Procurement management software is a computer program that automates materials purchasing and maintaining inventory. It essentially does several jobs at once while maintaining accuracy in all. Just a few of its responsibilities include generating purchase orders, implementing the process of ordering, matching invoices to delivered materials, and making payment for the bills electronically.
Traditionally, these processes are done by humans, but with that comes significant human error. Businesses invest in procurement management solutions to be able to automate and streamline the source-to-settle process. At the same time, they’re able to control the costs of materials by directing all approved purchases to suppliers permitted by the company.
Procurement management software can achieve the following benefits:
- Improve source-to-settle procurement processes – Complicated procurement processes stop the procurement department from adding strategic value to the company. Procurement management software can streamline, standardize, and automate the traditionally manual processes in procurement. The use of procurement management software results in easy purchase management, and it frees up resources for use in more strategic activities.
- Better control over spending – Procurement solutions will ensure compliance with purchasing regulations by making it easy for purchasers to find what is needed and direct the purchases to authorized suppliers only. This saves time and money. It will also make auditing purchase orders easier because purchases will be limited to properly approved requisitions.
- Better supplier management – Procurement management software is also able to keep track of your suppliers with more accuracy. It is capable of monitoring your suppliers and will prompt the procurement specialists when the qualifications of a supplier are expiring or changing. If it observes that new information comes out that would affect the supplier’s capabilities, the software will prompt the procurement specialists to make changes to the supplier’s risk profile.
- Standardize the life cycle of contracts – Contract reviews can easily identify any deviation from the standard language, which will highlight risk factors. These reviews also institute corrections and get approvals for finalization. When managed manually, these reviews can get behind schedule, which may impact your profitability. Procurement management software tracks contract review cycles and alerts the users of expiring contracts to avoid delays in renewal.
A good procurement management software program modernizes procurement processes by allowing managers to direct activities throughout the source-to-settle cycle proactively. Its complete and integrated system enables companies to morph their manual procurement organization into an automated system that specializes in fast, compliant procurement services for all areas of the business.