Your business relies on a robust procurement process to keep parts, materials, hardware, and goods coming to your production lines.
You’ve got a good system in place, but what if it could be better?
Are there any areas of your procurement process that you can automate more than what they already are?
Purchasing is mostly automated. So is getting purchase orders to your suppliers. As is the approval workflow thanks to emails among staffers.
But there are some things missing, like being able to track who approved what, taking care of strategic sourcing in your supplier management process, and then what about futurecasting your procurement process?
Wouldn’t you like your procurement team to have every advantage possible?
We can help you pick out the best procurement software using a 14-point checklist to guide you.
Why does my company need the best procurement management software?
Procurement software saves you money over the long-term. The more you use it, the more you save.
Buying a new procurement solution is no small thing.
But here are some advantages:
- Reduces human errors
- Provides robust analytics
- Streamlines tasks
- Standardizes processes
- Gives certain levels of access only to authorized staff
Every procurement-heavy company is unique, which is why the right procurement software for small business must fit your needs.
We can help you decide how to find the right procurement solution through our handy 14-point checklist.
- Supports the Procure-to-Pay Cycle
- Integrations With Accounting Systems & ERPs
- Mobile Accessibility
- Ease of Use
- Operational Efficiencies
- Fast, Customized Approval Workflows
- Digital Audit Trails
- Budget Tracking in Real-Time
- Purchase Insights & Reporting
- Automatic Three-Way Matching
- Spend Management
- Supplier Management Capabilities
- Great Customer Support
- Fast Onboarding & Implementation
What is procurement software?
Sometimes called e-procurement software, it’s a platform designed specifically to automate your entire procure-to-pay process from filling out purchase orders to three-way matching and paying the invoice.
The main advantage of procurement software is the analytics. These types of platforms analyze the data and offer ways to improve your procurement process, manage suppliers, and perform strategic sourcing easily.
Accounting software is great. But it can’t analyze and improve your procurement data as well as specialized software.
And procurement software is most definitely better than using Excel spreadsheets.
Why does procurement software matter to your SMB?
Procurement software is important to your company because you can analyze spending and find patterns that might not otherwise be apparent. Your procurement team also gets a centralized place to look at all purchasing data to manage the entire procure-to-pay cycle from start to finish.
Then your organization can use the software to access key data to improve profitability and drive growth.
And now, our 14-point checklist for choosing the best procurement software.
- Procurement Software Supports the Entire Procure-to-Pay Cycle which is the whole point of e-procurement software. But if your chosen software supplier can’t deliver on what it says it can do, then don’t even bother with it.
Before you purchase procurement software, make sure it can perform several functions.
Identify what your procurement team needs to purchase, such as when inventory is running low or it’s time to regularly restock to keep your production lines going.
Create electronic purchase orders with certain information to fill in or already filled in, such as:
- Purchase order number
- Contact information of your company
- Contact information of the supplier
- Item descriptions, like self-sealing stem bolts or whole wheat flour
- Item numbers (if available)
- Quantities of each item
- Prices of each item
- Payment terms, like due on delivery or three monthly payments
- Delivery and logistics details, such as delivery due date and shipping address
- Payment method, such as credit card or ACH
Supplier management, including an analysis of price changes, quality issues, discounts, or delivery snafus.
Automatic three-way matching so your suppliers can be paid efficiently.
Invoice approval to pass on to the accounting or finance team.
Purchasing and receiving to allow your team to automatically pay for items once you receive them.
Payment integrations with your bank account or credit cards.
Recordkeeping by way of a digital audit trail to track who fills out purchase orders, who approves the purchases, and when items arrive.
Metrics and spend analytics to help you with future casting and cash flow planning.
- Procurement Software Integrates With Your Accounting System Your chosen procurement platform supplements your accounting system by integrating with common programs like QuickBooks and NetSuite.
Ask your e-procurement software supplier these questions first before you demo the software:
- Can your platform integrate with my existing ERP system or accounting cloud-based software, such as NetSuite or QuickBooks?
- Do you provide AP integration with my accounting software?
