Role of Technology in Ensuring Procurement Compliance

Making sure your procurement processes are followed properly is a vital part of ensuring the success of your procurement strategy. However, it can be difficult to manage procurement compliance on a day-to-day basis without technology. 

In this article, we will explore everything regarding procurement compliance, from its importance to the role of technology in successful compliance management. So, if you are ready, let’s start! 

What is Procurement Compliance? 

The procurement process must have an established set of rules and procedures to ensure smooth management. The people responsible for ensuring and regulating the procurement process are the ones responsible for procurement compliance with the established set of rules. 

So, essentially, procurement compliance involves monitoring procurement processes, running audits regularly, and ensuring the established policies are thoroughly followed. 

Why is Procurement Compliance Important? 

Procurement compliance is important for several reasons. First of all, it helps to save resources and ensure the accuracy of the set processes. Without ensuring compliance, there is an increased risk of fraud or errors, leading to financial losses and damaging supplier relationships. 

Another reason why procurement compliance is vital is that it contributes to higher ROI rates. When the policies and regulations regarding procurement processes are thoroughly followed, it helps to efficiently achieve business objectives, leading to higher returns on investment. 

How to Track Procurement Compliance? 

In order to track procurement compliance, you need to track areas such as contract, spend, process, time, and audit completion rate. Well, let’s take a look at some of these in more detail. 

Contract Compliance 

For instance, by tracking contact compliance, you can ensure that the suppliers follow the terms and conditions of the contracts. This will help you to mitigate risks associated with supply chain disruptions and choose the best vendors for long-term collaboration. Also, tracking vendor compliance will help you to identify the rate of vendors that are not meeting procurement requirements.  

Time Compliance 

Another vital aspect to track is the average time it takes for procurement processes to be completed. This will help you understand what aspects take too much time and manual effort to optimize for the future. 

Process Compliance 

Tracking process compliance allows you to understand how well your team follows the procedures established for procurement within your organization. This is especially important when it comes to purchase order processes. 

Spend Compliance 

Do not forget to track spending compliance. This is one of the key metrics in the procurement process tracking, which will help you ensure that the set budget goals and anticipated costs are met.

The Role of Technology in Procurement Compliance 

One of the most important roles of technology in the procurement process is that it allows to ensure policy compliance at all times in all aspects of procurement. It happens due to increased efficiency, multi-level control, and higher transparency of procurement processes. 

So, let’s briefly overview how technology enhances the procurement process to ensure compliance with the required policies. 

Enhancing Efficiency 

Technology plays a crucial role in today’s business environment, especially when it comes to enhancing the efficiency of business processes. Unlike manual procurement, technology allows the optimization of various processes and improves multi-level management. 

For instance, a good procurement platform allows for assigning different user roles and permissions. Also, you can create and automate approval workflows to reduce manual processes. All of the above-mentioned contribute to better management both in terms of time and cost savings. 

Improved Accuracy 

In manual procurement, there are many risks associated with human errors, while technology reduces them with potent process automation. 

Time Savings 

Process automation not only improves accuracy but also saves time. This allows for better resource allocation and gives your team more time to focus on other important tasks. 

With the right software solution, you can further track and optimize time spent on procurement and ensure that it is compliant with the set goals and regulations. 

Enhanced Transparency 

Procurement software enhances transparency. The documents in the workflows, POs, invoices, and everything else necessary to ensure process compliance are visible and accessible. 

Improved Data Management 

In paper-based procurement, there is a higher risk of losing important information and data. Technology and high-quality procurement software will allow data to be stored in a safe database. This also makes accessing the data at any given point in time much easier. 

Greater Spend Control 

Technology plays a key role when it comes to business spend control. A powerful procurement software solution will give you insightful analytics and an overview of business spend. This will allow you to ensure compliance with the set budgets and make necessary adjustments for cost savings. 

Manage Supplier Relationships 

In procurement, it is essential to manage quality supplier relationships. Oftentimes, in manual procurement, some data might get lost, invoices can be overdue, and trust between the organization and vendors can be damaged. Technology is critical in optimizing supplier relationship management, firstly due to tools that allow efficiency improvement and timely payments, and secondly due to a set of tools for real-time supplier collaboration. 

Implement Risk Mitigation Strategies 

Implementing risk mitigation strategies is vital to lower potential risks associated with procurement. Using the right platform for managing procurement results in higher transparency and better data access, allowing you to create efficient risk mitigation strategies and quickly recover in case of emergency.

How to Choose a Good Procurement Software?  

When choosing a software solution to optimize the procurement process and make sure it is compliant with all the requirements, it is vital to pay attention to a few key aspects and criteria. 

So, let’s briefly overview the must-have features and criteria of good procurement software. 

Cloud-Based Solution 

First of all, make sure that the software of your choice is cloud-based. Cloud-based solutions are scalable and fast, which allows the system to handle loads of data without breaking. This is quite important, especially for larger corporations dealing with multiple suppliers and documents. Even if you are a small business owner, your business will grow over time. So, it is better to invest in a quality solution upfront. 

User Interface 

Make sure the software solution of your choice also comes in handy with a good user interface. One of the main benefits of technology is that it contributes to time savings. Well, this won’t happen if the user interface is complicated. 

Consider the fact that you will need to onboard employees responsible for procurement. If they spend too much time learning how to navigate the software, it will result in multiple inefficiencies and even errors. 

To avoid negative consequences, choose procurement software with a good user interface, such as Tradogram. 

Mobile Accessibility 

In certain instances, you may need to quickly access a document or other data from your procurement database. It will be impossible if you do not have your laptop around with certain procurement platforms, which causes only more inconvenience. 

Thus, when choosing procurement software, make sure that it has a responsive mobile interface or app. Mobile accessibility will allow you to manage procurement on the go and always have access to necessary documents to take timely actions. 

Integrations with Accounting Systems 

Another vital criterion to look out for is integration with other accounting systems. Thus, before investing, ensure it integrates with your core account/ERP systems (such as QuickBooks or NetSuite). 

Customized Approval Workflows

On the technical side of the question, make sure the procurement software of your choice comes in handy with workflow automation and customization features. 

Customizable approval workflows come in handy with a variety of benefits, including 

• Allowing managers to authorize and validate each order.  
• Safeguarding against unauthorized purchases and unexpected spending. 
• Allowing to customize the approval workflows to meet business needs. 

Also, customizable approval workflows can be automated to ensure faster procurement processes. 

Vendor Management Tools 

As talked about earlier, vendor relationship management is one of the key aspects that determine the success of business procurement processes. To ensure contract compliance and smooth collaboration with the suppliers, look out for solutions that offer supplier management functionality. 

Vendor management tools will allow you to: 

• Efficiently collaborate with suppliers in real-time 
• Create a personalized database of approved suppliers for long-term collaboration and smooth supply chain management 
• Use performance metrics to identify top-performing suppliers as well as worst-performing suppliers
• Monitor the performance history of each supplier to ensure compliance with the contract requirements. 

All these features and criteria are important when choosing a technology to optimize your procurement process. These tools and features will allow your procurement team to efficiently manage processes and make sure everything is compliant with the set policies and regulations. 

Best Procurement Tool to Ensure Compliance 

If you are looking for the best tool to ensure procurement compliance, then you are in the right place. 

Tradogram is an all-in-one procurement software that will help you to optimize procurement management processes. It is a cloud-based solution that will allow you to gain features such as spend visibility, robust analytics, good UI, customizable workflows, and automation tools. 

Tradogram offers all the necessary functionality to ensure procurement compliance and accuracy, increasing the efficiency of procurement processes.