Maverick spending and manual approvals are among the procurement process challenges that could negatively impact your business. Find out how to fix them.
A lack of visibility and outdated practices in your procurement processes can hold your business back. Apart from creating disruptions in your operations, they can affect your budget, with the result that your business doesn’t grow as expected, suffers from poor inventory management and reputational damage, and is impacted negatively by decisions made using inaccurate data.
However, with the right tools, you can prevent these issues from arising.
Maverick Spending
Unauthorised or maverick spending is usually a result of departments or employees making decisions that go beyond procurement. Difficult to track and control, this spending can be disastrous for your budget forecasts.
To prevent maverick spending, you need to create standardised procurement processes that include stringent approval systems and purchasing guidelines. However, this is only the first step. FMIS’ purchase to pay solutions offer improved visibility and control over expenditure. The software offers customisable purchasing forms, access to buying history, and full history reviews of goods receipt, change, and invoice matching. It also allows for purchase workflow routing along specific product or department types.
With greater control over procurement spending, you can ensure that unauthorised spending is minimised and your budget stays on track.
Manual Processes
Relying on manual processes is another procurement pain point that can negatively impact your business. Whether these include requisition approvals, managing vendors, or creating purchase orders, they come with the risk of human error, and they take more time than necessary. The results are frustrating delays, under- or over-stocking, lost productivity and revenue, and wasted money.
With FMIS’ purchase to pay solution, you can automate the manual processes in your business’ procurement system for faster approvals and to eradicate errors and free up staff to focus on other tasks. The software allows you to create blanket orders, change orders, authorise procurement orders electronically, and automate purchase order allocations to preferred vendors at agreed discounts and pricing.
Inaccurate Data
Using outdated systems and relying on manual data collection and analysis in your procurement processes puts you at risk of making decisions based on inaccurate data. Without accurate data, you will struggle to identify and negotiate with the best suppliers and to perform spend analyses that can pinpoint opportunities to improve your budgeting and save on costs. Inaccurate data can also affect your ability to identify supply chain risks and monitor compliance.
FMIS’ procurement software can change the way you collect and analyse data. This software enables you to automate data collection, ensuring that it’s accurate, up to date, and stored on a platform that’s accessible and offers automated reporting. The insights the software provides make it possible to identify trends, highlight opportunities where you can save money, and make informed procurement decisions.
Poor Inventory Control
Effective procurement processes and good inventory control go hand in hand. If your procurement processes are inefficient, you will likely struggle with controlling inventory effectively. This could result in being under- or over-stocked and being faced with higher carrying costs.
However, by analysing your business’ inventory performance regularly, you can create and adjust inventory replenishment policies for greater control. FMIS’ purchase to pay solutions can help you do this. The software enables direct pegging of finished items or stock on hand, triggers alerts for shortages, and generates production work orders or kit builds for non-stocked goods.
Lack of Visibility
A lack of visibility in procurement processes can lead to several significant problems. One of these is the inability to manage spending efficiently. In addition to not taking advantage of supplier discounts, you could also miss out on chances to purchase stock in bulk.
Supply chain disruptions are another potential consequence of a lack of visibility, and these can negatively affect production schedules as well as delivery, resulting in frustrated customers, loss of revenue, and reputational damage. Procurement invisibility also makes it more difficult to achieve the oversight required for risk management, especially in terms of compliance with contractual obligations and regulatory requirements.
Purchase to pay solutions from FMIS offer full visibility of your procurement process. With this powerful software, physical audits of assets and inventory are fast and efficient, and your asset register is updated in real time, enabling you to minimise write-offs and avoid duplicate or unnecessary orders.
You can track asset locations and movements across different companies and sites, access a full invoice registry, and create, clone, modify, and link base reports to workflows. This allows you to make informed decisions based on data such as inventory levels, supplier performance, and spending patterns.
Overcome Procurement Process Challenges
Procurement challenges such as maverick spending, manual errors, poor inventory control, and a lack of visibility are something no business needs. Overcome them with comprehensive purchase to pay solutions from FMIS.
Gain the control, automation, and insights you need to streamline procurement, reduce costs, and make informed decisions so that your business grows sustainably.