The standard purchase order plays an instrumental role in the accounts payable side and overall operational cycle of any business – especially when it comes to tools, equipment, supplies and inventory procurement. Perhaps your purchase order protocol and procedures have worked well in previous years, but improving the process is on your list of New Year’s resolutions. If so, below is an overview of the various steps you can follow to take your procurement process to new heights in the new year:
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Human error leads to some of the costliest mistakes in the realm of accounts payable specifically when it comes to purchase order protocol. Trusting in the efficiency of automating your purchase order process can drastically reduce (if not, eliminate) human error within this equation. Research shows that automation will also lead to an 83% reduction of the time spent processing purchase orders and a productivity boost of up to 60%. In addition, your company will enjoy a major reduction in operating expenses (up to 65%) by switching from manual to automated purchase order procedures.
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To enhance the quality and efficiency of your purchase order procedures and overall procurement process, you must ensure that the lines of communication remain open. The communication of essential business documents and procurement data serves as the cornerstone of the procedure’s success or inevitable failure.
Recent studies have shown that the commerce XML (cXML) standard has increased in popularity in recent years. It was first established over 20 years ago, but its current stage of accessibility and availability have reintroduced it into the world of purchase orders and procurement protocol. By investing in cXML, you will lighten the load associated with such activities as fulfillment updates, order receipts, and catalog transport. It is widely recognized as the top B2B protocol and is the exclusive outlet for punchout implementation in today’s market.
A major mistake that many procurement teams make is a premature release of the purchase requisition. It is understandable why you may be in a rush to release these requisitions and unlock the next stage to keep your business operations flowing without any downtime or delay. However, you must take the time to confirm if there is still a need for additional materials or goods before releasing the requisition. Check the track record of your available inventory. You may also need to discuss the track record with other team members to ensure nothing was overlooked. Once you have confirmed these pertinent details, take the necessary steps to release the purchase requisition.
You must prioritize the relationships that your company has with each supplier – especially the ones that you conduct business with frequently throughout the year. A strong relationship with your suppliers will ease the overall procurement burden and will greatly boost the efficiency of your purchase order process. Ensure that everyone is on the same page regarding such key topics as contract compliance, pricing, performance and associated timelines. Avoid becoming too complacent with your communications and overall correspondence with your suppliers. Help them to see what they can do better to improve and encourage them to offer your company the same honest feedback.
Another way to boost the efficiency of your purchase order procedures is to analyze all key performance indicators. These indicators will help you to have a crystal clear understanding of the success (or failure) of your current procurement process. It will help you to shine a spotlight on the strengths of your procurement protocol – allowing you to praise and recognize the key players within your organization that handled those areas. More importantly, you will identify the areas of improvement and concern that need your immediate attention. Keep in mind that your key performance indicators may change with time. As a result, take the time to analyze these KPIs now as you prepare for the new year.
You may rely on your primary sources and vendors and not have any issues whatsoever – especially if they have been dependable for several years. However, to boost the efficiency of your procurement protocol, you should take the time to examine the market and search for secondary sources. As the old saying goes, you should never put all your eggs in the same basket. Unexpected events may occur, and circumstances may change.
For instance, what happens if your primary vendor is not able to deliver the goods and materials you need on time for a specific project? Having a secondary source readily available will make it easier for you to keep things moving forward and meet your deadlines without delay. Otherwise, you will run the risk of decreasing productivity and potentially losing business.
Author Bio: Samantha Wallace is a veteran tech writer and editor who has worked in several eCommerce companies. She has been covering technology online for over five years. She is the Content Advocate for Greenwingtechnology.com.
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