It’s a common question – are you getting enough value out of your software? That’s a tough question to answer, and it’s highly dependent on how you determine that value. The question is especially pertinent when you’re evaluating eProcurement software. Is this new application going to help my business succeed, or keep it planted firmly in the past? A great way to determine that is by previewing not only the functions it can perform, but the quality of data you can get out of it.
For example, a good eProcurement software suite can tell you how much money you spent on paper last quarter. A better one can help you find ways to cut costs and spend less on paper next quarter, too. So how about it? Is your eProcurement application providing enough reporting value for your organization? Is it helping you save money?
Here are three examples of reports that any good eProcurement package should have that can help you succeed in your business.
Budget to Actual
All organizations need an ironclad budget. Without it, you’re operating in the blind. But if you’re still using tools like Excel to manage your budgets, you’re leaving your organization exposed to risk. Spreadsheets are great, but they’re not real-time and they’re hard to check, increasing the chance of having major expenses get through approval that weren’t on the budget.
A good eProcurement software suite will have real-time budget reports available. These reports will show up to the minute results for where all your money is at any given time, so your approvers can make informed decisions on their future purchases. Best in class software will even warn users before an account goes over budget, or provide options to halt any purchase requests that will send you over. Combine that with flexible budget reporting options that allow you to break down budgets by GL Account, Project, Department, or even User, and you’ve got a solid reporting platform that will keep you on track.
Spend by Supplier
In many companies, indirect spend can equal out to as much as 22%, or nearly a quarter of your sales revenue. That’s a lot of money going out the door. Often, this spend category is spread across hundreds or even thousands of different suppliers, making it difficult to accurately track.
Not to mention the hassle involved in managing all of those vendor relationships. The first step is to track where all that money is going. A good eProcurement system will let you do this by showing you a report of your spend sorted by suppliers. A better one will even highlight those suppliers you spend the most money with, and even filter the data down by other categories like expense categories to give you a truly holistic snapshot of your spend.
How will this help you save money? There are two primary ways. First, if you’re spending a lot of money with a few vendors, you can use that data to negotiate discounts or more favorable payment terms with them. Even a discount of 3% on indirect spend could save your organization thousands of dollars a year. Two, you can work to consolidate spend from the lower-end suppliers onto those higher value ones, which will reduce your procurement team’s workload, saving time and making it easier to scale your operations upward.
Leveraging Payment Terms
Everyone knows you should pay your bills on time, but did you know that’s only a part of the larger puzzle? Avoiding late fees is great, but to maximize working capital and strategic savings, knowing when the best time to pay your bills is key.
A great eProcurement system has reports that will help you keep track of your invoices and payment terms to make sure you’re paying your bills when you need to and not a day before. That way you can keep more of your own cash in your own pockets, and spend it on ways to grow your business.
You can also explore payment terms as a way to save. If you can pay early, work with your supplier to secure early payment discounts. Take 2/10 net 30 for instance. In this example you can stand to save 2% if you pay within 10 days of the invoice date.
Whichever direction you choose, having access to real-time data can help you make the right decision for your organization. Managing working capital, maximizing savings or a combination of both would be nearly impossible without the right tools assisting you.
These are just three ways reporting and good data can help accelerate your business. Best in class eProcurement software suites contain dozens of customizable reports that will help your business maximize every dollar you spend. Are you ready to get started? Contact us here.