In procurement, guided buying is a time-saver for everyone. Everything from buying office supplies to acquiring raw materials for manufacturing requires some type of procurement process. But the procurement department has its own set of challenges. Maverick spend and fraud can be major problems for any business. Aiding the procurement department with some of their tasks means they can keep a closer eye on potential issues and have much better visibility into spending. Guided buying lets employees buy things from preferred suppliers quickly and easily. It’s an efficient, collaborative method for streamlining procurement operations. Here’s how using guided buying can help streamline your procurement and purchasing.
Why Use Guided Buying
Guided buying is usually just one component of a larger procure-to-pay system (P2P). The simplest, most direct reason to use guided buying is to make the purchase/acquisition of common items easier. In guided buying, purchasing and spending are dramatically simplified. When employees need to buy something, procurement guided buying allows them to access a buying guide based on organizational roles (usually assigned at a higher level within the organization). Those who possess profiles to use guided buying can use the system to quickly and efficiently make re-approved purchases. Because these are pre-approved, the procurement team is usually not involved, which frees them up to perform their vital job functions without concerning themselves with the micromanagement of employee purchases. What makes guided buying such a good spend management solution is its ability to save time, energy, and money while simultaneously providing quick access to the products an organization needs to operate efficiently.
More Choices
A noteworthy aspect of guided buying is the sheer abundance of available choices for procuring items. Sometimes, purchasing choices can be quite restricted. When they have to go through the larger procure to pay process, there are definitely going to be some speed bumps and restrictions on what you can purchase. With guided buying, there are more options from more vendors due to the smaller scale and pre-approved nature of the punch-out guides used in these situations. That means more choice, better selection, and faster procurement of some of the more basic pre-approved items your company needs for its operations.
Better Accuracy
Punch-out guides are part of the guided buying experience. A Punch-Out guide is a special version of a vendor/suppliers inventory that users can access through their guided buying system. Essentially, the employee shops for the supplies they need using the punch-out guide. Then, they place the items in the cart and go to check out. Instead of checking out on the vendor/ supplier’s website, the punch-out guide points back to the guided buying software company is using. At that point, the employee can make a purchase with all the goods from the supplier’s punch-out guide within their own software. This type of guided buying provides better accuracy and insight into purchases while keeping everything running nice and smooth.
Improving Spend Visibility
Procurement fraud can become a major liability for any business. That’s why understanding spend visibility and analyzing spend are some of the most crucial functions your management software can perform. Spend visibility means finding ways to decrease costs, detect fraud, and analyze your procurement to improve supplier relationships. Data must be collected, analyzed, and assessed. To do that, software is one of the best ways to acquire such data in real-time. This ultimately improves your spend visibility so you can see what’s happening with procurement when it’s happening. Better spend visibility leads to improved analysis, which can become invaluable when it’s time to source new suppliers and make fresh purchases.
Improving Compliance
Every industry needs to conform to some compliance standards. Just like having car insurance is required to drive in most states, reinforcing compliance standards is just a regular part of doing business. In this case, compliance refers to staying true to the procurement standards set forth by the company. By using a guided buying system, employees can remain compliant in everything they do regarding purchasing and avoid causing maverick spend or other risks. This means that resources can then be allocated to different, more important initiatives and less time needs to be spent on making sure employees are following applicable procedures. Compliance standards are an integral part of successful procure to pay operations and guided buying in that particular area.