There are many ways to manage spend and streamline procurement and expensing. The right expense management software tool can greatly improve the efficiency of your internal process while helping the organization save money and reduce waste.
Ramp is one such tool for managing spend of all kinds. It has a solid reputation amongst small and medium businesses looking to create more efficient purchasing and expensing. But is it the best option for your business? Only research can answer that question.
To help users confidently decide on a solution, we’ve compiled helpful information about Ramp and some of its closest competitors. Read on to learn what Ramp is and its main features, strengths, and challenges. We’ve also compiled the pros and cons of other top tools.
Download The Free Ebook: 5 Ways Your Purchasing Process Is Leaking Cash (and How to Fix It)
What does Ramp do?
Ramp is a SaaS accounting and expense management tool. It offers a suite of finance and AP automation features that help small and mid-sized businesses streamline and digitize their accounting and expense management. The cloud-based management platform is designed to provide all-in-one solutions for finance teams wanting to digitize and automate their operations.
Ramp offers features for end-to-end spend management strategy, including:
- Global corporate card services
- Expense management
- Centralized procurement
- Accounting automation
- AI-enhanced reconciliation
Ramp pros & cons
Ramp offers a strong mix of features for small to medium-sized companies, earning it high ratings on sites like Capterra and G2. However, buyers should be aware of some drawbacks to the platform when evaluating their options.
Pros
- Ramp offers cash back on purchases and benefits for using partner brands.
- The platform allows users to email or text receipts for easy reconciliation and expense reporting.
- The mobile version offers app-enabled spend approvals and expense reporting features.
- Virtual credit cards give finance leaders the ability to enable employee self-service spending.
Cons
- Virtual card reserves are tied to cash flow in bank accounts, which can present purchases unexpectedly.
- Some users have described difficulty adding virtual cards to Apple Pay, which can prevent authorized purchases in the field.
- The development roadmap is slow to add user-requested features.
10 Features to look for in spend management software
Spend management is a fast-growing segment of the SaaS business, with over 10 percent growth projected from 2022 to 2030. That means a lot more options and data to sift through. Finding a spend under management solution with the right blend of features and capabilities is essential to meet your company’s current and future needs.
When researching options, look for tools that have each of the following 10 key features:
- Centralized spend controls: Accurate expense control relies on teams being able to order, track, reconcile, and analyze spend from wherever they are. Look for a solution that brings data on providers and transactions. This allows for real-time visibility into spending and the ability to set limits and controls.
- User-friendly interface: Many stakeholders interact with spend management software, so an appropriate solution must be easy to learn. Look for spend management and accounting software with an intuitive interface for fast adoption with minimal training. A strong, well-organized, customizable platform makes onboarding easier for employees.
5 Ways Your Purchasing Process Is Leaking Cash (and How to Fix It)
Download the ebook to learn how a comprehensive, software-driven purchasing platform can plug the holes and turn your P2P process into a strategic advantage.
- Integrations: AP management doesn’t happen in isolation. Look for a system that integrates seamlessly with existing accounting or enterprise resource planning (ERP) systems. This creates data consistency and workflow efficiency for finance and other teams.
- Spend guidance: Spend management tools help leaders maintain budgetary control while enabling self-service purchasing. Look for a platform that automatically enables spending guidance and limits, reducing manual management and preventing out-of-policy spending.
- Reporting tools: Real-time reports are essential for managing spend. The right tool allows companies to make informed decisions based on up-to-date data. Real-time reports keep budgets on track, enable proper resource allocation, empower better negotiations, and provide insights for improved decisions.
- Mobile access: Given the increasing trend of remote work, mobile access to spend management has become more important than ever. This feature allows employees to conduct procurement activities, track expenses, or approve purchasing requests from anywhere.
- Customizable workflows: Every business has unique needs and processes. Spend management software should offer customizable approval workflows to fit the company's unique processes and hierarchy. Customizable features also allow the platform to evolve with the company as it grows and changes.
- Security: Given the sensitive nature of financial data, robust security measures are table stakes in choosing spend management software. Encryption, two-factor authentication, and regular audits are some features to look for.
- Vendor management: Managing vendor information within a central platform simplifies processes and improves relationships. Look for a tool that lets users easily review supplier information and conduct vendor-specific analysis.
- Scalability: As a business grows, so should its spend management solution. Look for a software option that scales with company needs without compromising performance or functionality.
5 best Ramp alternatives of 2024
We’ve reviewed some of the most advanced and user-friendly alternatives to Ramp to consider when selecting a spend management solution. Read on to learn more about each.
1. Order.co
Order.co offers companies of every size access to tools to track spending, improve budgetary control, and optimize procurement and spend management processes. The platform enables every buyer in the organization to initiate purchases with preferred vendors through a curated catalog.
Pros
- Order.co takes a vendor-agnostic approach to purchasing, allowing buyers to integrate any supplier into the platform.
- Curated catalogs make it easier for buyers to find their favorite suppliers and reorder common supplies easily.
- This is one of the only platforms to offer financing for procurement with up to $500k for flexible cash flow.
Cons
- Order.co doesn’t work for RFP or bid processes.
- Software subscriptions can't be purchased directly within the platform, but users can manage, report on, and pay for software spend.
2. Bill Spend & Expense (Formerly Divvy)
This spend management tool creates easy expense reporting, management, budgeting, and reimbursements. The platform features a free tier and virtual card options to help buyers complete purchases and track expenditures.
Pros
- The platform integrates with accounting tools, including Quickbooks, to centralize spend data efficiently.
- Users have access to phone-based customer service for questions and issue resolution.
- The easy-to-use platform makes adoption easy for even casual users.
Cons
- Users report issues with the ACH and bill pay process, resulting in declined vendor bill payments.
- Physical cards often have an extended delivery timeline, which can slow down replacements or new employee onboarding.
5 Ways Your Purchasing Process is Leaking Cash (and How to Fix It)
Download the ebook to learn how a comprehensive, software-driven purchasing platform can plug the holes and turn your P2P process into a strategic advantage.
"*" indicates required fields
3. Brex
Brex offers web-based and mobile-ready billing, expense, procurement, and payment management. It caters to small and medium businesses and enterprises seeking streamlined processes for managing spend and controlling expenses.
Pros
- Brex offers partnerships with other relevant brands, such as TravelBank and Lift, to provide rewards and benefits for using preferred partners.
- The platform allows users to upload receipts and documentation via the web or text, making it easier to report expenses.
- It offers user-friendly interfaces to help employees get up to speed with the mobile app quickly.
Cons
- Funding depends on available account cash, which can cause variability when many users rely on the same funding source.
- Some reports that the funds available calculations aren’t transparent and make it hard to predict available funds.
- Dispute resolution procedures are more stringent than other card issuers, making these processes more time-consuming and intensive.
4. Airbase
Airbase spend management and accounts payable automation offers mid-market companies centralized tools for budgeting, expense tracking, and spend optimization. It makes spend visibility easier through real-time insights into financial data.
