Procurement Issues & Their Solutions

Michael Higgins
October 21, 2019
199 Views

At some point or another, every company faces a procurement issue. This could happen due to factors you can’t control such as low-quality suppliers and materials. It might also occur due to higher lead times from the suppliers. Sometimes, the market rates may also play their role in creating issues. 

However, these issues can also be caused due to faulty and incompetent tools and processes. Many companies also face issues with internal communication which can result in procurement fraud and data duplication. 

The Costs Involved 

Poor procurement processes can lead to higher expenditures. In fact, your costs can increase by 5 times due to this reason. However, monetary loss is not the only loss that you may incur. 

Businesses across the US and Canada lose nearly 32 million man-hours yearly due to poor procurement processes and tools. As many as 54% of companies still use paper invoicing, which can cause a lot of time wastage.

Such inefficient practices and tools put companies at great risk of becoming victims of procurement fraud. The easiest targets are those companies that may not have a centralized system for tracking accounts payable. That’s perhaps the reason why nearly 29% of small companies have been victims of billing fraud.

The Solution

The best way to solve procurement issues is by automating things. You can easily automate repetitive tasks and reduce human error through the use of procurement management technology. The processes can also be streamlined through automation. 

Automation also ensures that the data is available to multiple members of your team freely. This can increase the transparency in your company and thus make it easier to detect any fraud or data duplication too. 

Tasks such as invoice processing can be automated and may reduce errors by up to 40%. Your cost per invoice can also come down by almost 90% and the invoice exception rate can decrease to 10.7% solely through automation. 

To understand more about how technology can help with procurement issues, check out the infographic below by PurchaseControl.

Major Procurement Issues & How to Fix Them with Technology

Image courtesy: PurchaseControl

 

You may be interested

Understanding How to Create an Effective SaaS SEO Strategy
SEO
27 views
SEO
27 views

Understanding How to Create an Effective SaaS SEO Strategy

David Watson - March 31, 2020

Operating a SaaS company has become increasingly difficult throughout the past few years, as the industry has become more crowded…

The Microprocessor: Cornerstone of Digital Progress
Featured
26 views
Featured
26 views

The Microprocessor: Cornerstone of Digital Progress

admin - March 31, 2020

  The post-war period of the late 1940s saw dramatic shifts in the scientific community as the atomic age dawned.…

How Digital Marketing Differs From Traditional Marketing?
SEO
25 views
SEO
25 views

How Digital Marketing Differs From Traditional Marketing?

David Webb - March 30, 2020

Many businesses, especially startups, grapple with a strategy for utilizing the marketing dollars towards the best possible outcomes. Businesses don’t…