An effective purchase authorisation process ensures compliance with established approval policies to avoid unnecessary or inappropriate purchases.
An effective purchase authorisation process ensures compliance with established approval policies to avoid unnecessary or inappropriate purchases. Performed online, this process is faster and more transparent for employees, provides managers with greater budget control, increases ‘cost pipeline’ visibility for financial management, speeds PO release to suppliers, enables automated receipt and invoice matching, and captures an electronic history of spend activity for Procurement’s use in spend analysis.
But many organisations find themselves caught between the need for both control and efficiency. When the purchase process is unstructured or lacks controls, purchases are often made without proper authorisation, purchases are made with non-preferred suppliers, there is no management visibility of purchase commitments, purchases are often attributed to the wrong accounts or departments, and no one really knows what is being bought over time. On the other hand, if the authorisation process becomes too cumbersome in an attempt to control it, critical purchases are often delayed, the cost of the processes grows, valuable productivity is lost throughout the organisation, and frustrated employees find more ways to make purchases outside the system. At either extreme, the organisation loses.
The PROACTIS Purchase Authorisation Jump-Start Solution
helps organisations address this critical element of Spend Control. Using this service you will quickly and efficiently put in place:
- Easy online entry of purchase requests and requisitions for all types of goods and services
- Automated authorisation workflows based on approval policies and organisation structure
- PO release to suppliers along with receipting to prepare electronic POs for invoice matching
- Budget and purchase commitment visibility for departmental and financial managers
- Capture and reporting of detail spend data for use by Procurement in spend analysis
The benefits of an effective online purchase authorisation process are significant:
- Avoidance of unnecessary or fraudulent purchases
- Greater use of negotiated supplier agreements and contracts
- Reduced freight/delivery costs
- Reduced cost of paper request and PO handling
- Reduced cost of AP (fully realised with automated invoice processing)
- Reduced cost of administrative support
- Greatly increased financial control and visibility
- Improved budget management
- Increased workforce morale and productivity
- Reduced risk of supplier non-performance and non-compliance
- Greatly improved data for spend analysis