Predictive Purchasing for the Savvy Enterprise

Predictive Purchasing for the Savvy Enterprise

June 16, 2020

Informed buying, just as informed decision-making, goes a long way in helping secure corporate resources and prevent mismanagement of funds. Getting to know and capitalizing on vendor relationships is one good way to reduce haphazard buying and expenses. A simple tool such as Intelligent Process Automation helps with predictive purchasing.

How to Optimize Purchasing in these Uncertain Times

How to Optimize Purchasing in these Uncertain Times

Technology has come a long way in enabling businesses to react to market fluctuations more prudently. Price changes to raw materials and goods is a natural response to market dynamics and the economy. The procurement or purchase department of a company is responsible for making note of price changes in raw materials and equipment, and revise buying accordingly— any deviation in purchasing against the allocated budget could affect a company’s financial standing, especially when it comes to bulk purchasing, and could end up costing the company dearly. Keeping tabs on purchasing is a vital aspect of sound operating expense management and the purchase department is responsible for it.

A New Way of Budgeting— Applying IPA to Mission Critical Processes

Optimized buying is an exercise that requires due diligence on the part of the purchase department and consistent sound relationship with the vendor networks at large. Having a contracted consignment of goods and services from vendors on a regular basis helps companies keep tabs on periodical purchases and reduce instances of over-expenditure. The advantage of maintaining a consistent portfolio of vendors is that your company could benefit from discounts for bulk purchases or early payments being made for goods purchased on credit. A suitable automation solution that captures, processes, and records vendor invoice processingis a good tool to invest in when you want to keep tabs on purchases.

See what you’re missing out on.., HINT: Intelligent Automation

See what you’re missing out on.., HINT: Intelligent Automation

Vendor invoicing is an important aspect of procurement management that takes up a lot of valuable hours of skilled workers and is costly, if not managed well. Automate this aspect of procure-to-pay and you will see immediate cost savings in terms of operational efficiencies and reduced dependence on manpower. But more importantly, there is a reason why companies are focusing on automating key functions along all end-to-end processes such as order processing in order-to-cash, invoicing in procure-to-pay, and claims processing in the insurance sector— with automation, all these heavily document-dependent processes are now subjected to continuous monitoring and have a definite audit trail. Data from automated processes constitute an excellent reference for organizations looking for insights on their buying patterns and frequency of purchases being made. This gives management an idea of their spending, which they can tabulate against related productivity and sales to know where they stand in terms of business progression and growth.

Advantages of Predictive Purchasing using Intelligent Process Automation

  • Vendor Cataloging: automated vendor invoicing leaves a lot of post processing data that can be studied to understand how you can tag your vendors based on quality, delivery, and pricing. This becomes an easy reference for you when looking for the right vendor to approach based on your budget and business requirements.
  • Planning: an updated vendor catalog is very useful when you are planning bulk or seasonal purchases, and allows you to make calculated purchases based on the viability of each vendor and your budgeting constraints. This reduces instances of haphazard, spur-of-the-moment purchases and saves you valuable dollars.
  • Centralized Buying: if you have gone overboard with your shopping, it could mean two things: (a) either you’ve sourced the wrong vendor without making due assessments or (b) you’ve paid little attention to the on-goings in other departments that may have revised the budget, their requirements document, or halted related proceedings momentarily.
  • The 2nd scenario is a classic case of the left hand not knowing what the right is doing. Intelligent Process Automation solution not only automates invoice handling but also helps document the purchases made, pending payments, piecemeal budget allocation for every project or task, as well as a full list of ongoing or future expenses across departments. A centralized view of purchasing prevents companies from mismanaging corporate funds.
  • Build a Reliable Supplier base: having a report card of supplier performance, compliance, and reliability is critical to you forging long-term, stable relationships with them. This in turn aids in your purchasing through availing better discount options and quality control of materials sourced.

The benefits of Intelligent Process Automation for mission critical tasks are many, but the most important takeaway from an end-to-end automated solution is that you will always have full control and visibility into your company’s expenditure and finances, and that is more than half the battle won, when you have to weigh your options constantly in an unstable economy.

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