In PART-1, of the series we shared some insights about the basics of purchasing process in a business environment, including the facets it entails, and why it is amongst the most shunned areas in a supply chain. We started from scratch, and now we believe we are in a commanding stance to answer one big question that every business is striving to decode the answer to: what are the benefits of an organised purchasing process system with regard to business revenue?
The simple answer is that while purchasing in the strictest terms is about purchasing goods to meet business requirements, its impact on business outcomes can be substantial and easily extend beyond the purchasing department.
Here are some areas where purchasing can impact other areas of the business.
An optimized purchasing process helps in ameliorating the usage of time, money, and helps in maximizing the cash flow. Moreover, it results in a simple and much nimble access to a purchase order; in addition to entrusting the ability to enforce budgets, and making sure that accountability across your organisation is cue to a premier purchasing process.
Elimination of Malpractices:
Elimination of malpractices, or in layman’s term, fraud is a crucial challenge for any company. Even if we set aside external frauds, internal frauds demands for a strict mulling. Instances of internal fraud are high in the absence of an organized purchasing process. However, if an organisation invests considerable amount of time in outlining an organized purchasing process, which is subsumed and assured of an audit trail for every transaction made, will help in identifying the entities who are attempting to defraud the company, and deterring other who are involved in fraudulent behavior.
Better Budgetary Control:
This, again, is a challenge for businesses. Prior to making a purchase, it is important to be well aware if there are adequate funds to regard its payment. An organized purchasing process refines financial planning and management, which leads to improved pricing, better planning, and, of course, a higher perch over cash flow.
An organized purchase process entails a lot more than what meets the eye, and it surely provides a beneficial upshot when it comes to regulating business revenue. In our next iteration of the series, we’ll wrap up by disseminating particulars about how to chalk out an organized purchasing process.