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Procurement Vs. Purchasing – What’s The Difference?

Although the words are used interchangeably more often than not, procurement and purchasing are not synonymous. First, let’s take a look at their definitions:

Procurement: The act of obtaining or buying goods and services. The process includes the preparation and processing of a demand as well as the end receipt and approval of payment. (Source: BusinessDictionary)

Purchasing: The activity of acquiring goods or services to accomplish the goals of an organization. (Source: BusinessDictionary)

Purchasing is Part of the Procurement Process

Purchasing is actually just a subset of procurement. Procurement includes purchase planning, standards determination, specifications development, supplier research and selection, value analysis, financing, price negotiation, making the purchase, supply contract administration, inventory control and stores, and disposals and other related functions.

Purchasing refers simply to buying goods or services. Purchasing often includes receiving and payment as well. The steps specifically related to purchasing cycle are:

The Need. The need for the purchase should be tightly defined and specified.

Financial Authority. This step usually includes the management of the department that requires the goods.

RFP. A Request For Proposal (RFP) is written that goes into the details of the need.

Invite Tenders. This is a formal process that often includes posting the request in trade magazines and appropriate websites or on government websites for a government project.

PQQ. A Pre Qualification Questionnaire (PQQ) is sent out to a short list of appropriate suppliers.

Tenders. The tenders are sent in from the qualified suppliers.

Qualifying. Qualifying meetings are held to clarify any questions.

Evaluation. All the tenders are evaluated and the requirement awarded to the winning bidder.

Negotiation. The fine print of the terms and conditions are negotiated with the chosen supplier.

Contract Award. The contract is awarded to the chosen bidder.

Manage Contract. This is the period in the purchasing cycle when the goods are delivered.

Approval and Payment. If the contract is carried out completely then full payment is made.

Sign Off. At the end of the contract work and deliveries, the contract is signed off and all relationships with the supplier are finished.

Update Of Records. The purchasing ledger and stock records are updated.

A strategy is a Differentiator

Procurement requires a high level of knowledge and experience to implement effectively. Because of this, it really should be considered a core part of any business’s corporate strategy.

An effective procurement strategy should include the following seven steps:

Conduct an internal needs analysis. You will need to benchmark current performance and identify where you would like your procurement strategy to improve. This process includes collecting several different types of data. Read our blog Tips to Understand Procurement Spend for more details.

Conduct an assessment of the supplier’s market. The procurement team should research the market and identify potential locations and vendors that are feasible sources of the required raw materials, components, finished goods, or services.

Collect supplier information. This step in the process should be taken very seriously because a supplier’s inability to meet selection criteria can result in significant losses for the organization. The procurement team should do a thorough evaluation of each supplier before making selections.

Develop a sourcing/outsourcing strategy. Based on the information previous steps, the procurement team should develop a sourcing/outsourcing strategy. This will be dependent on the competitiveness of the supplier marketplace and the sourcing/outsourcing organization’s risk tolerance, overall business strategy, and motivation for outsourcing.

Implement the sourcing strategy. Sourcing strategies that involve the acquisition or strategic partnerships are major undertakings. For a direct purchase, organizations may begin with an Expression of Interest, solicit bids from identified potential suppliers as part of a bidding process.

Negotiate with suppliers and select the winning bid. The procurement team must evaluate responses from suppliers and apply previously-developed evaluation criteria. From there, they will enter contract negotiations with the bidders.

Implement a transition plan or contractual supply chain improvements. When switching suppliers, it’s important that your procurement team creates a strong transition plan and develops Key Performance Indicators that the new supplier is expected to meet. This will help your team to measure their success.

Procurement and Purchasing Are Both Valuable

Because purchasing is a process within procurement, the terms are often used interchangeably. It’s important for business executives to be knowledgeable of the difference between the two and the value of having a procurement strategy

Source:- https://bioprocure.com/procurement-vs-purchasing-whats-difference/

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Order Management: What Is It And Why Is It Important?

Order management may seem like a simple term, but what does it really mean? And why is it so important? Many business owners are unsure of what order management includes, so let’s take a closer look and get a better understanding.

What is Order Management?

To put it simply, order management is the process of keeping track of orders, the processes and people needed to fill those orders and managing the customer data for the order. Order management handles everything from receiving the order to delivery and post-delivery customer service relations. Without order management, a business can easily become overwhelmed by orders or struggle to fill them correctly.

The first step to proper order management involves keeping track of inventory on hand versus orders taken in to make sure you don’t take on more orders than you can fulfill. After orders are received by customer service representatives, they must be filled and shipped out. This means that order management requires communication between the warehouse, shipping department, order intake representatives, management, and more. Notes should be kept for each client that places an order and detail if the client is large or small if they pay on time, and how they pay. The accounting department is involved in all of these processes, so that’s yet another department to keep track of.

