Three Ways to Better Control Procurement Spending

For enterprises with manual procurement processes, or medium-sized businesses without a procurement department, spend management may be seen as an afterthought rather than as a priority. These types of companies often prioritise other areas of the business, such as employee experience or customer service. However, managing spending is crucial for success, as it is a key factor in driving profit, which is often considered the biggest factor in determining business value.

The key to managing spend lies in accurate data and metrics. Without access to this type of information, businesses are unable to identify areas of improvement or measure the success of existing strategies. Those who rely on manual processes are more likely to have insufficient financial control, resulting in overspending.

Some industry experts estimate that cost savings of up to 10% and effort savings of around 40% can be realised by embracing procurement software. So, businesses can both boost profitability and streamline processes by taking this approach.

Identifying the Right Suppliers

 For many companies, supply chain and logistics are responsible for more than 10% of overall costs. To overcome this issue, businesses need to optimise the procurement function. This all begins with the onboarding process and, before jumping into any vendor relationship, businesses must conduct a comprehensive background assessment of potential suppliers, serving to validate partners to ensure they meet their cost, speed and environmental criteria.

Streamlined Data Analysis

Once a new supplier has been fully validated and is on board, there is still more room for improvement. However, this is only achievable if companies can easily compare and analyse the relevant data. If companies rely on multiple documents spread across different departments, they cannot gain actionable insights into which areas of the procurement process can be improved.

Ultimately, by having a single source of information, businesses can gain a clear view of their entire supply chain and easily identify where they are overspending and additional revenue opportunities.

Enhancing Supplier Relationships

Vendor management is an ongoing process that doesn’t end after signing the initial contract. To continue optimising procurement spending, organisations need access to comprehensive reports on a vendor’s performance. This supplier database acts as the cornerstone of supplier relationship management, enabling organisations to guarantee better spend coverage. In addition, this provides businesses access to accurate data which can be leveraged to collaborate with suppliers to further identify areas for continuous improvement.

Future of Procurement

 Performing these 3 key steps is crucial to optimising procurement spending. However, this isn’t achievable without effective procurement software. At Synertrade, we provide a reliable solution that integrates with your existing software enabling access to a single source of information. With accurate data and advanced analytics, businesses gain data-driven insights and can better collaborate with suppliers to truly optimise finance processes. Through enhanced visibility, they also gain greater control over expenditure, resulting in long-term success and profitability.

To find out more about how we can partner with your business to transform the procurement function, talk to us today.