Risk Assessment Of E.Procurement Without Source-To-Pay Software
E.PROCUREMENT PROCESS
Electronic procurement (e.procurement) offers immense potential for businesses to reduce costs, shorten purchase cycles, and ensure vendor compliance. However, successful e.procurement process requires sound strategy and good technology to eliminate redundant, unnecessary steps. Without comprehensive solution, companies stand to incur notable risks.
The competitive market demands nimble purchasing process with speed and accuracy, and failure to develop reliable process using the latest technology can have dire consequences. Companies that do not enable their team with digitized end-to-end source-to-pay (S2P) platform will miss out on the cost-savings, risk exposure, and process uniformity that comes with automation.
From financial executive’s perspective, risk management should be key priority. E.procurement requires accurate and timely decisions, and without having visibility to the process, CFOs are at loss to understand why delays occur or budgeting is exceeded. S2P software integrates with existing systems and enables users to check references and receive quotes from vendors more quickly, reducing cycle times and helping executives make informed decisions more efficiently.
In addition to visibility into purchases, S2P platform also offers real-time insights into cost savings from reduced batch processing, negotiated discounts, and general process compliance among vendors. Having the tools to provide detailed analysis on purchases helps executives counter erroneous chargeback claims, budget discrepancies and fraudulent activities. good S2P platform offers the added security of session recording and review trails to ensure compliance with policies and procedures.
Companies that do not leverage digital capabilities to streamline the process of onboarding, managing and launching vendors stand to miss out on the improved efficiency offered by vend-approved system. Layered processes can cause delays when manual approval and negotiation is required, resulting in loss of market opportunities due to inability to complete transactions on time.
Moreover, the reliance on paper processes makes it difficult to identify and address flawed processes, resulting in further economic stagnation. Companies that rely on manual Purchasing Card (PCard) processes do not have access to spending analytics and visibility into approval processes, thus losing control and risking policy violation.
E.procurement without S2P platform significantly increases the frictional cost of longer processing cycles, non-compliant chargebacks, and budget discrepancies, leading to higher costs for data management, reconciliation, and reporting. Companies without good technology investments should consider the risks associated with paper-based processes before deciding to forgo the gains of comprehensive S2P platform.
