Posted in Financial Process Automation

Top 4 Procurement Processes Every Business MUST Automate

Procurement. It’s one of the most core activities any business performs. Obviously, you must procure the raw materials and services you need to build your products. Otherwise, you can’t be a successful business.

Yet, procurement is persistently one of the most disorganized activities within most organizations. Often, that’s because procurement’s top priorities have not evolved to be in tune with the demands of a modern business.

It’s hard to blame the procurement department. After all, in many organizations they’re still stuck using Excel spreadsheets and email for routine processes. Without automation, employees are still spending a lot of time on paperwork. They don’t have the time to think bigger. About Corporate Social Responsibility or reducing everyday risks to the business.

Whether you’re a small or large business, process automation helps increase agility and sets your business up for success in the 21st century.

What Is the Procurement Process?

In brief, procurement is an overarching term for all the “things” a business does to obtain the “stuff” that it needs. It involves multiple processes, policies, guidelines, and tasks.

Obviously, the exact process varies from one business to another. Nevertheless, it’s a key business activity and an optimized process has many benefits. We’ve discussed the procurement process in detail elsewhere – read the article below to learn more.

What Is Procurement Process Automation?

Procurement automation optimizes and speeds up everyday workflows in the department. It’s essentially workflow automation applied to the processes in the procurement department – often collectively referred to as procure-to-pay (or P2P).

An electronic workflow management system confers numerous benefits since people spend less time on paperwork and more time on the things that matter. They have to deal with fewer errors and omissions. The business receives the goods and services it needs faster.

Automation has so many advantages that it’s no wonder that the procure-to-pay process is increasingly going digital.

Top 4 Procurement Processes Every Business MUST Automate

1. Purchase Order Processing

Every company deals with purchase orders. In our experience, it’s the single most common workflow that customers automate. That’s because it’s a perfect example of a routine, everyday process ripe for automation.

  • Most organizations perform purchase order approval reasonably frequently.
  • By and large, it’s not a hugely complex workflow.
  • At the same time, it involves multiple stakeholders.

Automating this process has numerous benefits. Faster, more accurate PO approval means faster, more accurate procurement. That means projects delivered on time and on budget. It means product releases that meet their deadlines.

2. Purchase Requisitions

A purchase requisition is simply an internal workflow. Employees use it to request approval for a purchase. Usually, that means their direct manager. However, the process often requires additional approvals. For example, businesses commonly require VP approval if the $ value of a purchase request exceeds a preset amount.

An approved purchase requisition ends up with the Finance department. They use the information in this document to generate and issue an official purchase order.

As with POs, an automated process has similar benefits. It frees up employee time for more important pursuits. It ensures that projects aren’t delayed because required materials are unavailable in a timely manner.

Note that purchase requisitions are related to purchase orders but the two are different and shouldn’t be confused.

3. Invoice Approvals

Invoice processing is another common business activity. It comes later in the overall procurement process. The business issues a PO, and the vendor ships the ordered items. At that point, the vendor sends out an invoice.

Invoices typically go through an internal approval before Finance sends any money. The approval process varies by company but goes something like this:

  • Finance verifies the invoice against an approved purchase requisition or issued PO.
  • They notify the employee who placed the order. The employee checks to ensure that the order was properly fulfilled and signs off on the invoice.
  • Depending on internal business norms, the invoice may require one or more additional approvals.
  • Finance receives the final approved invoice and pays it.

4. Record Keeping

Ok, this isn’t technically a process. However, every business has to keep proper records. If there’s a dispute or an audit, it needs to produce documented purchase orders and invoices. Additionally, businesses often analyze purchases to optimize their spend management.

In spite of this, an incredible number of organizations still process documents manually. In some cases they still print out POs or invoices and save them in filing cabinets. More frequently, they file away an Excel sheet in a folder or in an email inbox.

Neither is a particularly good solution. Paper or inbox documents are notoriously difficult to find when needed. They lock up important data in formats that are difficult to analyze.

