Biggest Procurement Challenges faced by Corporates
Dated P2P systems often have frustrating, overly complex requisition and approval processes. These processes require several steps that need accurate completion with approval from the right, often busy, authority first. This happens before the requisition moves forward, making the process days or weeks longer.
The larger a company, the easier it is for manual processes to create major discrepancies in the procurement process. Some departments will have unique relationships with vendors or follow their own policies. This can lead them to miss out on leveraging company-wide orders for discounts and a better vendor relationship.
Failing to match invoices to purchase orders can lead to a host of problems, including double payments, penalty fees, and missed discount opportunities. Over time, these discrepancies can slow down your business and damage your reputation with vendors
Onboarding new vendors can be complicated. Without a streamlined procurement process in place, companies have no way of comparing vendor performance or cost. More so, there’s no way to assess risk or how they fit into your supply chain.
Any time you have multiple moving parts with people manually completing tasks, you’ll have a greater chance of error. Paper invoices present plenty of both. Additionally, they make it difficult to automatically check for errors.
However, maverick spending happens when employees, either intentionally or unintentionally, ignore company policy when making purchases. As a result, the company misses out on discounts and other benefits they could get when purchasing from vetted and preferred vendors.
Siloed tools like emails, spreadsheets, and chat threads dismantle data and don’t offer complete visibility into the purchasing process. Decentralization of data with lack of analytical tools lead to audit failures, lack of traceability and regulations.
Current procurement processes often function in siloed systems. As a result, C-level executives struggle to see any congruence in data points. Sure, they can see the overall spending, but it’s challenging to evaluate how strategic or necessary purchases are.
The procurement process has multiple moving systems in it, from invoicing to payment processing. Larger businesses have more steps, processes, and typically more siloes that only serve to create more complex systems.This can make processing invoices time-consuming and painstakingly inefficient.