How E-Procurement Solutions Help You To Cut Your Costs?

The concept of ’e-procurement’ originated from the term automated procurement and is a great way to save costs and time in organisations. E-Procurement is how the buyers and sellers connect electronically via the Internet through information networks.

An e-procurement software drives flexibility for the procurement managers to meet their policy requirements, grow and scale. This article will give an outlook on how these solutions can help you cut down costs in the long run. Now, let’s learn what e-procurement solutions are and how they benefit an organisation.

What are e-Procurement Solutions?

eProcurement or electronic procurement is a business-to-business (B2B) mechanism of carrying out business transactions such as buying, selling, and acquiring goods and services over the internet. It creates digital communication between buyers and suppliers and supports the processes of ordering, requisitioning, and exchange of purchased documents in the B2B world.

E-Procurement Benefits for Businesses

The e-procurement process offers several benefits for businesses. When executed properly, it helps organisations to:

• Fuel supplier relationships and originate innovation in the offerings
• Get discounts by combining orders and making purchases in volume
• Making strategic business decisions for the company
• Negotiate contracts with suppliers
• Optimise spending while decreasing original purchases
• Protects against risks and disruption in supply chain
• Save costs and improve reliability by consolidating the supply base

We have learned what e-procurement solutions are. Now, let us analyse how e-procurement helps organisations cut down costs.

How e-Procurement Solutions Help You Cut Costs?

For companies facing financial challenges and pulling in revenue, e-procurement solutions can help cut these costs in the following ways:

1. Controlling Purchases

   Implementing purchasing controls, such as reviewing all the purchases over a certain amount, can hold off large purchases. By getting visibility into the purchase requests, you can plan your purchases. It also helps you analyse the spending model, and thus you can figure out the areas where cost-cutting is possible.

2. Hiring Freelancers

Hiring freelancers or contractors can save costs tremendously. A full-time employee can be a better way for comprehensive support, but onboarding freelancers or contract staff can help you leverage the flexibility at relatively low costs. Freelancers are proven to be professionals favourable for businesses looking for specialised procurement support. There are various online platforms for connecting with freelancers.

3. Making Budgets

Making a budget is of utmost necessity for running organisations and is a sign of an excellent e-procurement system. Budget calculations can be done by hand or by spreadsheets using legacy systems. Modern e-procurement systems automate all these and make the authorised users know the budget available and the potential spend before incurring. Best systems alert budget approvers of overbudgeting to ensure they are accounted for properly. An additional benefit that the modern e-procurement system offers is allowing budgets at the project level, making your budgeting needs flexible.

4. Making Bulk Purchases

   With a budget in hand, you can help businesses offload inventory or streamline their operations by making bulk purchases. Certain office supplies or making more extended period service contracts can help you cut costs in the long run.

5. Making Payments in Advance

Advance payments for the products and services can support the vendors facing cash flow related issues. It also helps you foster relationships with vendors.

6. Outsourcing Functions

   Outsourcing certain tasks to other companies can save enormous costs for the organisations. It can free the resources internally but can be cheaper than hiring permanent staff by leveraging the expertise of outsourcing partners’ expertise to save more costs.

7. Removing Duplicate Purchases

   Purchases can be tracked and approved before finalising and maintaining visibility across purchasing using e-procurement software. Investing in remote work communication tools helps avoid these issues before the initial purchasing stage.

8. Reevaluating Office Space Costs

Using a remote working model in your company, you can save money by moving into a smaller space. You can also cut costs in your utility bills in running electricity, air conditioning, or unnecessary heating.

Conclusion

Using the above methods, modern and efficient technologies such as e-procurement platforms can help you craft strategies to cut costs. It gives you more control and visibility into your spending to position your company better for inevitable success.

One of such e-procurement solutions is Procol which you can always rely on for getting more flexibility, user-friendliness, cost-efficacy, and enterprise-grade security.