As a result, many organizations use a document management system (DMS). It would be a travesty to automate everyday procurement processes only to manually save the documents into your DMS. Instead, make sure that your workflow automation software generates and saves electronic documents into the DMS. The system properly index the documents so it’s easy to find a relevant document as required.

How Should You Automate Procurement Processes?

Generally speaking, there are two approaches. You could invest in an e-procurement solution such as SAP Ariba or Zycus. To be sure, systems like these provide rich, powerful functionality. However, they are expensive to procure 🙂 As a general rule, they’re also difficult to customize. In all likelihood, you’ll alter how you do business to fit the way the software is designed.

Alternatively, you could use low-code, workflow automation software like frevvo. It can help you replace your existing paper- or Excel-based process with a fully electronic version.

Modern workflow automation software is very visual, intuitive and easy to use. You won’t need experienced programmers, a large budget or a months-long project to automate processes.

Simple visual tools for business process automation

Digitize Procurement Processes in 4 Easy Steps

Here’s how you can automate these everyday processes with our modern, visual software.

1. Install a Pre-Built Template

Get a jump start with one of our pre-created, tested templates for common workflows like purchase order, purchase requisition etc. Alternatively, you can start from scratch and build your own brand new procurement app.

2. Customize Forms, Business Logic, and Routing

In this step, you can edit the template and customize it:

  • Drag and drop to design your own custom forms. Make use of an array of powerful e-forms capabilities such as sophisticated layouts, a rich control palette, e-signatures, attachments .
  • Need dynamic behavior? It’s a piece of cake with our Visual Rule Builder. You can easily perform calculations, create conditional sections, and pre-fill fields without coding.
  • Setup the routing visually with the workflow designer. Define users and roles to route steps to, setup conditional routes and more.
  • Generate PDF forms and documents including custom documents like a Federal W-4 that maps form data to PDF fields.
  • Your forms and workflow will automatically work on all mobile devices.

With frevvo, you have access to a vast array of capabilities that’ll help you design automated processes that meet real-world business needs.

3. Deploy It in frevvo’s Cloud or On-Premise

Now that you’ve created your own electronic purchase order, invoice approval or other procurement workflow, it’s time to publish it. With frevvo, you have flexible options.

Deploy it in our robust, secure cloud environment. You don’t have to worry about upgrades, maintenance, security patches etc. We take care of the details so you can focus on your business needs.

However, we understand that sometimes you may need to work on-premise. Perhaps, the system needs to connect to an internal system that is not available to the cloud. Maybe the process data is so sensitive that I.T. prefers to host it in your data center. No problem! We offer the exact same software in an on-premise version that you can install and manage.

We recommend that you start small with a trial group. People are used to doing things a certain way. It’s hard to get them to change. Collect real user feedback and take the time to incorporate it into the process. Iterate until your users are comfortable with the new electronic process. It might take a while but you’re much more likely to end up with a procurement app that people actually use.

4. Optimize and Improve the Process

Once the workflow is in production use across the organization, make sure you monitor usage, measure efficiency and ROI. You’ll always find opportunities to iterate and improve your process over time. Perhaps, users will tell you things like “I wish we could …”. Certainly, business conditions and requirements will change.

Use frevvo’s built-in reports together with third-party analytics on your newly digital data to optimize.

We Have the Features You Need

To be sure, there are alternatives to frevvo. Workflow management software comes in many shapes and sizes. But, it’s still important to ensure that it has some key capabilities.

From visual tools to PDF generation to security, mobility and accountability, you’ll find that these features are essential. Perhaps, your first process doesn’t make use of SQL integration. Maybe it doesn’t need to work with your document management system.

However, as you start automating more processes so that they use electronic forms and workflows, you’ll find that the list of business requirements grows.

It’s important to do your due diligence and choose the right software. Otherwise, you’ll end up with multiple competing applications for the same business problem.

Get Started Today

It’s easy with frevvo. Sign up for a free 30-day trial, install a template and get your first process in place in less than an hour.

Automate your procurement processes easily.

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