Download
  Contact us

Consolidate Purchasing Power

15 Oct 2016 - Mickey Farrance

Purchasing is a critical business function.

Monitoring and managing purchasing distributed throughout the company can generate better profitability. Use these Best Practices to implement business process management to better manage your purchasing power.

 

1. Stop using paper

According to some studies, the cost of processing a paper invoice is estimated to be around $18 (USD). Going paperless can save up to $13 (USD) per invoice, not to mention the faster transmission time and lower environmental impact. Go to a paperless procurement process to streamline the steps – and make sure that none of your suppliers are waiting for payment of an invoice lying forgotten on someone’s desk.

 

2. Standardize ordering

The lack of control over the items ordered or requests for service is an invitation for creativity.  Create a catalog of standard items, and of authorized services, that can be ordered company‐wide. This gives you better leverage to negotiate effectively for large volumes.  

 

3. Make validation dynamic

To optimize the purchasing chain, limit the number of approvals an order has to go through. Instead of forcing multiple approvals at different levels, clearly define the approval rules and integrate them into the system.  You can be sure that purchases are made with proper authorization. "One person out and nothing moves," might be what your employees think whenever one person with approval authority is absent. But with appropriate management delegation in your BPM process, approval requests are automatically re‐assigned to an authorized alternate.

 

4. Integrate your purchasing process with your other systems

The value of a good BPM suite is its ability to integrate effectively into the entire IT ecosystem of your business. Connect your buying process with your ERP (SAP, Microsoft Dynamics, or OpenERP, for example), accounting system, logistics system, and other IT applications. Eliminate duplicate data entry, minimize errors, and improve control.

 

Read more in the best practices document