Pros
- Customer support is reportedly friendly and efficient when addressing concerns or walking users through issues.
- The app is intuitive and intelligent, making it easy to manage expenses and streamline the reporting process.
- It integrates with popular mid-market tools like Quickbooks for automated reporting and easier month-end closing.
Cons
- Despite other popular integrations, the system doesn’t integrate with the widely used expense automation app TripActions.
- Prepurchase requests with the virtual card may be confusing and require some individualized training.
- Some users feel that more reconciliation tools for certain categories (prepaid accounts and amortizations) would improve month-end activities.
For a more in-depth look at Airbase, check out our full comparison.
5. Xero
This business accounting tool is built for the needs of small businesses as an alternative to other options like Quickbooks. It offers quick, secure access from any device and enables common processes like cash flow management, payments, expense tracking, and inventory management,
Pros
- Xero’s app helps users track invoices and estimate profits on the go.
- The platform makes it easy to submit expenses and check reimbursements.
- Xero is structured so external stakeholders such as accountants and lawyers can access the app to support internal processes.
Cons
- The platform only offers payroll through an integration with Gusto.
- Deleting or removing incorrect transactions is a difficult manual process.
- The company offers no phone-based customer support, which can make it challenging to resolve some issues.
Streamline procure-to-pay with Order.co
Order.co offers the strongest, all-in-one procurement and accounting automation solution available. It gives users of all stages and company sizes access to AP process automation, AI enhancements, spend management, invoice reconciliation, approval automation, and innovative financing options. Order.co enables compliant purchasing for every employee, helps companies save money, streamlines procurement processes, and enhances spend analyses.
To learn more about sealing up the gaps in your spend management process, check out our free ebook 5 Ways Your Purchasing Process Is Leaking Cash (and How to Fix It).
Get started
Schedule a demo to see how Order.co can simplify buying for your business.
"*" indicates required fields
A spend management solution helps businesses track and manage spending, budgeting, and procurement activities. It enables organizations to monitor and control spending, identify potential savings, and improve cost efficiency. It can also help businesses keep tabs on spending transactions, detect and prevent fraud, and comply with regulatory requirements.
Choosing the right spend management platform greatly improves the outcomes of your accounting and finance functions, and many options are available. Airbase is one such tool for the mid-market. It offers many advanced features, but how does it stack up in an apples-to-apples comparison against Order.co?
This article provides a balanced overview of the similarities and differences between Airbase and Order.co. Read on to learn more about these spend management tools.
Download the free ebook: The Procurement Strategy Playbook
An Overview of Airbase
Airbase is a spend management and accounts payable automation platform that creates centralized tools for budgeting, tracking expenses, optimizing spend, and improving financial visibility. It provides real-time insights into financial data and enables users to make more informed spending decisions. Airbase includes automated workflows to streamline processes and increase efficiency.
Who is Airbase for?
Like Order.co, Airbase was designed for the mid-market, with scalable features tailored to companies of 200 to 5000 employees. For small businesses with under 200 team members that are just getting into accounts payable process automation, it may offer too many advanced features. Airbase was built to provide a comprehensive view of all spending across organizations. It allows companies to take control of their costs and identify new opportunities for savings.
Order.co: The top Airbase alternative as rated by Capterra
Airbase and Order.co offer a valuable range of features for mid-market companies, with room to scale as companies grow and evolve. To answer some of the most important questions buyers face when evaluating these two spend management options, we’ve compared their respective features and functionality across several key categories.
Onboarding and implementation
Airbase implementation and onboarding times depend on the complexity of business needs and integrations. Airbase reports that implementation takes about 1 to 2 months for most mid-market customers. This process can take 2 to 3 months for enterprise customers, depending on the internal resources available for implementation.
Information from Airbase’s blog breaks down their implementation process into five steps:
- Outline goals: Based on business goals (for instance, bill pay, guided procurement, etc.), the Airbase team creates a custom onboarding plan that integrates relevant teams.
- Identify controls: If the business doesn’t already have a spend approval plan, the implementation team will have it draft a plan for custom workflows.
- Onboard vendors: New customers must collate data from all current corporate credit cards and other vendor payment forms. This work must be done in advance of implementation. The company also recommends making a list of vendors that accept card payments.
- Set up Airbase: The company calls this a “KYC” or “Know Your Customer” process. It identifies the client’s identity when opening accounts. During this process, the Airbase team also sets up banking connections for money funded through Airbase and performs general ledger (GL) integration. For QuickBooks accounting software customers, Airbase offers direct integration to fetch charts of accounts. Airbase provides detailed instructions to sync GL data if the business isn’t on QB. On-call guidance is available, but the customer drives the GL sync process.
- Customize: With data in place and GL migration completed, users can customize and configure their Airbase and begin to learn the system. More information on Airbase’s training materials is available below.
Order.co offers a significantly more streamlined and intuitive setup process courtesy of the implementation team.
In general, onboarding and implementation take approximately 2 weeks to 2 months, depending on the number of vendors in the organization’s catalog, fulfillment preferences for those vendors, payment processing needs, and integrations. The fastest implementation projects enable customers to begin placing orders in as little as 10 days.
Every Order.co customer has access to a dedicated implementation consultant, account manager, and catalog specialist who guides new clients through onboarding and implements catalog curation. Order.co uses a project management system and weekly check-ins to maintain momentum through the onboarding process. Implementation consultants are available whenever needed. To learn about Order.co implementation with a real-world example, check out this case study on Lucy Therapeutics.
Training
Once the system is up and running, users must learn the ropes to use the platform. The right training materials make this process much easier for everyone.
Airbase offers users a help center for self-serve training on various platform facets. Users can find “Get Started Guides” in the website's resources section for admin functions, team managers, billing and business owners, etc. Users can also access a prerecorded webinar that instructs on Airbase's major functions and features. The company offers customer service and support through email and chat.
Order.co offers many training resources through its implementation consultant team. Order.co also features monthly product trainings, offers clients an in-depth help center, and provides a dedicated product training manager. Order.co’s help center contains broad and deep informational resources that guide users through procurement and payment workflows. For customers with large user bases, Order.co also offers personalized group training.
Procurement
Both Airbase and Order.co offer guided procurement features to help stakeholders request and purchase goods.
Airbase allows users to create a guided procurement experience with compliance enforcement and vendor management workflows. It accomplishes this through a vendor questionnaire that gives relevant approvers the information needed to greenlight the purchase request for approval. This functionality is available through the desktop and mobile apps for both iOS and Android devices.
Order.co also creates guided procurement with dynamic spend controls, approval workflows, and more. The platform offers customers one of the only vendor-agnostic procurement solutions on the market. With Order.co, buyers make self-service purchases through a curated catalog of products from vendors they already know and love. Order.co connects to all current vendors to scrap purchasing data of up to 6 months of spending history. This data assists the team in creating a streamlined buying experience with full budgetary controls.
