Procurement can be very complex, especially with all the regulatory issues that companies must increasingly navigate. After all, there’s a growing number of companies that are covered by sanctions and other adverse actions. Then, you must keep track of every penny to eliminate wasteful spending and ensure that your tax documents are accurate each year. For this reason, most procurement departments have a lot of manual record-keeping they must perform.
Wouldn’t it be nice if you could reduce the demand on your purchasing team by automating many of the less complex tasks? We sure think so. One of the best ways to improve your procurement process is by using punchout catalogs.
In this article, we will look at how a punchout catalog can be helpful to your business. Then, we’ll discuss how to integrate punchout with your finance ERP. From this, you will see that the integration is not that difficult, and it will save your employees a lot of time. Better yet, you’ll get better record-keeping and increased customer retention in the B2B space.
Punchout system overview
By now, you probably realize that punchouts are a way to save time. They’re also an excellent way to attract and retain new customers. However, it’s the way in which punchout makes life easier for procurement teams that’s so valuable.
A punchout catalog makes ordering easy
First, with a punchout catalog, it’s a lot easier for a purchasing team to choose and order products. That’s because when your team needs to order something, they can just open their E procurement system. Inside that software, they will simply type in what they need and then select a vendor from the approved list of possibilities. Then, your employees can browse the catalog and choose what’s needed.
Once selections have been made, the employee pushes another button. This time, the product information is transferred to the E procurement system for processing. Then, the system will automatically obtain approvals and issue a purchase order.
Punchout catalogs help with customer management.
From a supplier’s perspective, the punchout system is also great because it makes customer management much easier. Perhaps the biggest reason for this is that a company’s IT department can quickly update each punchout catalog to include the most recent information.
For instance, when there’s relatively high inflation, prices can change quickly. At the same time, many companies have special negotiated rates for various customers. In this type of situation, it can be very difficult to keep customers informed of necessary changes. Then, a supplier might have trouble with a customer who doesn’t want to spend that much money. By practicing full disclosure and informing customers of changes efficiently, we can avoid many of these pitfalls.
Cash management is much easier
From a cash management standpoint, using a punchout catalog is beneficial for both buyers and sellers. From the buyer’s side, punchouts that are regularly updated help ensure that every invoice received is quickly matched up with the purchase order. Similarly, punchout catalog use for clients means that everything bought from a supplier is automatically logged into the business’ procurement records.
Similarly, as purchase orders are sent out, and the fulfillment process continues, both sides know what to expect. For example, the supplier can respond to purchase order issuance with an order confirmation issued immediately and followed quickly by a shipping confirmation. Likewise, many purchase orders can be issued quickly, thereby allowing customers to get what they need faster.
Best of all, if there’s a problem with an order, it’s much easier to find using a punchout catalog. That’s because everything ordered through the procurement system is automatically logged. Any errors can be corrected much faster, whether that’s an erroneous order quantity or inappropriate spend that needs follow-up.
Integrating punchout with a finance ERP
There is little question that most purchasing software can handle punchout technology. However, for most companies, there’s more to invoice processing and spend management than just procurement. For instance, most companies of financial software and business reporting. They also need to know exactly how much each item costs per unit of product or the amount of overhead. The second amount helps them set product prices for adequate profit.
With that said, there are some simple technological ways to integrate your systems and increase efficiency.
Use dedicated punchout software
Your first option is to use dedicated software. These are simple programs written with common programming languages and designed to interface with almost any kind of financial software. For instance, it will transfer the invoice from your ordering system into your payment system seamlessly. Then, you’ll be able to identify spend categories and debit the right departmental budgets.
Dedicated punchout software is designed to work with more than just your E-procurement system, however. In fact, you can leverage punchout integrations for your overall ERP. One reason this is beneficial is that modern E-procurement systems like ControlHub will help your procurement department know when something needs to be ordered based on current usage.
Of course, there are always exceptions. For instance, it’s easy to predict how much copy paper you’ll need in a month, but unexpected surges in ordering can sometimes require quick adjustments. This is where the ERPs shine because they’ll alert your procurement staff to put in another order for needed supplies and, if applicable, to increase the order size for next time.
Best of all, dedicated software is designed to work with all types of ERP. This way, if you change your ERP down the road, you might be able to support your punchout software from one system to the other. Then, your customers won’t realize you made changes to the software lineup. Best of all, they’ll get an invoice from your company as usual.
Another option is OCI integrations. These aren’t technically punchout, but they work almost as well. Within OCI, or catalog interface, your purchasing system can immediately see what your company has to offer. However, they will go to a facsimile of your website to choose items. Instead, they’ll make selections similarly to a paper catalog, then fill out a purchase order.
The disadvantage with OCI is that they don’t update in real time. Technically, this means that a price may have changed in the meantime. However, with careful maintenance of your database, you can manage this risk.
Use procurement software with punchout integrations
Finally, a complete E procurement system like ControlHub can help. From the buyer’s perspective, ControlHub has access to all kinds of vendor catalogs. All that you need to do is request punchout access from each vendor and then integrate the links into your software. Then, you’ll see everything work seamlessly. Sit back, relax, and let the software do most of the heavy lifting.
It’s easy to be intimidated by the idea of punchout catalogs. After all, for many startup companies, in particular, there can be a lot of demand on the IT department., an ERP integration isn’t as difficult as it might seem. Instead, there are premade integration codes that can easily be added to your system. Also, if you’re a buyer is then modern E procurement software should have punchout integrations already built in. You’ll simply need to connect your financial software as usual.