Risk Of Going Without Source-To-Pay Software
E PROCUREMENT SOFTWARE
Organizations that do not capitalize on the benefits of modern procurement solutions are exposed to variety of risks. From financial instability to lost efficiency and lack of data transparency, not using software for e-procurement can be detrimental. Here is review of the potential risks for organizations forgoing the advantages of source-to-pay software.
Financial Risk
Without source-to-pay tools, organizations are far more vulnerable to potential financial losses. The manual processes associated with procurement mean that there is greater potential for mistakes and lost savings, with budgets quickly surpassing their limits. This is especially true for more complex contracts between multiple suppliers, requiring more careful analysis and more staff members to negotiate with multiple vendors. Additionally, manual invoice submission increases the potential for double-payments or lost payments while slow invoice processing time leads to greater late payment fees, reducing the bottom line.
Information Security Risk
The lack of electronic security offered by manual procurement methods can leave businesses open to data breaches. Dispersed information stored on unsupervised computers or servers can create weak point in the organizations it isecurity. Companies relying on manual solutions are also unable to protect their data from internal threats or malicious actors since logins and passwords are often shared across multiple users.
Compliance Risk
Without Source-to-Pay software, organizations may find themselves noncompliant with government laws and regulations. Most automated solutions come with preconfigured checks to help users meet their legal obligations when entering into contracts. As regulations become more stringent and complex, organizations are more likely to overlook critical detail. But with Source-to-Pay solutions, businesses can streamline contract development by applying the latest changes in regulation to the process quickly and efficiently.
Lost Efficiency
Given the volume of paperwork and processes required to negotiate contracts or settle an invoice manually, organizations are likely to experience greater inefficiencies. Starting from suppliers request until the supplier onboarding process, it can be challenge to keep track of all necessary documents and ensure that every step of the process is properly managed. Time-consuming manual activities such as invoice sorting, paper filing, and manual data entry also slow down the entire process, reducing the efficiency of the entire performance cycle.
Lack of Transparency
Without automated tools, organizations forfeit the ability to access the necessary information in timely and secure manner. Managing high number of contracts in spreadsheets can quickly become cumbersome, making it difficult for the organization to identify issues and trends. Source-to-Pay solutions, by comparison, offer single, central repository of all the data, helping businesses make accurate and data-driven decisions.
In conclusion, the potential risks associated with going without Source-to-Pay software can be easily avoided. Investing in procurement solutions can guarantee greater financial stability, compliance, data security, improved efficiency and visibility, and reduced costs. Organizations will not only be able to recover their investment in the long run, but they may also increase their profitability and competitiveness.