One of the defining features of Order.co and the vendor-agnostic approach is that the platform can capture spend data from any vendor, even those with manual order processing methods. To accomplish this, Order.co connects to your online ordering systems through direct integrations, APIs, or online order platforms. The platform can also generate and transmit the PO to the vendor if needed. Order.co can automate PO transmission and capture spend regardless of how that vendor receives purchase orders (online, on the phone, or by email). Order.co facilitates order placement rather than merely capturing spend data.
Tracking orders across many vendors is easy with Order.co. The platform centralizes every purchase, allowing managers to view real-time tracking information from one screen. Order.co also facilitates procurement activities post-sale. The team handles returns, secures credit for missing items, initiates exchanges, and more. Order.co manages these tasks so internal stakeholders are free from making time-consuming calls or working on issue resolution. Order.co’s manual order fulfillment and financial management process is unique in the industry.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
AI enhancements
Most top-tier finance and cloud-based software solutions are integrating artificial intelligence (AI) features into their platforms and services. These enhancements make the accounts payable process easier. Airbase and Order.co are no exception.
Airbase uses AI technology in its optical character recognition (OCR) data transformation and error checking. The AI features of Airbase create “touchless” expense reporting with sophisticated document scanning, reconciliation, and audit trail checking. Accuracy in these functions improves month-end close activities and reporting. It’s worth noting that Order.co eliminates the need for OCR because PO, invoice, and receipt data are automatically stored in the platform throughout the P2P process.
Order.co’s AI algorithm performs many of the same error reduction checks while improving on these services by helping companies spot savings opportunities. To fortify the supply chain against disruptions and out-of-stock items, Order.co’s AI-enabled procurement functions automatically locate either the exact SKU from another vendor or a similar product from a high-quality vendor and give the user the option to order from these sources automatically. This automated approach to strategic spend ensures competitive pricing and eliminates the cash leaks that sap companies of their growth potential.
Financing and payment
Order.co and Airbase each offer ways to directly integrate payment sources into their platforms for AP automation and automate invoice processing within the accounting system. Only Order.co goes beyond facilitating settlement to providing financing solutions.
Order.co provides clients with innovative funding options that increase flexibility and maximize optionality for managing cash flow. Order.co’s Financial Offerings preferred advance offers buyers up to $500,000 in direct buying power for organizations — without expensive fees, interest payments, or delayed credit approval processes. With this unique financing feature, growing businesses access the capital they need to thrive without sacrificing equity or incurring excess expenses.
Procurement cards
Procurement cards (P-cards) are virtual or physical corporate cards assigned to individual users for making company purchases. They streamline the procurement process by letting users self-serve their purchases without sacrificing data capture, budget compliance, or approval processes.
Airbase offers physical and virtual purchasing cards as part of its platform services. The company also supports American Express and Silicon Valley Bank (SVB) corporate card integration for transaction capture. Both options make it easier for finance to capture spend data and track category and departmental spending against budgets. Traditional procurement cards work similarly to corporate credit cards, with the company paying for transactions at the end of the current billing cycle.
Order.co improves upon procurement card functionality with universal net terms and consolidation through its virtual card program. Using a virtual card, buyers purchase the items and services they need. Corresponding transaction and spend data get captured like any transaction, and these purchases are eligible for extended net terms like all purchases on the Order.co platform. These purchases can also be processed through consolidated billing, so managing payment is fast and easy no matter the source of spend. Purchases are coded at the time of the transaction, minimizing the lift for AP and bookkeeping teams.
Virtual card purchasing is a great way to maintain vendor relationships without sacrificing terms or spend visibility. It allows the buyer to handle the transaction in the way that works best, especially for vendors that choose to work through purchase orders or phone-based ordering.
Pricing
Airbase does not publish its pricing for any of its platform offerings. The company offers three tiers of service structured around headcount.
- The standard plan is a scalable package for up to 200 employees. There is some flexibility in selecting modules and some special features (although these are not outlined in Airbase’s sales materials).
- The premium plan is for companies of 200 to 500 employees. It customarily includes all modules of the Airbase system without forcing mid-tier users into enterprise-tier pricing that may be more than needed.
- The enterprise tier serves organizations of up to 5,000 employees, encompassing all modules and advanced features within the system.
Order.co structures its platform and services with a flat monthly fee regardless of seats, business locations, integrations, or order volumes. The only additional costs are fees paid on financial products like extended net terms and capital advances.
Order.co offers a comprehensive platform with advanced sourcing, fulfillment, tracking, support, and manual order handling with competitive, fair pricing for businesses of all sizes.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
"*" indicates required fields
Integrations
Airbase is designed to operate well within mid-market and enterprise clients' existing tech stacks. The platform integrates with Sage Intacct, Quickbooks online, Xero, Netsuite, and others. Its card integrations with American Express and Silicon Valley Bank (SVB) allow administrators to set non-payroll card spend and approvals through these two banks. In addition to its finance-specific integrations, the platform also integrates with other systems such as most Human Resources Information Systems (HRIS) systems, ERP systems, bill payment and processing tools, Slack, Okta, Google, Microsoft, and onelogin.
Order.co offers native integration with Workday Procurement for customizable procurement spend management and workflows, automating common tasks such as:
- Vendor onboarding
- Catalog curation
- Order fulfillment
- Payment
The integration capabilities of Order.co allow every department within an organization to share and verify data without manual work, duplication, errors, or frustration. These integrations also enable them to enhance the user experience of self-serve procurement while creating line-level visibility and automated general ledger (GL) coding for every transaction.
Order.co: Everything you need in spend management software
Order.co is the best all-in-one automation solution, offering AP process automation, AI insights, cash flow management, invoice approval, and innovative financing vehicles to create a spend management system surpassing simple transaction recording and spend reporting. Using the platform, clients empower compliant procurement, save money, streamline processes, fund growth, and capture every transaction for full visibility and better spend decisions.
If you’re ready to see the best spend management and AP automation software in action, schedule a demo of Order.co.
Get started
Schedule a demo to see how Order.co can simplify buying for your business.
"*" indicates required fields
Scalable procurement is an important priority for small and mid-market businesses handling an increasing flow of purchases and vendor agreements. Software enables data centralization and automation that helps these businesses run smoothly, regardless of size.
The market has more software options than ever for managing procurement, and Procurify is a prominent brand within the space. Procurify has many features that support procurement for its target market. Still, it’s worth close examination to determine if it’s the best option for your organization’s size, budget, procurement processes, and needs.
For those looking for a different mix of features, including more ways to empower users to self-service their buying process, alternatives offer additional flexibility and tools that streamline the process.
This article compares Procurify to Order.co, rated the number one Procurify alternative by Capterra. Read on to learn the key differences between these two tools so you can make the best choice for your business.
Download the free ebook: The Procurement Strategy Playbook
What is Procurify?
Procurify is a comprehensive spend management platform that provides real-time visibility into spending across an entire organization. It is designed to help businesses across multiple industries and market segments monitor spending and manage vendors.
The Procurify spend management system runs on a cloud-based platform with automated features that enable organizations to uncover cost savings opportunities while streamlining financial processes related to procurement, expenses, and reporting.