- How does your procurement software integrate with other tools we use?
There’s no sense in paying for procurement software that doesn’t work with other computer programs without having to go to another vendor just to purchase low-code integrations.
- Procurement Software Must Have Cloud-Based Accessibility
Your procurement software must be cloud-based so your team can access it from anywhere, including on mobile devices. Procurement teams need this functionality, particularly if they are working remotely. Procurement software must have the right security protocols in place to prevent a breach.
There’s another reason why you want mobile-friendly procurement software. Let’s say a piece of equipment breaks down or someone unpacks a crate of 25,000 3-inch bolts when they needed 25,000 3-inch nails. All that person has to do is get their mobile device, go to the procurement system, fill out a purchase order, and then it gets sent on up the line for approval in mere minutes and on the spot. That way, the lead time on the purchase order is shorter and the staffer doesn’t forget to fill it out later.
E-procurement software must allow your staff to:
- Request, approve, and receive purchases on the fly and wherever they are, such as on the factory floor or at the loading dock.
- Use automated notifications to speed up the purchase order approval workflow
- Take photos of receipts, packing slips, damaged packages, incorrect items, or misdelivered items using a mobile device.
- View and assess budgets, and set approval thresholds to keep departments within their spending limits.
Administrators should be able to easily control who has access to certain functions of your procurement platform based on roles and permissions.
- Procurement Software Is Easy to Use
Test the procurement solution before you buy it to see if everyone on your team can use it easily. After the test run, there shouldn’t be any qualms about moving to the new procurement software because everyone gave their stamp of approval.
Most certainly get a free trial or demo copy to use for a month. Set it up to work through your procurement process from start to finish, including the purchasing process. Do all of the steps make sense? Do they fit with what your company already does? Is everything in plain language? Does the navigation make sense?
If the procurement platform isn’t easy to use, then you shouldn’t purchase it.
- Procurement Software Can Improve Operational Efficiencies
Your procurement software allows managers, supervisors, upper-level staffers and owners to push for operational efficiencies across all departments.
Mobile functionality means people can assess inventory on the spot. Approval workflows operate more efficiently, even if the person filling out the purchase order is on one end of the plant while the supervisor is on the other. Automation itself saves time by handling mundane tasks that were otherwise done manually.
All of these things allow procurement teams to focus on supplier management and budgeting strategy.
Ask the following questions to assess if your vendor has the right procurement management software for efficiency:
- Does your procurement software speed up purchase cycle times?
- How will our teams use this procurement platform?
- How much time will this software save our teams?
- How much could this platform help us manage our spend?
Again, how your chosen software supplier answers these questions can go a long way to making a purchase decision.
- Procurement Software Has Fast, Customized Approval Workflows
Perhaps one of the best time-savers prevalent in procurement software comes from paperless approvals and ditching the spreadsheets.
Faster purchase order approval processes save everybody time. No one has to chase down a supervisor to sign a purchase order. That person automatically receives an email to review the request.
Top procurement software lets you customize approval workflows by dollar thresholds, users, permissions, departments, and locations. It speeds up the approval process, and therefore the receipt of goods, for your SMB.
- Procurement Software Creates Digital Audit Trails
Small business procurement software, unlike ordinary accounting software, captures and records the change history for your firm’s purchasing documents. You can see a digital audit trail from the original purchase order to the approval, and then to receipt of the order, receipt of the goods, and paying for the invoice from your supplier.
If your company is ever audited, the procurement software gives you a digital audit trail that has all of the information readily available.
Asses your chosen procurement software by seeing if it can:
- Track purchase order approvals and approvers for every purchase made.
- Keep a full history of all edits, viewable by you at any time on your mobile device.
- Show you exactly who requested, approved, purchased, and received any item in the procurement process.
Everything should be easy to see with just a few clicks.
- Small Business Procurement Software Offers Real-Time Budget Tracking
With manual procurement systems, even when you use Excel spreadsheets, it is impossible to see a real-time view of how your procurement process and purchasing activities impact your budgets, cash flow, and bottom line.
