Improving supplier relations with purchasing management software
Companies face a number of challenges in their day-to-day operations. Between managing staff, production and customers, it’s not unusual for managers to find themselves quickly overwhelmed. And when this happens, they can quickly forget to pay proper attention to a very important part of a company’s business: supplier management. In fact, a company that mismanages its purchases or is deprived of suppliers runs the risk of running out of inputs and therefore of no longer delivering outputs. The consequences of such a situation can be disastrous, leading to major crises or even bankruptcy. Good management of this parameter is therefore a prerequisite for a company’s development.
To ensure that purchasing runs smoothly, many companies are wondering what solutions to adopt. In many cases, the creation of a specialised department has not proved sufficient. The fact that purchasing is often a periodic activity means that such departments can find themselves without a mission for long periods of time, and are then entrusted with other tasks. As a result, when the purchasing period comes around again, the department in charge is busy with something else and fails to fulfil its primary mission.
The best solution therefore seems to come from technology, particularly purchasing software that promotes supplier relations. If you’re still on the fence about purchasing software, this article will help you take the plunge. If, on the other hand, you have already adopted purchasing software, but are still wondering how to manage your supplier relationships properly, you’ve come to the right place.
Sommaire
The benefits of purchasing software for good supplier relations
Purchasing software is also known as SRM, which stands for Supplier Relationship Management. These tools are specially designed to help you take a new approach to managing your suppliers. The advantages are numerous and are a guarantee of quality, but you need to develop a strategy with this SRM.
1. Purchasing software helps you choose the best suppliers
Personal and business relationships can quickly turn sour if the two parties don’t understand each other. And to understand each other, you need a good communication channel and standardised practices for dealing with unavoidable situations. This is what a purchasing management tool offers you, by enabling you to exchange information with your suppliers in a unique way, with the aim of gaining a better knowledge of suppliers and maintaining a good supplier relationship over the long term. These exchanges will enable you to judge the quality of the services offered by suppliers, the price they quote, but also and above all personal elements such as their character and approach style.
Choosing a supplier is an important step. But the usefulness of purchasing software doesn’t stop there.
2. Cost reduction
As you know, starting up a relationship with a supplier often requires a great deal of time and energy, but it also involves complying with regulations on customer-supplier relations. With purchasing software, most of these costs can simply be eliminated. In fact, these platforms make it possible to exchange ideas and build long-term relationships with suppliers, which means that they can be favourably disposed to the idea of bringing costs down considerably while maintaining a quality service that protects you from unpleasant surprises such as delays and other inconveniences.
SRM software is also capable of identifying sources of waste to further reduce costs and improve service at the same time. Another advantage of using a management tool is that it allows you to negotiate with suppliers so as to benefit from fixed prices or to specify the procedure for staggered increases. This feature reduces price fluctuations, so that the company does not have to regularly increase the price of its products. This measure also avoids the quarrels and misunderstandings that can arise between companies and suppliers because of different costs. In the long term, this increases the company’s turnover without raising prices.
3. Order management
Managing orders, especially if your company deals with a large number of suppliers, can quickly become a real headache and a source of frustration between the various parties. Purchasing management software takes these situations into account.
With SRM, you can easily check the progress of orders and know when they need to be placed. But that’s not all. Estimates and invoices, which are closely linked to orders, are also taken into account. With this software, you can edit quotes and invoices, all thanks to dashboards that provide all the details. Thanks to these dashboards, it is also possible to generate orders in just a few clicks, check the data and establish precise monitoring of the process. This facilitates the purchasing process and speeds up the processing of requests and invoices.
4. Managing deliveries
Deliveries are also a very important parameter in supplier relationship management. There is nothing more stressful for a company than not seeing the orders it has placed arrive. Late deliveries are commonplace and can cause a great deal of disruption. Purchasing software makes it possible to manage these situations and reduce supplier risks by giving you the option of tracking the delivery of orders. This saves you time, because it means you don’t have to check everything yourself, and it lets you know when you need to follow up with your supplier, all in just a few clicks.
5. Managing invoices and payments
The adage “money is the sinews of war” often comes into its own when it comes to relations between companies and suppliers. It is not uncommon for suppliers to complain about late payment, or for companies to cite a simple oversight. Thanks to the use of purchasing management software, these quarrels are a thing of the past. These tools have features that will give you an accurate picture of the invoices you need to honour. There are also measures in place to make it easy for you to keep track of payments made, thanks to simplified invoice processing. This will give you better control over your overall budget and let you know which suppliers are due to receive payment from you in the near future.
How do you choose purchasing software?
Purchasing software can be very useful and can make your relationship with your suppliers much smoother, but it’s important to make the right choice. A quick look on the internet will show you that there are hundreds of publishers offering this type of software, both in the form of an application to be installed on your computer and in the form of a website to be consulted as and when required. Before choosing a particular product, you need to take these criteria into account:
- Company size: this is the first criterion you need to take into account when making your choice. The larger your company, the greater the chance that you will have many suppliers and need a lot of functionality.
- Your budget: you’ll find shopping software online that’s free, and others that will cost you hundreds or even thousands of euros. Your financial resources are therefore also an important factor in determining your choice. However, there are currently tools available at reasonable prices that will enable you to stand out from your competitors in the long term.
- Compatibility: you also need to make sure that your purchasing software is perfectly compatible with your management software, particularly in terms of content format.
Although setting up purchasing management software represents a cost, in the long term installing it can help you increase margins and reduce costs. The Weproc tool plays a strategic role in the purchasing process, particularly in supplier relations. The idea of a partnership with strategic suppliers gives you more than just a competitive edge in the purchasing process.
Want to learn more about our procurement management software Weproc? Contact us or request your free 15-minutes demo below!
Weproc is a SaaS software specialized in digitizing the procurement process of companies. From purchase requests to supplier invoicing, through the validation process, Weproc is designed to simplify the purchase management of SMEs and mid-sized companies by centralizing all purchase-related activities.