Procurify's suite of products is ideally suited for mid-size companies looking to take charge of their finance and operations and make smarter spending decisions. From procurement and sourcing to supplier performance management, Procurify provides a fully featured solution that gives finance and accounting teams control of their process and data.
Who is Procurify for?
Procurify is mainly for mid-market organizations aiming to organize and streamline the spend management process. Although the features in Procurify primarily benefit these smaller businesses, it does offer integrations that allow it to scale with growing companies. However, its flat-rate pricing may exceed budgets for smaller organizations.
Order.co: The top Procurify alternative as rated by Capterra
Order.co and Procurify are two top procurement and spend management systems for streamlining the purchasing process. Though the two solutions have many similarities, understanding their key differences can help determine the best option for your organization.
Read on to learn the differences between these two procurement management systems.
Onboarding
A strong onboarding process lets teams efficiently migrate data to a new platform to ensure a smooth transition from old systems.
Procurify reports onboarding times between 4 and 6 weeks depending on complexity and the number of existing integrations within the organization. NetSuite users are advised to set aside 8 to 12 weeks for onboarding. Procurify uses a professional services model for implementation, so expect to work closely with a consultant and implementation team to bring data and integrations into the platform.
Order.co implementation takes 2 to 8 weeks, depending on the number of vendors included in the catalog, vendor fulfillment preferences, preferred payment method configuration, and integrations. However, some organizations have implemented Order.co even faster, starting to place orders in as little as 10 days.
Every Order.co customer is assigned a dedicated implementation consultant, account manager, and catalog specialist to guide them through the process and curate their catalog. Order. co uses a project management system and weekly check-ins to keep onboarding on track, and implementation consultants can be available whenever they’re needed. Learn more about what an Order.co implementation looks like from Lucy Therapeutics.
Training
Successful implementation relies on managers and team members learning and using the platform. For this reason, most platforms offer training materials and resources to get everyone up to speed.
Procurify offers an in-depth training resource called Procurify Academy as part of its onboarding process. The training program gets admins and users familiar with their user levels and roles. It runs through all six stages of the implementation process and is strongly encouraged to ensure users can function within the system and learn its idiosyncrasies.
Order.co users receive comprehensive training from their implementation consultant. Order.co also holds monthly product trainings, operates an in-depth help center, and has a dedicated product training manager. Order.co’s help center contains an extensive catalog of articles that guides users through purchasing and payment workflows. For customers with large user bases, Order.co also offers personalized group training.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
Purchasing
Spend management is only half the battle of overseeing procurement spend. Streamlining the purchase process for buyers makes it easier to control costs as they arise versus addressing over-budget spending and maverick spending retroactively.
Order.co is one of the only vendor-agnostic procurement options on the market. The platform helps buyers self-service their supply needs through a curated catalog of items from the organization’s preferred vendors. As part of the implementation, Order.co uses purchasing data from every vendor and spend source, aggregating up to 6 months of spending history to create a streamlined buying experience with full budgetary controls.
The system integrates with all of a company’s most important vendors — even those who work via phone calls or a paper PO — to take the manual work out of ordering and give teams and individuals time back in their day. Once an order moves through the internal approval process, Order.co generates and transmits the PO to the vendor, regardless of how that vendor receives purchase orders (online, on the phone, or by email).
Order.co also makes it easier to track and manage orders across many vendors. Managers can view real-time tracking information for every purchase and vendor from within the platform. For issues after delivery, Order.co facilitates returns, credit for missing items, exchanges, and more. There’s no need for an internal stakeholder to make calls or resolve issues. Order.co’s process for manual order fulfillment and management is unique in the industry.
While Procurify offers similar spend management and reporting functions to Order.co, it doesn’t directly facilitate procurement for organizations. First, organizations must have a dedicated individual in charge of placing orders through the system. To enable direct ordering capabilities for stakeholders, system integrations through Procurify PunchOuts are required. Not every vendor has PunchOut capabilities, so order options may be limited.
AI enhancements
Artificial intelligence and algorithmic process improvement is an exciting enhancement to the procurement process. AI is helpful for fast calculations beyond the capability of human actors, such as exploring trends and identifying patterns and outliers in large data sets.
Like many options on the market, Order.co and Procurify use AI enhancements to help procurement and finance teams work more efficiently. AI algorithms can spot inconsistencies in invoices and reporting to improve data accuracy. AI-enhanced matching and invoice error detection can automatically comb finance and procurement data like purchase orders, invoices, and fulfillment records.
Order.co’s AI algorithm also helps users save money. To fortify the supply chain against disruptions, AI automatically helps locate either the exact SKU from another vendor or a similar product from a high-quality vendor.
Financing and payment options
Payments processing and automation are integral to the procure-to-pay process. Procurify and Order.co offer features to automate payments, verify accuracy through invoice matching, and handle invoices of every format.
Order.co also enables organizations to grow their operations with innovative funding options that put flexibility and cash flow optimization within easy reach. Order.co’s Financial Offerings preferred advance creates up to $500,000 in direct buying power for organizations — without costly fees, interest, or belabored credit approval processes. Order.co partners with innovative companies and high-quality vendors to make procurement fast and efficient.
Procurement cards
Virtual procurement cards (virtual cards or virtual P-cards) are assigned virtual corporate spending cards that streamline the procurement process by allowing users to directly purchase supplies or services online. Virtual P-cards are convenient for buyers, allowing them to make payments quickly and easily, and they offer budgetary control for managers. Purchases made with a P-card follow the same approval workflow as other purchase requests.
Procurify offers physical and virtual purchasing cards (P-cards) for buyers to use when ordering supplies. These virtual cards allow the finance team to capture spend data, track purchases against budgets, and ensure in-policy spend. Traditional procurement cards work in much the same way as corporate cards, with payment for services due at the end of the billing cycle.
Order.co improves upon procurement card functionality with universal net terms and consolidation through its off-catalog spend feature. Using a virtual card, buyers purchase the items and services they need. Corresponding transaction and spend data get captured like any transaction, and these purchases are eligible for extended net terms like all purchases on the Order.co platform. These purchases can also be processed through consolidated billing, so managing payment is fast and easy no matter the source of spend. Purchases are coded at the time of transaction, minimizing the lift for AP and bookkeeping teams.
Off-catalog purchasing is a great way to maintain vendor relationships without sacrificing terms or spend visibility. It allows the buyer to handle the transaction in the way that works best, especially for vendors that choose to work through purchase orders or phone-based ordering.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
"*" indicates required fields
Integrations
Both Order.co and Procurify offer a robust selection of integrations to unite data and processes across the organization, including SageIntacct, NetSuite, Quickbooks, and more.
Order.co offers native integration with Workday Procurement to create a completely customizable procurement experience, with automation for every step of the process, including:
- Vendor onboarding
- Catalog curation
- Order fulfillment
- Payment
The integration capabilities of Order.co allow every department within an organization to share and verify data without manual entry, duplication, errors, or frustration. These integrations also allow them to enhance the user experience of self-serve procurement while creating line-level visibility and automated general ledger (GL) coding for every transaction.