Your e-procurement software must be able to let you understand the following aspects in real-time:
- Portion of your budget already spent
- Approved spending that hasn’t been spent yet (excess budget)
- Amount left in the budget
Seeing real-time spend data makes it easier to approve or deny a purchase order request because you can see how items will affect a budget, if you have to shift budget, or if you need to infuse your production with more cash by altering the spending plan.
- Spend Analysis and Reporting
You must be able to control business spending based on your cash flow, and that’s important during economic lean times, when prices suddenly change, costs rise, or equipment breaks unexpectedly.
Spend analysis and reporting helps you decide if you should raise prices.
Check your procurement solution to see if it can deliver the right KPIs and spend analysis reports so you can make data-driven decisions that help your company grow.
Your small business procurement software must show:
- Who spends money
- Departments the spend the most on purchase orders
- What is being purchased throughout the company
- Supplier management analytics
Seeing who spends what on items your company needs lets you assess staff as well as spend.
- Automatic Three-Way Matching in Your Procurement Process
Purchasing discrepancies, spending over budget, duplicate purchase orders, and mistakes in the approval process can cost your company money it doesn’t have.
Any procurement software for small businesses needs to prevent these discrepancies from happening before it even gets to the three-way matching phase.
Automatic three-way matching allows your purchasing, accounting, and accounts payable teams to say with confidence that everything is accurate. No more chasing someone down for a document, such as a purchase order or invoice.
If your basic procurement solution can’t do this, keep looking.
- Spend Management With Procurement Software for Small Businesses
A great procurement platform helps you control and track spending by employees who use credit cards (company or personal).
Before you invest in a procurement solution, examine it to see if it can handle expense reports outside of your normal procurement process. Look for credit card reconciliation tools as well as the ability to easily upload scans or photos of paper receipts and credit card statements.
- Supplier Management Capabilities in Procurement Software
Improved supplier relations mean better spending. You can look for bulk pricing discounts or better quality service. For example, two purchase orders come in within an hour of each other for different production lines. Both want the same items. Adding the two orders together triggers a bulk discount for a single order. Procurement software can allow you to easily see this.
Make sure your procurement platform can:
- Manage all suppliers in one place.
- Track supplier performance, such as goods delivered on time, defective products, or wrong quantities delivered.
- Measure suppliers against KPIs such as speed, accuracy, price, and quality of goods.
- Streamline supplier emails, phone calls, and communication
- Create custom supplier catalogs to help employees order correct items from approved vendors at the lowest prices.
Vendor management allows you to assess whether you should find a new supplier to replace a wayward one.
- Customer Support for Your Procurement Process
When you need assistance with your procurement software, can you readily get in touch with your account manager, tech support, or anyone on the help line?
Look for online reviews and references for the procurement software provider.
Customer support 24/7 or at least 24/5. This is important for production lines that run three shifts.
A dedicated onboarding team, account manager, person who can train your staff, and a customized onboarding process to help your staff get up and running as soon as possible.
An online knowledge base or help center updated regularly as the software evolves.
- Fast Onboarding & Implementation of Your Procurement Software
Downtime is never good, whether it’s due to equipment failure or the installation of your new procurement software.
You should have very little downtime with a new procurement platform. Find a software supplier that can make the switch with few hassles so your team can start using the platform quickly.
A procurement system is easy to set up when you see:
- Fast data onboarding process in as little as 24 hours for some cases
- Clear onboarding materials
- Easy to understand user onboarding process
- Examples of onboarding and training support
- Fast training time in hours or days rather than weeks or months
- Testimonials and reviews from current customers still using the platform (if you don’t see any, ask for references)
- Case studies to show ease of use and efficient onboarding (on the website or readily available through email)
You’re paying for the procurement solution, so you should be treated like royalty.
Let ControlHub Help You
ControlHub is the perfect procurement solution for your SMB, giving you a full suite of tools to make your procurement process more streamlined and efficient. Our platform gives you all of the tools you need to analyze spending, purchasing, and much more.
Contact us today to request a demo. You won’t be disappointed.