E-Procurement in B2B Business
For a smooth and seamless B2B business, an efficient, central management system is necessary. Here’s where E-procurement comes into play. The world of business is undergoing a radical change. With digital slowly becoming the norm, business models are getting disrupted everywhere. The manual mode of business is getting old school and is frowned upon nowadays. Online is now pegged as the future and business experts are putting their stamp of approval on this new wave of change.
Companies are slowly shifting their businesses online to be on the crest of this change. Commerce between businesses conducted electronically has opened a raft of opportunities and eased the way of doing businesses. B2B businesses are a glaring example of that. One of the most important facets of B2B business models is E-procurement. E-procurement is the foundation of the B2B business.
It refers to the process of purchase and sale of goods and services through the internet. This business model helps to curb irregularities in business and reduce operating costs. Most E-procurement happens through dedicated E-procurement software platforms where registered users can browse and buy goods and services.
Major Steps Needs to Followed During E-procurement
The first step involves recognizing the need for a product and understanding the specifications of the products and services that are needed. It follows with identifying the place where to obtain them and then placing a request.
The request placed is cross-checked by the approval department to ensure that there is a need for the requested product or service and that the request does not violate any existing contracts. The costs are also checked.
After the request is approved, the purchase order is created and it is sent to the chosen suppliers.
4.Receipt and Inspection
The goods arrive and are inspected by the inspection team. They are either accepted or rejected depending upon the circumstances.
5.Approval of Invoice and Final Payment
The payment is made. But before that the invoice and items should be checked thoroughly so that they tally with each other.
A record of the purchases is kept for warranty, tax information and future reference.
Benefits of E-procurement in the B2B Industry
With the evolution in technology, businesses are updating themselves to keep up with the consumer demand and stay competitive. One of the main reasons businesses have embraced E-procurement is to increase productivity, provide greater visibility in day-to-day transactions. Let us see the benefits of E-procurement.
With an E-procurement system in place, unnecessary spending is curtailed. By having smooth and structured supplier relationships and improving the procurement system, external spending is considerably reduced. As a result, quality and supplier performance gets a lift. E-procurement also gets rid of paperwork, rework and errors.
In an enterprise procurement system, workflow happens seamlessly. All transactions are tracked through a centralized tracking system which shows an exclusive report on requisitions, goods purchased, orders processed and payments made. One can even share the whole procurement dashboard with other team members for better reach of procurement information within the company.
E-procurement system enables safe and secure business relationships with vendors and helps you choose the most trusted suppliers out there. A good procurement system contains business records which give procurement managers and B2B buyers an insight on which vendors or suppliers to go for.
E-procurement system makes use of superior technology including software tools (for ex: procure-to-pay software) for creating proper procurement documentation.
E-procurement is slowly becoming the soul of every B2B business. As businesses are getting digitized and automated, the need for highly efficient management systems such as E-procurement is on the rise. Companies are now focusing on flexibility, usability and automation of their systems to simplify all processes which only an E-procurement system can deliver.