Pricing
Procurify has a flat fee for its base level of service and licenses. Additional seats and integrations are available in a customized enterprise-level plan. It’s important to note that Procurify’s base pricing does not include NetSuite integration. That level of service requires custom pricing through the Procurify sales team.
Order.co users pay a flat monthly fee regardless of seats, business locations, integrations, or order volumes. The only additional costs are fees paid on financial products like extended net terms and capital advances.
Order.co delivers more value and functionality for your investment. The platform brings together sourcing, order fulfillment, tracking, order support, and manual order handling, in addition to the benefits of other spend management solutions.
Why businesses choose Order.co
Businesses looking for the features and flexibility of a spend management platform with direct ordering, fulfillment, and payment functionality choose Order.co. Its complete, native procure-to-pay functionality allows organizations to curate a supply catalog of preferred items, source alternatives for backstocks, speed up the approval and fulfillment process, and streamline the payment process.
To see how Order.co can work within your organization, request a demo today.
Get started
Schedule a demo to see how Order.co can simplify buying for your business.
"*" indicates required fields
Indirect procurement spending has a sneaky way of sapping cash from even the most well-run businesses. That’s understandable since indirect spending isn’t tied to a specific client, product, or project, so it’s harder for procurement professionals to track. However, correctly managing indirect spend has significant benefits for all organizations — they just need the right tools.
This guide shares information and tips for getting more indirect spend under management and answers questions about this impactful category, including:
- What is indirect procurement?
- The five most common indirect procurement categories
- Challenges in managing indirect procurement
- How to manage indirect spend categories
- Tips to manage indirect spend categories more effectively
Download the free ebook: The Procurement Strategy Playbook
What is indirect procurement?
Indirect procurement is the process of sourcing goods and services not directly related to the production of a product but still necessary for the functioning of the business. Where direct spend can be tied directly to activities like manufacturing, client services, and billable project expenses, indirect procurement serves day-to-day operations. It’s often the most significant expense in a business and, therefore, the hardest to control.
The 5 most common indirect spend categories
Most businesses spend up to 15 to 30 percent of total expenses on common indirect procurement categories. In larger organizations, managers may administer spending on an individual category to ensure competitive pricing and strong contracts.
Travel and events
Employee travel and events are often a significant source of indirect spending for organizations as they are not often linked to a specific product or project. Companies incur a range of indirect travel and events costs, including:
- Airfare
- Ground transportation
- Food stipends
- Hotels
- Conference fees
- Catering costs
- Trade show space
- Promotional items
Managing travel expenses effectively is an essential component of overall spend management.
Overhead
Business overhead is the indirect costs of running a business, including items such as:
- Rent
- Utilities
- Facilities management
- Professional services
- Consulting fees
- Administrative costs
- Salaries
- Insurance
- Taxes
- Outsourcing services
Overhead is typically accounted for in the company's financials as a separate category within operating expenses. Although it includes many fixed costs, they may be difficult to track and control without a procurement approval and management process.
Supplies
Supplies purchasing often includes everyday use items, such as:
- Stationery and office supplies
- Printing equipment and media
- Cleaning supplies
- Office furniture
- Computer peripherals
- Consumables
Software and communications
Organizations spend considerable money on software licenses and communication tools, including subscription fees, licensing costs, equipment charges, and phone systems contracts.
Software licenses on corporate cards often become a source of maverick or unmanaged spending, as credit cards and expense reports make it hard to track pricing and renewal information. This is especially true when the business owner associated with the original contract or purchase leaves an organization or changes roles, resulting in unused licenses or programs that quietly renew, leak cash, and reduce profitability.
Marketing and Advertising
Promotional budgets for marketing and ad costs include creating brand and product awareness, developing customer loyalty, and providing promotional strategies.
Examples of marketing procurement include various costs and fees include:
- Paid advertising campaigns
- Website design and hosting
- Market research expenses
- Sponsorship costs
- Content creation
- PR agency fees
Advertising is usually more narrowly focused on specific activities like television commercials, online ads, and print advertising. Both marketing and advertising require an investment in services and materials to execute a successful campaign, and most of these expenses fall under indirect costs.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
Challenges to managing indirect spend categories
The nature of indirect procurement presents challenges for managing it successfully. Fortunately, many of these factors are within the organization’s control.
Here are some common challenges businesses must overcome to establish more cost-efficiency in their indirect procurement:
Lack of approval process: Working with a robust purchase approval process makes tracking spending on indirect expenses easier. It ensures every purchase falls within policy while helping identify spending trends, price discrepancies, and quality issues.
Over 50 percent of respondents to one survey reported they’d experienced platform fraud in the previous 2 years. Without formal approvals, it’s challenging to catch redundant purchases, out-of-contract spending, risky vendor agreements, and procurement fraud. An effective interdepartmental approval process helps finance and management reduce waste spending and maintain strong security and compliance.
Undocumented policies: Without a documented, well-communicated purchasing policy, buyers have no reference for how to do things correctly. This makes buying decisions more challenging and robs the finance team of the tools needed to manage spending. Organizations can proactively avoid costly procurement issues when employees have the proper guidance and process to make purchases.
Maverick spend: Also called “rogue” or “shadow” spending, maverick spend is purchasing outside a company’s established policies or those made without approval. This type of spending often happens quickly and without visibility into the purchase, the vendor source, or the total procurement cost.
Maverick spend is challenging to manage, as the transactions happen on corporate cards, in expense reports, or as part of auto-renewing subscriptions. In some cases, employees may be unaware that their purchase is unauthorized. In others, they may attempt to improve the bottom line by circumventing the company’s approved suppliers.
Out-of-policy spending leads to higher costs through loss of discounts, waste spending, and overspending on emergency purchases and shipping. These transactions are difficult to reconcile during the accounting process, leading to excess research time and loss of productivity.
Redundant vendor relationships: When multiple departments or locations use similar vendors to procure the same goods, it can result in a loss of leverage and product quality. Unifying purchasing to reduce product SKUs and limit the number of vendors used creates more savings opportunities and stronger negotiations, but it requires bringing together purchasing under one process. Streamlining indirect spending through a procurement management system is the most efficient way of managing the process across every department and location.
How to manage indirect spend categories
The best procurement process makes it easy for end users and buyers to initiate requests, quickly route them through a well-crafted approval process, and automatically pass the fulfillment and payment work to accounts payable (AP).
1. Build and communicate the purchasing process
Well-managed procurement and strategic sourcing start with a formal process. Create a document outlining and formalizing the steps required for every purchase or contract. It doesn’t need to be elaborate, but it should inform stakeholders on how to get their needs met, give them access to the tools and forms to make informed decisions, and provide progress information to ensure the smooth completion of a purchase.
The following steps help form a new purchasing process or refine a current one:
- Define the scope and purpose of the process to determine its goals, such as minimizing maverick spend and ensuring quality control.
