Procurement professionals understand that the vendor supplier relationship is vital to a successful procurement department. This is an extra benefit and contributes to cost-savings by qualifying your organization for discounts based on quick turnarounds on submitted invoices. By implementing a clear and well-defined invoice payment process, your team will also be able to more quickly and efficiently deliver payments upon receipt of goods or services.
Being prepared, however, will save your team time, effort, and frustration while allowing your organization to continue operating while the issue is addressed.Ĭost-reduction and time-management are two of the core principles of procurement. Having a clearly defined invoice payment process won’t only help your organization in streamlining the procurement process it will also provide your team with direct actions to take when mistakes inevitably happen.
Whether a procured product fails to meet a certain specification, discounts are misapplied, or orders simply go unfulfilled, your organization needs to be prepared for how to handle this in the context of the invoice payment process. Supplier side errors can come in a wide variety of forms. Handling and Managing ReturnsĬonsidering how involved the procurement process is in keeping an organization running smoothly, supplier-side errors can throw a major wrench in day-to-day operations. This is an important detail to consider as procurement professionals, then, are also charged with acquiring the materials, goods, and services not only needed for the products and services that the organization offers but also all of the day-to-day materials needed for the organization to continue operating smoothly. In other words, a purchase requisition is then followed by a purchase order. The difference between a purchase requisition vs purchase order is that the latter is a preliminary step to the former. Procurement professionals are also charged with fulfilling purchase orders. However, the other major aspect of procurement, that sometimes goes overlooked, is the internal aspect. There are, of course, the traditional procurement activities which include vetting and short-listing potential vendors and suppliers, conducting reverse auctions, and finally awarding and managing the won contracts. When considering procurement activities, the comprehensive portrait really begins to take shape when considering that procurement activities really act as the oil that keeps your business running smoothly. It reaches all the way into accounting and finance, inventory management, and touches, to some capacity, every department within an organization. It’s surprising to some, but the procurement process extends far beyond the initial stages of vetting and sourcing potential vendors for goods and services. However, this is where we start to see more of that iceberg mentioned above. Invoicing process and payment approval may not seem like procurement-related activities, as they’re traditionally assigned to the finance and accounting department. For example, the invoice payment process is a vital aspect of the procurement process that needs to be regulated, managed, and strictly overseen. Procurement, while often reduced to the actions of buying and selling, awarding contracts, and sourcing goods or services for a company is actually much more involved and comprehensive than that. This is certainly the case when it comes to procurement. “Just the tip of the iceberg” – it’s a common phrase used when there’s a lot more to something than first meets the eye.