In today’s fast-paced business climate, dealing with large numbers of suppliers can get so complicated that only an automated system will keep you in control. Part of the challenge is matching suppliers and purchases with corporate policies; part of it is properly handling large volumes and varieties of documents. In either case, trying to handle the processes and papers manually is a recipe for failure. The solution lies in applying requisition and order management, invoice management and other types of automation to your purchasing process.
Purchasing policy issues alone can overwhelm the under-prepared. You might have good reasons for dealing with preferred suppliers, such as specially negotiated pricing. Alternatively, you might want to monitor multiple vendors’ pricing structures so that you can take advantage of special deals or volume discounts when they are available. Purchases might also have to comply with various regulations, and will likely need approvals from different managers in your organization.
From Automated Pre-approval to Automated Invoicing
Requisition and order management software can help you deal with such issues. They can let you, for example, set up an automated pre-approval process that fulfills all necessary requirements. The purchaser can create a requisition and route it through this process. Once approved, the requisition automatically turns into a purchase order, and the purchase order gets automatically sent to the vendor. Among other things, this eliminates a number of manual steps, which saves time and reduces errors.
The process of handling purchase documents can be even more complicated. Your company may receive invoices in a variety of forms, such as e-mail, file transfers (including XML, EDI and Excel), scanned documents, Web-based invoices and even paper documents. Invoice management software can put all of these types of documents into your system using optical character recognition (OCR) or other methods to extract the relevant information.
An automated invoice management system can also help integrate purchase documents into your workflow. It can, for example, capture non-PO invoices and attach supporting documentation to them. This lets your employees make necessary purchases without disrupting the accounts payable system. Additionally, it can give special attention to invoices with special payment terms. This lets you take advantage of maximum discounts. It also helps eliminate late payments and the consequences thereof. In addition, reporting capabilities let you track discounts based on various criteria. For example, you could determine the percentage of discounts according to division, product or category.
It’s About Visibility
With the right kind of automation, you can even set up a portal so that select suppliers can serve themselves. This will let them submit invoices online and monitor the payment status, with no need to contact your staff for information. Such a system may also help you stay informed about various aspects of the supplier’s process. It might let you see which orders are open or have been shipped, for example. Or it might let you know when the products you’re ordering are or will be available.
An invoice management system may work as a standalone application, or may be part of a larger e-procurement system. In either case, it’s a mandatory tool for those who want to stay in control of their purchasing process.