- Identify the stakeholders involved in the departmental approval process. This could include direct managers, legal, IT, security, finance, or executive stakeholders. In many cases, contract value determines the extent of approvals. For small contracts or petty cash purchases, direct manager approval may suffice. Additional approval and research may be required for larger contracts over a preset dollar threshold.
- Set up procedures for creating purchase orders, such as a central intake form or purchase requisition. Establish a workflow for obtaining approval from stakeholders, selecting vendors (if applicable), and coordinating with accounting or finance for payment processing.
- Review the purchasing process regularly to evaluate efficiency and ensure it covers all aspects of procurement.
Why communication is essential to procurement policy success
Once established, communicate the new policy to the organization consistently and promptly to ensure all stakeholders know about the changes and how they affect purchasing. Highlight changes regarding creating purchase requests, obtaining approval from stakeholders, selecting vendors, and coordinating with accounting or finance for payment processing.
Give teams easy access to documentation with clear guidelines for every purchase. Documentation through a central database or wiki helps prevent mistakes and confusion around procedures.
2. Centralize spend data
Centralizing spend data makes it easier to track and understand the sources of spend. To achieve this, companies should consider collecting data from all applicable sources, such as:
- Finance records
- AP reports
- Corporate cards
- Expense reports
- Vendor contracts
Centralized data improves spend visibility, encourages efficient budgeting and forecasting, and reduces issues within the sourcing and payment processes. It improves the chances of detecting suspicious activity or outliers in purchasing processes.
3. Conduct spend analysis
With data successfully centralized, organizations can conduct spend analyses to gain insight into spending habits and patterns. The goal is to look for opportunities to reduce costs while maintaining quality. Identify redundant purchases or SKUs, unnecessary or maverick spend, and opportunities to streamline processes to reduce waste spending.
Spend analysis also identifies non-compliance with vendor contracts or internal policies and enables corrective measures.
When conducting spend analysis, look at spending from several perspectives:
- Location-based total spending
- High-volume and repeat purchases
- Similar SKU purchases (for instance, several brands of common items like batteries)
- Average spend by business units or departments
- Budget variances between separate locations
- Localized adjustment for fixed costs (such as rent and equipment costs)
Analyzing spend through these lenses creates more context for analysis and better information for decision-making.
4. Streamline vendor options
Streamlining the number of vendors an organization works with helps optimize procurement costs by reducing administrative overhead associated with contract management, invoice processing, and other vendor-related activities.
Additionally, it allows for more effective establishment of supplier relationships, as organizations can develop deeper relationships with fewer vendors. This could result in better terms, increased discounts, and reduced prices due to greater bargaining power.
Furthermore, having fewer vendors leads to greater visibility into spend data, making tracking costs easier and identifying areas for savings. It simplifies the process of monitoring vendor performance against terms and conditions as well as supplier compliance with regulations.
5. Strengthen negotiations
Centralizing the procurement process and streamlining the vendor pool enables organizations to become better customers to their preferred vendors. This strengthens the negotiating position for every vendor and unlocks options for better pricing and terms based on increased volume.
A slimmer vendor list makes every step of the accounting process easier. Fewer vendors result in fewer monthly invoices and better visibility into how departments and locations spend within each category or with each vendor. This increases benchmarking opportunities and allows procurement to monitor vendor performance and compliance goals closely.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
"*" indicates required fields
Tips for managing indirect spend categories more effectively
Establish backups for your most critical items
While steadily improving from the early days of the COVID-19 pandemic, supply chain management issues still present challenges for every organization. The most effective procurement teams build redundancy into the procurement process for mission-critical items, sometimes creating relationships with three or four backups to meet demand during delays or shortages.
Identify the most important items to your organization and establish a plan to maintain business continuity if your frontline vendor experiences sourcing challenges.
Practice bulk purchasing
Often, the per-item price of an item drops considerably when organizations buy them in bulk. One example is nitrile gloves in medical facilities. While these items aren’t expensive, they are critical to the successful daily operation of doctor’s offices, dentists, and other healthcare providers. Consider bulk purchases of these items to reduce costs through volume discounts and act as an insurance policy against shortages and shipping delays. Bulk buying ensures stakeholders have the exact, high-quality products on hand and avoids extra expenses and time spent sourcing similar items in the event of an issue.
Consider procurement software
As procurement functions grow in complexity, most organizations need tools to manage increasing deal flow and promote scalability. Procurement software like Order.co streamlines and automates the purchasing process from intake to payment.
Manage indirect spend categories automatically with Order.co
Procurement solutions make it easier to see your spending, track trends, and bring unnecessary costs under control without adding more manual processes.
Order.co gives organizations all the tools and visibility needed to create a dynamic and automated workflow for every purchase, including:
- Budget and individual spending guidelines that keep purchases within policy
- Purchase requests that automatically route through an established approval process with full visibility for stakeholders
- Quick sourcing of backordered or out-of-stock items through other high-quality vendors using an algorithmic suggestion system
- Automatic general ledger (GL) coding that ensures every purchase is correctly represented in financial reporting
- AP process automation that allows accounting to pay for items electronically and consolidate the payment process into a single monthly payment across multiple vendors
- A system that uses transaction data to track supplier performance, item pricing, spending trends, and total cost/value of procurement
If you need a scalable way to overcome the most pressing indirect procurement challenges, schedule a demo of Order.co today.
Get started
Schedule a demo to see how Order.co can simplify buying for your business.
"*" indicates required fields
Managing buy and sell cycles is getting trickier as the economy continues to battle downward pressure. Interest rate hikes and the rising cost of finance make it more difficult for vendors to offer flexible terms. Formerly relaxed credit terms have tightened considerably, and buyers are feeling the effects of less repayment flexibility.
As conditions tighten, buyers and sellers must pay more attention to term arrangements in their invoices. While extending terms to 30, 60, or 90 days is still possible, it’s often reserved for larger organizations with some play in their cash flow. Small business owners and startups may need to seek new ways to get what they need.
Today, we’ll look at net payment terms and explore alternatives to the traditional net term agreements buyers formerly relied upon.
- What are net 30/60/90 terms?
- How does a net terms agreement work?
- What are the pros and cons of extended net terms?
- Do vendors have recourse when buyers default on traditional net terms?
- Are there good alternatives to extended net terms?
- How do net terms as a service work?
By the end of this article, you’ll have all the information you need to negotiate purchases that benefit both parties without putting a strain on cash reserves.
Download the free ebook: The Procurement Strategy Playbook
What are net 30/60/90 terms?
Net 30/60/90 terms are a type of business credit that offers an extended repayment agreement. Net 30 is one of the most common payment terms, requiring the buyer to pay within 30 calendar days of the invoice due date. Net 60 and 90 agreements extend the payment time to 60 and 90 days, respectively.
Extended terms help maintain strong business relationships between buyers and sellers. They benefit buyers by allowing them to purchase goods or services without paying immediately, and they assure vendors that the client will pay on time.
How does a net terms payment agreement work?
A net 30 payment term allows customers to purchase goods or services from a vendor without paying upfront. Instead, customers receive an invoice that they must pay within 30 days. This gives them more time than a due-on-receipt invoice and assures vendors of payment within a specific timeframe.
