What Is Procurement Software & Why Does My Company Need It?

In the modern business environment, software is a driving force behind every aspect of success. Procurement is no different. Implementing next-generation software to automate the procurement process creates savings and scalability that dramatically enhance an organization’s financial strength. 

Today we’ll discuss the benefits of procurement software and how it helps companies achieve more by answering: 

• What is procurement software? 
• How does procurement software differ from traditional methods?
• What are the benefits of procurement software?
• What should you look for when selecting a procurement software solution?

What is procurement software?

Procurement is the strategic process of securing the products and services needed by a business. Procurement allows companies to source, organize, and purchase products from different vendors to achieve the best financial outcomes. It enables growth through better processes and more accessible data while providing visibility into company spending that safeguards against cost inefficiencies and risk. 

Procurement software solutions help achieve these outcomes while freeing accounting and finance teams from the burden of extensive manual work. It streamlines processes by allowing your company to purchase products, approve orders, and automate vendor payments all in one place. It centralizes your data, creates visibility into spending, and allows organizations to fully optimize their cash for better capital efficiency.

Ebook

Choose the Right Procurement Technology With This Decision Matrix

There are A LOT of procurement softwares out there. Make sure you're choosing the right one for your business.

Download the guide

How does procurement software compare to a traditional system?

In a traditional procurement system, the accounting department manually carries out each purchase-related task, including: 

1. Routing purchase requests
2. Checking for approvals
3. Entering tracking data 
4. Managing vendors
5. Processing invoices
6. Making payments (usually with paper checks) 

What’s more, tracking these manual processes usually occurs on spreadsheets, if at all. This robs the organization of visibility and leverage when negotiating for the supplies it needs to grow. 

A procurement system handles many of these manual tasks automatically by: 

• Centralizing vendor and invoice info
• Using optical character recognition (OCR) for converting paper invoices
• Building automated workflows for approval and order management
• Digitizing purchase requisitions, order processing, and payment for goods 

Why does my finance team need procurement software?

No matter what industry you’re in, having a single source of truth for procurement is critical for a sustainable and scalable business. Research by NetSuite shows that procurement software can automate almost 75% of accounting tasks.

Software streamlines AP functionality, enables seamless workflows, creates and tracks purchase orders, and automates contract management. It gives you the tools to analyze current spend on products and budgets—ensuring financial stability and encouraging growth. With procurement software, you increase visibility, improve controls, and standardize the purchasing process to make employees’ and vendors’ lives easier. 

An intelligent procurement platform helps businesses build insight into their spending. Some functions accomplished by procurement software are: 

• Centralized vendor lifecycle data (such as contracts and reports) for easy analysis
• Automatic visibility into spending, trends, and contract compliance
• Simplified procurement intake and approval processes
• Strategic sourcing to obtain the best goods at fair pricing
• Automation of repetitive tasks, which takes the burden off the accounts payable team and increases time for higher-impact tasks and initiatives

Let’s break down three ways your company can benefit from procurement software:

• Operational efficiency: By centralizing purchases and consolidating vendors into a company-wide platform, your employees make fast, systematic purchases with one click (and without manual ordering mistakes). Procurement software automates processes and gives your team more time to dedicate to improving operations.
  
• Transparency: Procurement software allows complete purchasing control by centralizing purchase requisitions, streamlining approvals, and providing insights on real-time purchases and purchase history. Knowing your numbers enables inventory management and helps procurement teams see where to eliminate unnecessary expenditures.
  
• Cost Savings: By showing what products your company is purchasing, how many of those products are purchased, and how much those products cost, procurement software provides insight into cost-effective alternatives. Procurement software displays the best prices offered by different suppliers and gives insight into areas where bulk purchasing may save money.

Companies without procurement software lack two things: organization and visibility.  With procurement software, employees purchase exactly what they need with full transparency of expenses and the budget—all in one centralized system. 

Ebook

Choose the Right Procurement Technology With This Decision Matrix

There are A LOT of procurement softwares out there. Make sure you're choosing the right one for your business.

Download

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What to look for in procurement software

The benefits of procurement software are vast, and those benefits are only enhanced when you choose procurement management software that offers advanced options. Look for these features of procurement software that separate the best from the rest:

Accounting automation: After front-end approvals, the ideal purchasing software makes it easy for accounts payable to route, reconcile, and pay for goods and services. Purchasing software automates the accounts payable process and frees up people and resources to handle more impactful work. 

Curation options: Decision-making is easier when users have a list of preferred options. Look for a tool that offers curated vendor catalogs and preferred vendor support. The ability to encourage strategic sourcing within the app also increases supply chain resilience.  

Flexible workflows: Every organization has different needs for vendor onboarding, approvals, and reporting. Look for a procurement management system that supports your individual needs with flexible workflow options. Choose a tool that enables fast decision-making with automated approval routing and notifications to shorten approval times.

Intuitive design: Users won’t adopt a tool if they can’t quickly learn the system. Find a tool with a well-designed UI that helps users get what they need quickly and easily. 

Integrations: Procurement software operates best when it’s part of an ecosystem of tools that manage the financial story. Look for an option that offers integrations with other vital finance tools in the accounting stack. 

A tool that meets all the above qualifications makes achieving procurement goals easier and paves the way for optimized spending and savings processes.

How does Order.co help companies thrive?

Order.co allows companies to strategically source products for the best pricing, automate vendor payments, and gain insight into company spend.

Before Order.co, BLANKSPACES, a coworking company based out of Southern California, struggled to bring efficiency and reproducibility to their purchasing process. Their non-centralized purchasing process made ordering, tracking, and reviewing purchases difficult. 

Facilities Manager Elizabeth Nowlin reveals how, at BLANKSPACES, “it was not rare that someone would ask ‘who ordered this?’". Her staff was “constantly running out of supplies”. She credits those issues to their disjointed, arguably non-existent, procurement system.

Now that they’ve implemented Order.co, BLANKSPACES has a central, go-to platform for sourcing the best pricing on products, managing purchases, and simplifying vendor payments. Elizabeth explains, “We are now able to place one, massive order in one cart for all our stuff—kitchen supplies, reception supplies, desks, and planters. It is so easy; there is one credit card, one order, one everything.” 

Choose the most reliable procurement software

Order is the all-in-one procurement hub for companies—providing robust features, capabilities, and support into a single procurement software solution. 

Using Order, your procurement team has the tools to improve operational efficiency and savings: 

• Supplier management and quick order features that make ordering and replenishment easier
• Automatic purchase coding to record transactions correctly in the general ledger every time
• Tools to analyze spend management, improve spending, and simplify accounts payable activities

Procurement automation is a must for any organization that wants to achieve its goals faster, make its teams more productive, and reduce the inefficiencies that come with manual processes. 

To realize these benefits within your organization, request an Order demo today.