When it comes to your procurement process, do you know what’s happening at every step? Or are there aspects of the process that remain a mystery?
For years businesses have been promised 100% spend visibility when it comes to procurement. And yet, according to data from The Hackett Group, 80% of procurement professionals still don’t have what they need when it comes to visibility.
With so many companies in the space offering visibility, why aren’t more organisations successful?
Part of the reason is due to the fact that many procurement software services are missing components that should be table stakes. Some of these missing features might not seem like a big deal at first glance, but over time the fact that they’re missing can be devastating. After all, without 100% visibility, your team won’t know if they can’t fully trust data or reports around procurement. And trust is precisely what you need to have an effective procurement process — one that reduces maverick spend (i.e., purchases that don’t follow procurement protocols) to nearly nothing. In short, when it comes to procurement, visibility is essential to employee trust, data accuracy, and the bottom line.
So here’s what to watch out for when looking for procurement software.
Certain vendors can’t import paper invoices that are scanned into their system. As a procurement professional, this means you can only process electronic invoices and would need another invoice automation solution to handle the rest of your invoices that you still receive on paper or via other methods. And since handling paper invoices is a manual process of keying in information from an invoice and attaching an image, it’s not only time consuming but can lead to human error. Such situations are better handled digitally by automating the process.
Speaking of reducing time-consuming and costly tasks, another thing to watch out for is manual accounts payable processes. This is especially important when it comes to team methods. That is, if multiple people need to approve a document but only need to approve specific line items, each approver doesn’t need the entire document. The software should automatically show them what they need and no more. It’s also crucial to offer automation for non-PO invoices and recurring invoices, so that these processes can be streamlined.
Another thing to watch for is PO matching that’s limited to basic criteria such as quantities and amounts, which doesn’t give procurement professionals the flexibility they need to do their job well. More importantly, without accurate data from PDF and paper invoices, matching capabilities will be crippled, so it’s crucial to ensure that all aspects of the underlying data are as clean as possible in addition to looking for matching capabilities.
Anyone who’s been in the procurement world long enough knows that not every company has the same needs — especially when you look from industry to industry. As a result, when reporting and analytics dashboards are not configurable, it can hinder teams from getting the level of visibility that’s useful for their particular business. On this same front, not having the ability to do custom reports can be costly — especially when users have to manually export results every single time they want to see the results.
When you’re dealing with a range of suppliers, the last thing you want is to demand that every single one of them join your network even when they’re already sending e-invoices. This not only adds a burden to a relationship you hope to nurture, but it puts you at a disadvantage when trying to negotiate a better pricing, since the supplier essentially has to eat the cost of setting up a connection with your exact network. This can hinder deals, especially if this request is part of the process early on when the relationship is most vulnerable.
In the end, there are many other features we might highlight here, but you get the idea. The point is that everyone who works in procurement knows that the process should consist of 100% visibility. And yet it doesn’t always happen, largely due to software options that are missing key components. This problem is compounded by a lack of procurement influence — meaning that those with the know-how on this topic don’t have the power to institute the processes that need to be instituted. By walking into the procurement software review process with a full understanding of potential pitfalls, you can be sure you get an option that gives you the visibility you need.
Automating your accounts payable process reduces operating costs and gives you the opportunity to capture early payment discounts. Feel free to contact us to learn more. And learn how data affects every part of the source-to-pay process in our whitepaper.