However, there are some potential drawbacks to using net 30 terms. While the flexibility of net 30 attracts buyers, it introduces a higher level of risk for vendors. Vendors offering extended terms may strain their cash flow since the product is removed from inventory well before payment. And since vendors must write off the loss if the buyer doesn’t repay, they should be selective in extending net 30 terms only to low-risk or established customers with a solid repayment record.
What are the pros and cons of net 60 or net 90 terms?
Longer net terms make it easier for companies making purchases to balance their cash flow, especially with larger expenses. This increased flexibility creates more opportunities for these businesses to leverage their working capital to stimulate growth. It also allows them to do so without incurring interest or fees on short-term debt.
Because extended net terms can remove the normal constraints of loan payments, interest, or fees, they help encourage buyers to commit to big-ticket purchases. This makes it easier for vendors of equipment or expensive products to close deals. As with shorter terms, vendors should consider a buyer’s creditworthiness when granting longer terms.
Vendors may also want to consider offering an early payment discount as an incentive to encourage buyers to pay in advance of the invoice due date. Early pay discounts often save buyers up to 5 percent — enough to be enticing, improve customer loyalty, and help sellers stave off late payments.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
What recourse does a vendor have in cases of non-payment?
With increasing credit costs and economic troubles rising, over half of invoiced B2B transactions are overdue. Vendors may access one or more remedies when a buyer defaults on net terms. Generally, vendors may attempt to collect unpaid debts through letters or calls demanding payment. They may also seek legal relief or terminate services.
Termination: If the agreement is part of a contract, the vendor may be able to end the services agreement due to non-payment. To ensure this option, a clause in the contract must outline acceptable remedies, penalties, and outcomes of non-payment. Vendors must be proactive in chasing payments and taking steps towards collecting debt as soon as possible, as most jurisdictions have time limits on collections and filing lawsuits to enforce outstanding debts.
Debt collection: A debt collection agency is a third-party company that specializes in recovering payments from delinquent accounts. These agencies use a variety of tactics to collect on debts, such as making phone calls and sending emails or letters demanding payment. If necessary, they will perform research to locate the debtor and may advise on legal proceedings for debt recovery.
Factoring: Factoring is a financial service where vendors sell their accounts receivable (invoices) to third-party lenders at a discounted rate. The lender then collects the payments from the buyers on behalf of the vendor. This is a good option for vendors that don't want to pursue lengthy collection processes or legal action against buyers who are in default.
Factoring can be an effective solution as it allows vendors to receive payment immediately, even if they have yet to collect from their buyers. In some cases, vendors sell invoices to factoring companies during invoice processing to stimulate immediate cash flow.
Credit reporting: As with private credit, businesses have a credit bureau score that reflects their credit activity, repayment history, and number of days past due in cases of non-payment. Reporting to a credit bureau can help vendors register non-payment and make the credit landscape safer for their interests and other businesses. Thus, a credit check is an important part of a vendor's or lender's due diligence process, as it helps reveal a buyer’s credit risk when considering an extended terms offer. While credit reporting can’t directly help recover unpaid balances, it may incentivize the buyer to keep the account current.
Alternatives to standard net terms agreements
For situations where a buyer isn’t positioned to get extended net terms or the vendor isn't prepared to extend them, there are other options.
Invoice factoring: In invoice factoring, the vendor sells unpaid invoices to a factoring company to get immediate payment for goods or services.
Advance payments: Sometimes, customers may need to make an advance payment to secure a sale or cover certain expenses incurred by the vendor, like materials or labor involved in providing a particular service.
Subscription models: Breaking up payments into monthly or annual subscription models can help make it easier and more manageable for customers to pay for services or products while ensuring that vendors get paid on time and reliably.
Short-term loans: These are loans of less than 12 months with repayment plans that include fees or interest. These loans may come from the vendor or through a lending institution or bank. Loans have become considerably more expensive over the past year, with the Federal Reserve hiking the rate 11 times since March 2022 to stem rising inflation.
Equity agreements: Equity agreements are arrangements between two parties where the seller provides goods or services in exchange for a certain amount of equity, usually represented through stocks or shares. This can make it easier for smaller businesses that don't have much cash flow to acquire goods while allowing the seller to benefit from the company's growth potential.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
"*" indicates required fields
Net terms as a service as an alternative to standard net terms
With the evolving credit landscape, 2023 has seen changing procurement trends, including how sellers and buyers approach purchasing and financing. Net terms as a service is an alternative to standard net terms that allows vendors to receive payment for their services through a third party without interest rates or fees. This agreement can benefit the vendor, as it provides a reliable source of income over an extended period. It also helps businesses with limited cash flow access the goods and services they need to help them grow.
How do net terms as a service work?
Vendors that leverage net terms as a service do so through a third-party procurement platform like Order.co. The platform acts as an intermediary between the vendor and the customer, processing orders and paying the vendor for the purchase. Order.co then provides uniform net terms on all purchases from the vendor to the buyer. Because the procurement platform provides this service, buyers can access extended net terms with flexible, universal credit checks and no fees, loss of equity, or interest payments.
What are the benefits of net terms as a service?
Net terms agreements with Order.co offer both buyers and sellers benefits that smooth out bumps in the buy-sell cycle without sacrificing cash flow or deal security. They make it easier for companies to get what they need while providing revenue stability to suppliers.
Here are some of the ways net terms as a service improve procurement:
Access to capital: Order.co offers buyers more alternatives to taking out a loan. Through Order.co Financial Offerings, organizations can access up to $500,000 in preferred credit to buy the necessary supplies and equipment without red tape or long settlement periods. This levels the playing field and speeds up the cash conversion process so businesses can become cash flow positive sooner.
Instant access to supplies: Using a procurement management system for net terms on supplies means buyers have access to the items they need without delays for repeated credit checks, individual vendor setup, or prolonged sourcing research. Buyers can use the vendors they already work with and access an extended marketplace of vendors when they don’t have an existing contact.
Stability in repayments: Universal net terms simplify the payment process for buyers, making accounts payable and cash planning more streamlined. It also means fewer variables to track between each vendor and less chance that payments will slip through the cracks. On the vendor side, payment upfront makes revenue planning straightforward and dependable.
Reasonable credit requirements: Small businesses and new business entities often experience limitations in their borrowing power due to traditional credit reporting and risk management. A preferred advance with flexible terms allows them to benefit from financing without worrying about compounding high rates- just one fee agreed to upfront.
Security for vendors: Extending net terms to a buyer is a trust exercise. The vendor must have reasonable assurance that the buyer will repay the debt on time. With net terms as a service, the vendor receives payment upfront. This makes working with buyers at every size and stage easier without adding risk.
Stronger relationships: Buyers and sellers agree that streamlined buying and upfront payment make vendor relationships better. Net terms as a service help both parties move away from transactional procurement to build more stability and collaboration in their businesses.
