In the first two parts of our CFO Series, we discussed how effective purchase order (PO) lifecycle management can eliminate excessive buffer stock and protect revenue. In part 3, we examine how it can reduce the burden of labor-intensive procurement processes and slash the time and effort needed for routine tasks that distract from strategic execution.
Risk is on the Rise
There’s no escaping the reality that modern-day procurement is complex. A wide range of factors, including globalization, digital transformation, sustainability concerns, and regulatory requirements, aren’t exactly making things any easier. At the center of all of this is people, and putting your teams in a position to succeed is foundational. This is particularly important for procurement, where a team’s level of experience translates directly into its ability to make informed decisions and navigate complex supplier relationships. But procurement teams also see high turnover rates, where demanding workloads and the pressure of managing costs (as well as supplier relationships) are compounded by a litany of mundane tasks and manually chasing down critical PO changes.
The good news is that organizations can solve these two problems – productivity and job satisfaction – relatively easily with an effective PO lifecycle management strategy. SourceDay automates these labor-intensive processes, reducing the time and effort required for tasks like PO creation, approval workflows, and supplier communication. Here we take a closer look at some of the benefits of SourceDay that translate directly into reducing inefficiencies for procurement teams. This also translates into direct benefits to finance and accounting departments as well. Accurate PO information reduces the time to process supplier invoices by as much as 70% or more as manual verification is no longer needed and advanced reports can be generated to assist with the period-end close process.
Centralized, Straightforward Communication
Effective collaboration with suppliers is at the heart of SourceDay’s mission, and if you’ve read the first two parts of this series, then you understand that we see buyer/supplier communication as the linchpin for effective PO lifecycle management. Part of the reason why is that PO changes are never-ending, and the consequences of not managing them effectively range from small administrative headaches to delivery misses that cause reputational damage. Sourceday provides a proprietary centralized platform for closed-loop supplier interactions, ensuring that all communication is clear and transparent. Suppliers can update order statuses, respond to changes, and address issues directly within the platform or through email according to their preference. This reduces the need for constant back-and-forth emails and phone calls, saving valuable time for both buyers and suppliers without any changes or disruptions to normal workflows. SourceDay is also free for suppliers, with no onboarding or training needed so adoption is painless.
Real-time communication and automated notifications eliminate the maddening delays that come from waiting for acknowledgment and approvals. This has a direct impact on reducing long lead times that can tie up labor resources and slow down production. Faster processes mean more productivity, proactive management, and much higher job satisfaction.
Eliminating Risk through ERP Data Accuracy
Simply put, PO lifecycle management is risk management, and up to 70% of inbound supply chain issues happen prior to shipment. In part 2 of this series, we discussed the importance of reliable ERP data and how access to accurate, real-time information is essential for making informed decisions and optimizing labor usage. Bad data leads to errors in order processing, translating directly into significant labor inefficiencies because it often means spending hours manually chasing down the latest information or combing through spreadsheets and emails to correct mistakes. SourceDay reduces the risk of errors by providing accurate, real-time data and transforming costly, manual, and error-prone tasks into precision workflows. This ensures that orders are processed correctly the first time and in real time, minimizing the need for rework and allowing employees to focus on more productive tasks.
The combination of these two elements— a single source of truth for collaboration and de-risking PO lifecycle management—lays the foundation for streamlining all kinds of manual processes beyond procurement as well, bringing predictability to areas once rife with risk, including:
- Automating invoice matching is another labor-intensive process that SourceDay can simplify. The platform automates the matching of invoices with purchase orders and goods receipts, reducing the time and effort required for this task. This automation not only saves labor hours but also reduces the risk of errors and discrepancies, ensuring that invoices are processed accurately and promptly.
- Facilitating Remote Work – Employees can access the platform from anywhere, enabling them to manage procurement processes and supplier relationships without being tied to a physical office. This flexibility can lead to better utilization of labor resources, as employees can work efficiently from any location.
- Enhancing Compliance and Risk Management – Compliance and risk management are critical aspects of supply chain management that can consume significant labor resources. SourceDay helps streamline these processes by providing tools for monitoring supplier compliance and managing risks. Automated alerts and reporting features ensure that potential issues are identified and addressed promptly, reducing the labor required for manual compliance checks and risk assessments.
The reality is that the tools exist today to completely eliminate much of the drag manual processes have on your teams, and in our experience, more efficient teams are happier teams. Through effective use of automation and real-time data, you can empower your organization to make smarter decisions and optimize resources.
Up Next
In part 4 of our CFO series, we’ll dive deeper into how SourceDay can help maximize your supplier relationships without disrupting your existing management process.
