Procurement software for small business delivers a robust set of features and capabilities tailored for small businesses and startups, facilitating the procurement process of both goods and services.
Contemporary or modern procurement software is a digital solution designed to support the acquisition or purchasing process of goods and services for businesses of all sizes. It gives managers as well as regular employees the ability to create and submit purchase requests from any location at any time, using any internet-enabled device. The procurement process typically involves the approval and issuance of purchase orders, which serve as a form of control and structure. With a cloud-based purchase or procurement software, employees are given the tools and the capability to instantly create a purchase order with relative ease. They can do this whether they’re at a satellite office on the other side of the world, out on the field or at their desk in the main office.
Procurement solutions, also known as purchasing software, are mainly designed to automate and centralize the core processes of acquiring raw materials, products and/or services, as well as replenishing inventory. However, not all procurement software solutions are created equal. Some have expanded their scope of capabilities and functionalities to empower businesses and organizations, allowing them to effectively manage every single aspect of the purchase requisition process using a single unified platform. However, there are purchasing software for small businesses and startups, which typically has most of the basic functions and tools. The key difference is that these software products are designed to facilitate procurement processes at a much smaller scale.
The main role of any procurement software is to manage the supply chain tasks and activities that are normally associated with purchasing, product sourcing, invoicing, inventory management, as well as supplier and vendor management. These functions are also present in procurement software for small business, although their capabilities might be somewhat limited since they are mainly tailored to serve smaller companies and startups with basic requirements.
However, there are software vendors and service providers that do cater to all types of businesses, regardless of their size, through tier-based subscription plans where the lowest-tier are often geared towards small businesses, the mid-tier for midmarket companies and the highest-tier plans are reserved for large businesses and enterprises. This is a common practice among today’s software vendors and service providers.
Although procurement software is available in many different forms, there are a few core features and tools that are often present in almost all of them, whether they’re designed for small businesses or large-scale companies, standalone products, best-of-breed or fully integrated into a comprehensive procurement management suite. Many software vendors and providers offer a gamut of basic functionalities, although they might be in various levels in terms of scale, proficiency and maturity. There are others that focus on offering a subset of the same core features and capabilities.
One of the more common features that small businesses and startups will typically find in procurement software for small business is the purchase order approval and delivery function. This may come in a variety of names, depending on the software product and vendor. Its core function involves managing the purchase order approval workflow as well as the delivery process. This function works by storing all relevant purchasing data in a single location, one that is secure yet relatively easy to access by authorized employees. This makes order tracking and real-time visibility of purchase orders that much easier and more efficient.
Once the purchase request has been approved, the system ensures that the purchase order is immediately accessible. The function also helps make sure key personnel who are tasked with the inspection and approval of purchase orders will have easy access to the information they need, from any location at any time, using any device. Then there’s the delivery aspect, the second half of the purchase requisition process. The feature helps ensure that the orders are delivered to the right recipients using their preferred modes of transport.
Another key function of procurement software for small business, midmarket users and large enterprises is the automated billing feature. Through automated billing processes, users can easily and quickly match invoices to their individual purchase orders, resulting in the automatic resolution of the payments standard. By automating most of the core tasks associated with billing, some of the common problems, misunderstandings and miscommunications during this process can be completely avoided so the billing and invoicing can go on as smoothly as possible.
Most of the fully integrated procurement software solutions that are designed for larger enterprises often have an automated billing solution built into the platform, which includes all stages of the procure-to-pay process. Procure-to-pay or p2p is the process of incorporating all purchasing and accounts payable solutions in order to greatly reduce inefficiencies. For small business procurement solutions, on the other hand, not all of them will come with this particular feature. However, there are systems for smaller operations that offer seamless integration, allowing users to integrate the procurement software with their existing electronic billing application.
Contract management is a fundamental feature of procurement software for small business as well as larger operations. This is an especially useful function in situations where an award decision comes through and contract agreements have to be scrutinized, reviewed and signed by all involved parties. It is an important feature that is present in best-of-breed procurement management platforms as well as small business purchasing solutions. Some contract management functionalities can include electronic signature and redlining, a process where legal revisions and tracking are often involved.
However, procurement management software designed for small businesses and startups that offer this kind of feature may only include basic functionality, such as a simple storage facility for contract terms, language and expiration; i.e., it may only serve as a centralized storage to help manage and enforce the terms of the agreement throughout its duration.
Catalog buying is considered to be one of core functions of procurement software for small business, since this is the main touchpoint for most businesses and organizations, regardless of size and scale. Good procurement solutions, whether it’s tailored for smaller operations or larger enterprises, have the capability to specify suppliers and vendors for the purchase requisition that other departments and individuals in the organization will make.
In certain situations, it’s the suppliers themselves that will provide the whole purchase catalog, utilizing their own detailed product or service information. It will often reflect the item specifications as well as the price points and mode of payment, which is typically covered in the contract agreement with the organization.
One of the biggest benefits of implementing the right procurement software for small business is the fact that it can effectively serve as a single source of truth for your purchase requisition process. There’s no denying that these types of solutions are specifically designed to serve that purpose, ensuring there are no inconsistencies or discrepancies in the information needed throughout the entire procurement lifecycle. Instead of relying on dispersed modules and data sources, users can depend on a single source of truth for all purchasing and sourcing information.
Effective workflow standardization and better supplier management are two key advantages that procurement solutions can provide their users, whether the latter run a small or large operation. Workflow standardization, for instance, enables a truly uniform procurement process that allows users to add more control and flexibility into their workflows. This helps in ensuring a more efficient and smoother task flow, maintaining accuracy and providing more accountability for key transactions that require specialized handling and management.
When it comes to supplier management, procurement software for small business allows for stronger supplier relationships by offering tools that ensure better communication and collaboration between the business and their suppliers. The software also provides the necessary functions for measuring and communicating key performance indicators or KPIs. Along with strong supplier relationships, these capabilities are vital components in a developing procurement operation.
Procurement solutions also play a significant role in improving inventory control. Having accurate and up-to-date inventory information, as well as consistent demand preparation are all crucial factors to a smoother and more efficient procurement process. Incorporating a procurement management system into your current technology stack can help eliminate the need for paper-based inventory management or get rid of dated inventory management tools that only slow the entire process down. With proper procurement software, you can leverage automation to manage your inventory and provide real-time data on your stock levels.
Procurement software for small business might be limited in certain aspects, feature-wise. However, if you’re only looking for a simple solution that can facilitate basic purchase requisition processes, then this type of software should be more than enough to meet your requirements. Procurement solutions can give you the ability to automate some of the core processes typically associated with acquiring raw materials, products and/or services, as well as managing your inventory.
With procurement or purchasing software, your employees can easily raise purchase requests while you can approve purchase orders, choose the right supplier and place orders instantly in an efficient manner, regardless of time or location, using any device. You can also match invoices to the orders, settle payments electronically and streamline your cash flow within this single, unified platform.