17 May, 2022

Improving the Procurement Process

For businesses, purchasing goods and services from various vendors is routine, yet effectively managing expenses remains crucial, especially in asset-intensive sectors like manufacturing, wholesaling, and retailing. 

The procurement process can be time-consuming, with requests from internal clients requiring thorough analysis and approval. When seeking new items, multiple vendors must be approached for quotes, leading to negotiation rounds before finalizing the purchase

Organizations often lack efficient procurement management tools, relying on manual methods like record-keeping, phone calls, emails, and spreadsheets. This not only proves inefficient but also complicates vendor performance assessment.

Source, buy, and pay

Successful procurement training hinges on the stability of people, methods, and innovation. While software can address some issues, it may fall short if underlying mechanisms clash or are poorly defined, or if procurement teams lack a deep understanding of the company's needs. 

A crucial step in refining the procurement process is documenting the essential requirements that all suppliers must meet. Without clear guidelines, procurement managers may rely on their own standards, which might not align with business objectives. These guidelines are typically tailored to each company, covering factors such as manufacturing capabilities, country of origin of goods, company size, and ethical standards. Establishing this framework facilitates the evaluation of suppliers and products by managers and other buyers. 

Next, automating aspects of the procurement process is essential. Procurement software streamlines numerous manual tasks, including purchase requisitions, vendor management, and invoicing. It simplifies the monitoring of buyer-vendor communications and ensures compliance by mandating purchases only through contracted vendors. Additionally, it sets spending and purchase type limits based on the user's role. spending and purchase type limits based on the user's role.

Procure-to-Pay Process Improvement

Best practice procurement involves finding the optimal suppliers offering the right goods, delivered punctually, and at competitive prices. NetSuite ERP Procurement elevates the efficiency of the procure-to-pay process by automating and integrating crucial procurement transactions. It provides approval and matching workflows to strengthen internal controls and ensure compliance. 

Employees benefit from time savings by directing purchases to approved vendors and leveraging pre-negotiated agreements. Additionally, visibility is heightened, as businesses gain access to real-time data on spending and vendor performance.

Connect Jobin & Jismi to know more about the NetSuite-related procurement process and NetSuite Cloud ERP