are introduced to the platform, they know exactly who they can shop with and the process flow. They can see available budgets, see the orders others submit so they don’t make duplicate purchases, track order status, and share receipt details. These systems then automate the approval process to simplify managers’ tasks. Everything is managed, controlled, and trackable in a central hub. 

We offer a complimentary white glove set-up to help procurement teams hit the ground running. We’ll help you add vendors, customize PR forms, set budgets, and create approval trees. We’ll also show you how to adjust the software as you go so you can add new vendors or users as your business scales. (We work with small and growing teams and can create custom packages for enterprise organizations.) 

Then onboarding users is seamless: you can share access for users to create personal logins. Most users can learn the software without any formal training because the vendor catalog displays for users, the shopping experience is familiar, and PR forms tell users exactly what to share with orders. 

Plus, our team is always available to help when you have questions or want to make adjustments. 

After set-up and onboarding, procurement teams and purchasers can work in harmony. Employees can order the supplies they need when they need it, and procurement teams only need to approve the major purchases. Procurement teams can add or remove vendors, change budgets, or update approval flows, and employees can still shop all the same.

Getting Started

Manual methods can only get you so far — even if you have an efficient method for reviewing requests or hacks for managing spreadsheets, this approach is still more clunky and time-consuming than using dedicated procurement software. (And becomes virtually impossible to stick with when you have hundreds of orders every month.)

Procurement software is designed for procurement optimization. It gives you all the tools to manage procurement and streamline the purchasing process without being as hands-on. Upgrading to procurement software like ProcureDesk is the best approach to truly resolve the challenges we discussed throughout and improve procurement operations. 

Our procurement management system is available for $380 per month and includes ten user seats. To recap, this includes:

  • Tools to manage vendors and create a clear “catalog” for employees to shop.
  • The ability to set procurement budgets (by vendor, department, individual, or spend category) and create approval trees to streamline reviews.
  • Tools to track order status and comment with vendors within the dashboard.
  • Features to track real-time spending and analyze spending data.

ProcureDesk helps you save a ton of time managing the procurement process while greatly improving cost control, easily offsetting the cost of adopting the software.

Note: ProcureDesk is a full procure-to-pay software solution, meaning our software supports both procurement processes and accounts payable workflows. ProcureDesk includes features to manage invoices, automate invoice processing, and simplify the payment process.

Schedule a free demo with our team to learn more about how ProcureDesk can help you control costs and streamline procurement processes.
Read more:
  • Best Online Procurement Management System: Reviews
  • Best Coupa Procurement Alternatives (Options for All Biz Sizes)
  • Best Procurement Express Alternatives: Buyer’s Guide
  • What you should do now

    Whenever you’re ready… here are 4 ways we can help you scale your purchasing and Accounts payable process.

    1. Claim your Free Strategy Session. If you’d like to work with us to implement a process to control spending, and spend less time matching invoices, claim your Free Strategy Session. One of our process experts will understand your current purchasing situation and then suggest practical strategies to reduce the purchase order approval cycle.
    2. If you’d like to know the maturity of your purchasing process, download our purchasing process grader and identify exactly what you should be working on next to improve your purchasing and AP process.
    3. If you’d like to enhance your knowledge about the purchasing process, check out our blog or Resources section.
    4. If you know another professional who’d enjoy reading this page, share it with them via email, Linkedin, Twitter.