Get Order.co for better terms and more flexibility
Order.co offers many features that benefit both vendors and buyers. The platform makes it easy for known buyers to transact and gives vendors access to new clients looking for the best rates, service, and quality.
With access to net terms as a service, vendors are empowered to close deals with full confidence in repayment and easier cash flow planning. Partner with Order.co and offer your customers flexible payment options while ensuring zero risk to your business.
Get started
Schedule a demo to see how Order.co can simplify buying for your business.
"*" indicates required fields
Procurement management is a study in balance. Professionals and teams tasked with getting supplies in the door must navigate a complex set of priorities, including cost, availability, resilience, and total value.
To effectively perform in procurement, you must have the soft and hard skills necessary for achieving results in circumstances that can be complicated. But which skills should you focus on to move up in your organization? And are there tools that make the process easier and the results better?
Read on to learn how the right practices combined with helpful tech solutions ensure procurement managers can serve their teams and build their brand within a company.
Download the free ebook: The Procurement Strategy Playbook
What are procurement management skills?
Procurement professionals manage the process of obtaining goods or services for an organization. The procurement team, led by a procurement manager, uses a combination of strategic planning and tactical execution to acquire the best goods for a project with quality service and competitive pricing.
Procurement managers generally work on a core set of day-to-day tasks, including:
- Sourcing new products
- Vetting and contracting with suppliers
- Negotiating procurement contracts
- Enabling contract management
- Authorizing purchasing and payments
- Tracking delivery, stock levels, costs, and vendor performance
- Reducing excess procurement costs
- Performing category management and analysis
- Developing strategies for sustainable procurement
A successful procurement manager must possess many competencies to perform their role effectively. The best procurement managers are skilled in communication, contract negotiation, problem-solving, decision-making, research, and analysis.
Why are procurement management skills essential to career growth?
Effective procurement is both a science and an art. To create opportunities for advancement, it’s ideal to have a strong skill set paired with curiosity, creativity, and a team-focused approach.
With a foundation built on knowledge, procurement managers balance cost management and priorities more efficiently, negotiate better deals with suppliers, and create more value for departments and stakeholders. This leads to streamlined processes and new procurement strategies for cost-effective purchasing, which further helps procurement professionals stand out in the marketplace.
5 Essential skills of an effective procurement manager
In addition to building a strong procurement skill set, many procurement professionals turn to software to enhance their practices and reduce manual labor. Software is especially helpful in keeping productivity high in the face of rising demand. While the increase in procurement staff is expected to top 3 percent in 2023, the anticipated increase in workload is 10.6 percent. Software helps procurement teams close the gap with better efficiency and reduced busywork.
The following five skills are integral to success and advancement in procurement. Software can further enhance each to create even greater results.
Sourcing
Every positive procurement outcome begins with the right supplier partnerships, so successful sourcing is a top priority for procurement managers.
Procurement managers must be able to identify and contract with reliable, cost-effective suppliers to meet organizational demand. This level of strategic sourcing exercise often goes beyond finding rock-bottom pricing.
Procurement managers factor different priorities into what they're sourcing. Is there a specific timeframe? Or a certain type of vendor they want to look into? The most important piece is finding the best price, most efficiently.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
Using a procurement management tool like Order.co centralizes this search and cuts down on the redundant work of finding potential partners. With the platform, procurement managers don't have to worry about going from supplier to supplier, getting different quotes, and negotiating.
Contracting with suitable suppliers also reduces second-order issues such as waste caused by fulfillment issues, quality gaps, logistics concerns, and returns. Top-tier suppliers commit to fulfilling orders with accuracy and resolving issues when they arise.
Additionally, sourcing is critical to ensure the organization abides by ethical procurement standards. Due diligence in the early stages of sourcing identifies potential reputational and supply chain management concerns before they impact the organization.
Budget management
Every procurement manager must understand budget management and how to control and allocate resources to achieve organizational objectives. Strong budgetary knowledge dovetails with research skills to help improve risk management, find opportunities, accurately estimate costs, manage departmental spend wisely, and stay on top of changes that could influence the budget.
Budget management also requires experience tracking expenses and analyzing spend efficiency to ensure optimal resource use and eliminate redundancy, including monitoring performance against departmental or individual management goals. With proactive budget management practices, organizations reduce waste and increase efficiency.
Proactive procurement managers know that managing cash flow through fluctuations in the buy-sell cycle greatly improves purchasing outcomes, timeline management, and project completion. To help smooth the path, many procurement teams look for financing and extended net terms options that get products in the door while creating repayment flexibility.
Order.co Financial Offerings provide this flexibility, with preferred advances up to $500,000 and extended net terms that give you more options. You can tap into our financing opportunities and financial products and get an additional 60 days to pay any vendor. You don't have to negotiate terms with individual vendors to have that advantage.
Time and supply chain management
Uncertainty is one of the biggest challenges procurement managers face in 2023. Although reported domestic supply chain delays dropped from over 36 percent in 2022 to 14.5 percent in 2023, the world continues to deal with disruption in various market sectors. This means procurement teams must build redundancy into their planning to maintain timely fulfillment.
Through its dynamic sourcing and curation tools, Order.co provides stability and automatic redundancy features to combat shortages and delays. Buyers have access to a curated catalog of products from preferred vendors, and if a product is backordered or a vendor can’t meet demand, they can automatically source exact or similar products from a network of over 15,000+ high-quality vendors. In the case of supply chain disruption, companies have other options. Order.co buyers always have control of what they order and how they want to handle supply chain issues.
The Procurement Strategy Playbook for Modern Businesses
Download the ebook to learn how to modernize your procurement strategy and realize the benefits of tech-enabled procurement.
"*" indicates required fields
Team leadership and support
Procurement managers’ core responsibility ties back to creating productivity and visibility in user and supplier relationships. A spend management system takes the manual effort out of this mandate.
A large part of the procurement manager's role is ensuring employees have the right tools for success. When it comes to our custom catalog, you can curate what a specific user sees so it's only relevant to them. They're staying on task; they're staying focused.
Dynamic procurement software helps teams get what they need quickly and confidently, allowing the rest of the procurement process to happen in the background while maintaining full visibility, approval integrity, and transaction recording.
Business reporting
When it comes to career advancement, you need to show your work. Procurement professionals eager to advance in their careers must establish and meet procurement key performance indicators (KPIs), increase cost efficiency, demonstrate cost savings, and build team productivity — and demonstrate everything to their boss in a way that makes sense. While it’s hard to show the intangible benefits of strong procurement skills, the numbers don’t lie.
Order.co creates total visibility into your procurement function’s activities and outcomes, showing management, the executive team, and the finance department more than how much you spend. Transparency shows the efficiency of the spend, the relationships and benefits procurement supports, and the value the team brings to the table.
How Order.co helps you ace procurement
Order.co builds on the natural talents of motivated procurement professionals, making the purchasing process easier with centralized ordering, easy payment, seamless redundancy plans, and total visibility.
Want to see the power of Order.co in action? Schedule a demo today.
Get started
Schedule a demo to see how Order.co can simplify buying for your business.
"*" indicates required fields