Quick and Painless Ways to Solve 5 Common Purchasing Problems
Is your company struggling with purchasing problems? Dealing with accidental orders, unclear policies, exceeding the budget, inventory issues, and inflexible or unreliable suppliers are not uncommon. But you don’t have to keep putting up with these issues in your company.
Purchasing problems don’t always have an easy-fix solution. However, a high-quality purchasing and procurement software program can give you a way to resolve these problems as quickly and painlessly as possible. Whether you’re a new business setting up a purchasing system for the first time or an established company looking to improve the purchasing process, business process automation software is a great solution.
In this article, we’ll look at five common purchasing problems. For each problem, there’s a solution to implement immediately. We also offer tips for how to prevent problems in the future using process automation software.
1) Accidental Orders
Problem: You or someone in your company placed the wrong order by accident. In many cases, this means you either you ordered the wrong item, or the wrong quantity, or accidentally placed two orders.
Solution: Contact the supplier immediately to see if you can cancel or change the order. If you have a good relationship with the supplier and catch the mistake promptly, they should be willing to work with you.
Prevention: Add safeguards to prevent this from happening in the future. Requiring approval from more than one person ensures that you’re double-checking each order for errors. In addition, your purchasing software system should track orders and alert you if a similar order has already been placed to prevent accidental duplicate purchases.
2) Going Over Budget
Problem: The procurement transactions within your company exceed the spending budget.
Solution: While reckless spending can certainly cause this problem, there’s also a good chance that miscommunication and/or lack of coordination is the real culprit. Immediately take steps to correct communication issues within your company and coordinate information between all departments involved in purchasing.
Prevention: Regular budgetary updates can be a big help in correcting this common purchasing problem. Clear-up lines of communication and make sure everyone in the supply chain is on the same page. At the same time, you can use procurement software to implement better controls governing purchases. This also helps curtail problems such as maverick spending.
3) Policy Problems
Problem: Your company’s procurement policy is outdated, unclear, or non-existent. This leads to a host of other purchasing problems, such as employees shopping outside your purchasing system or everyone using different methods to report purchases.
Solution: Take steps to clearly define procurement problems and needs, then collaborate with people involved in all steps of purchasing to update and/or create a company policy. While developing a solution, remember to accept feedback and stay open to discussion.
Prevention: Continue to review company policy and purchasing standards regularly to keep them up-to-date with your current needs. Also, make sure you’re clearly communicating purchasing policy to everyone involved. You can also program purchasing software to automatically enforce company policy. This software usually comes with features like a punch-out catalog that make it easier for employees to make policy-compliant purchases from within the purchasing system.
4) Inventory Issues
Problem: You’re having problems keeping track of inventory. These problems can include overstocking inventory, not catching damaged goods soon enough to report the problem to suppliers, or running out of needed items.
Solution: Implement a receiving system that uses 3-way matching. That will help ensure your company is checking goods immediately upon receipt and keeps better track of items currently on-hand.
Prevention: Establishing a comprehensive procurement system helps prevent inventory issues from becoming a problem. It’s good to have this system in place as early as possible since it lets you make purchases quickly. Plus it also supplies the information needed for thoughtful decision making. This is especially important for new or expanding companies, which are more at-risk for going over-budget in inventory before having the revenue to back-up those purchases.
5) Inflexible or Unreliable Suppliers
Problem: Your suppliers refuse to work with you, resist your attempts to negotiate, or fail to provide needed information. Some may be unreliable in delivering orders on-time or in the agreed upon condition.
Solution: If you’ve never attempted to negotiate with suppliers before, start by opening a dialog. Many are willing to work with you if you’ve been a good customer in the past. If they’re not, then it might be time to look for a new supplier.
Prevention.: For suppliers that you plan to maintain a long-standing relationship with, ask if they’ll negotiate deals on repeat and/or bulk orders. Remember to be professional about your request instead of badgering. See if you can offer the suppliers perks as well, such as early-payment. Also, remember to keep communication open with your suppliers. If you maintain good relationships with suppliers there’s a good chance you’ll find them an excellent resource for learning about new products and getting the best deals.
Solving common problems in your procurement department won’t happen instantly. But with the help of reliable software like NextProcess’ Purchase Order Module you can implement solutions that are as quick and painless as possible. Plus, these solutions aren’t just temporary. You’ll be able to improve your entire purchasing system quickly and implement lasting changes that will benefit your company now and in the future.
If you’d like to see how much this type of purchasing solution could help your company, simply contact us and schedule a free demo. We’ll give you a no-strings-attached demonstration of how our software will work for your company. And if you do decide to go with NextProcess for your purchasing needs, we’ll be there with you through every step of the implementation process. We make sure our software works perfectly for you and delivers exactly what you need.