Supercharge Your Purchasing Approval Process

We’ve all been through it at one point or another…one of your best tools breaks and you don’t have a spare! Now, you need to order another one in order to do your job properly and you need it yesterday. You send a request to the Purchasing Department and tell them what you need. Then, you wait. And wait. And wait. One day when your hair starts to grey, the tool you needed four months ago finally shows up! What gives??

Purchasing Approvals

If your company / department has a budget, then every request for purchase likely must go through some sort of approval process. The approval process for that request may depend on the commodity, price, etc. of each line item. Approvers exist in the organization for each of these approval types and unfortunately, we have to wait for them to approve the request before that budget money can be spent. And since most of the approvals are sequential, the next approver cannot approve until the previous approver gives it a thumbs up. And in some cases where the purchase is large enough, the purchasing department may even be required to source the request from multiple Vendors (which results in even longer delays)!

Only after all approvals have been completed for the request can the Purchase Order be created and sent to the Vendor. How can we speed this process up??

Locate Bottlenecks and Motivate Approvers

In order to get your approval process running more efficiently, you need to determine where you have bottlenecks or inefficiencies that result in delays.

Analyze Your Approval Process:

  • Who is involved in the current review and approval process? Should they be involved?
  • What is being approved (item, quantity, commodity, etc.)? Are the approvals required necessary and appropriate?
  • When are items being approved? Are the approvals received and actioned in the time frame expected?
  • Where do bottlenecks exist? Is it one department, certain users, or across the entire organization?
  • Why do bottlenecks exist? Is it training, awareness, policy, organizational structure, lack of communication?

In order to discover and answer these questions, you need data. Have you heard the saying: “You can’t manage what you don’t measure”? In order to measure performance, you will need to track every step of the approval process so that you can analyze that data and identify non-value steps and improve purchasing cycle times. Once you’ve identified areas for improvement, you can lead your team down a path towards decreasing transaction costs through increased process efficiency.

Software to Automate Your Approval Process

Using automated, electronic approval software will ensure that every step of the approval process is captured. It can also help expedite approvals by notifying and reminding approvers who have approval tasks to complete. I would be remiss if I didn’t include a plug for the WebProcure solution as it provides a dynamic and flexible approval process that will help to speed things up!

Is It Worth It?

For lower value purchases, compare the cost of the purchase versus the time you are requiring for that purchase to be approved. If you’re spending more money in time than the purchase itself, you may be better off skipping the approval process entirely! Consider giving your users a low value spending limit that requires a shorter approval path.

Beware Rogue Spend

If your approval process is too complex, you may inadvertently motivate your users to go out and purchase outside of your fancy system using their P-Card. To discourage this activity, make sure your processes are only as complicated as absolutely required. In addition, try to keep your end users informed of the process in order to help to keep them engaged and less likely to go “rogue”.

Future Considerations

There is a strong opportunity here for further automation based on the analysis of the data obtained above. Chatbots and Browser Notifications are just a couple of newer technologies we will be exploring to make this process even better!