How To Cut Costs Per Invoice By 200 Percent
During an organization’s ordering process there are typically numerous intricate steps, and various factors to consider before an actual order can be placed.
Purchase orders (POs) often involve complex approval workflows, multiple budgets, hundreds if not thousands of suppliers and contracts, endless data, and millions of dollars.
Organizations often struggle with how to manage this process without losing both visibility and control.
This becomes an even bigger issue when considering the widespread nature of the procurement process and its interconnection with multiple other departments. These relationships make it far more challenging to assess and determine where and how improvements can be made.
In a 2018 study conducted by PayStream Advisors, now Levvel Research, over 400 organizations were surveyed to determine the latest trends surrounding procurement management.
The following pain points were uncovered:
- Inadequate technology
- Procedural differences across departments and/or locations
- Frequent off-contract or off-budget spending
- Too much paperwork
- Disjointed systems
- A lack of visibility and/or control overspending
Firms Benefit from Utilizing Email to Send POs
An organization’s control overspending can be significantly impacted by a PO’s format and how it is submitted to suppliers. Fortunately, the majority of organizations surveyed are either using eProcurement software or email to send POs. These methods provide more visibility and greater control for organizations compared with those organizations using manual or uncontrolled methods, such as over the phone or ad-hoc online ordering.
Reduced Cycle Time: Greatest Benefit to Procurement Automation
Most mainstream organizations have some kind of automation in place whether it be a homegrown procurement tool or a built-in tool that is embedded within their ERP system. While these companies have a more efficient way of processing their POs than novice companies, their cost per PO still remains rather high.
Organizations utilizing cloud-based eProcurement tools are required to have little manual involvement in their procurement process and can, therefore, process POs at a much lower cost. In fact, their cost per invoice is almost 200 percent less when compared to that of novice or mainstream companies.
Aside from lowering processing costs, other major improvements and benefits to procurement automation include reduced cycle times, improved visibility and transparency, and enhanced control and security.
Is your firm looking to cut costs per invoice? Contact EqualLevel, a platform bringing sophistication to the procurement space.