With all of the different moving pieces at hand, it’s easy to understand why many businesses find order management to be stressful and time-consuming.

Why is Proper Order Management So Important?

As you can tell from the extensive list of departments involved in proper order management, there’s plenty of room for error. If one thing falls between the cracks or isn’t properly documented, it could be a disaster for your order fulfillment rates and customer satisfaction. The inability to fulfill orders, getting orders shipped or delivered later than expected, and not properly receiving pay are all possibilities with poor order management systems. An estimated 65% of customers don’t use a business again after just one negative encounter.

Ultimately, maintaining good order management practices means maintaining your customer base that drives your business. Successful order management will keep your customers, finances, and overall business model working as smoothly as possible.

How Can You Make Order Management Better for Your Business?

Now that you know more about what order management is and why it matters, you’re probably wondering what you can do to make it work for your business. The answer is simple – use a professional. Companies like BioProcure are experts at order management systems and processes. Using a professional company or service to handle your order management will ensure there are no errors made and take the pressure off of you! You’ll quickly notice the difference in the efficiency and reliability of your order management systems when you make the change to a company that is experienced in handling all of your order management needs. Order management can be stressful, but it doesn’t have to be.

Source:- https://bioprocure.com/order-management-what-is-it-and-why-is-it-important/

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Accounts Payable For Non-Accountants

Accounts payable is a term that we must understand in order to be effective procurement professionals, and that all executive team members must understand in order to successfully run a business. In simple terms, accounts payable is a record of what the company owes in terms of payments owed to others, such as suppliers and service providers.

Accounts payable has a credit line that matches the balance owed, similar to a credit card. Money is spent under the agreement that the money will be paid back in full. This means that the total accounts payable liabilities should equal total amount of credit and the accounts payable and the balance sheets should be the same.

Accounts Payable Must-Haves

Unless you’re an accountant, you likely aren’t familiar with the most commonly used accounts payable terms. Fortunately for you, we have listed and defined them below.

Vendor Name: The person or company to whom you owe money.

Account Number: The company’s billing account.

Invoice Number: Identifying number associated with the prepared invoice – very important.

Expense Type: Category of expense (i.e. technology, office supply, marketing, etc.)

Invoice Receipt Date: The date that you received the goods/service.

Payment Deadline: The last day to pay before late consequences may occur.

Status: Statement regarding whether the invoice has been paid, is pending, is late, or is in the process of being reviewed.

Accounts Payable Made Easy

Don’t have a team of expert accountants at your company? Not a problem. We work with many companies that are growing quickly and don’t necessarily have a dedicated team to fulfill this role. Here are some simple ways that experienced employees at your company can create an accounts payable record.

First and foremost, every invoice, billing statement, or accounts payable record should follow a standard format. You will want (and need) to make sure that all of the documents include every accounts payable essentials listed above including vendor name, account number, invoice number, expense type, invoice receipt date, payment deadline, and invoice status.

Next, accounts payable should be filed under your company’s general ledger under “liabilities.”  Whenever your company receives and invoice or received goods or services, accounts payable should be debited while the related expense account will be credited. Accounts payable should track the following types of documents: purchase orders, invoices from vendors and suppliers, contracts and payment terms, and any other agreements with vendors and independent contractors. If you follow these simple steps, then your accounts payable should be easier to maintain, resolve, and balance than you expected!

Why Does This Matter?

Good question. There are many reasons why accounts receivable is important. Naturally, it’s critical to track the money your company owes to vendors and contractors in order to pay them on time and to budget properly. Responsible tracking of accounts payable ensures that companies can avoid late fines and taking hits to its credit score. Perhaps most importantly, responsible accounting helps prevent overpayment and fraud and ensures that companies keep the credibility needed to maintain professional working relationships with vendors and contractors.

There are also benefits of managing accounts payable effectively related to procurement. Accounts payable is typically associated with the financial side of the business whereas procurement is associated with the operational side. Although they are associated with different sides of the business, they co-manage a single process and can both benefit from greater collaboration. Procurement buys goods and services for an organization, and then AP pays for them. Effectively managing accounts payable will only serve to benefit your procurement program.

Questions? Speak with one of our procurement specialists.

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Automation In Procurement

https://bioprocure.com/automation-in-procurement/

An Ernst & Young study found that finance departments are 80% ready for automation. Practically, this is converting a report built in Excel from three sources to a report that an ERP system generates automatically. The benefits of automation include more accurate financial data, more thorough financial reporting capabilities, and time savings from more efficient processes. Biotech organizations can achieve these benefits in the purchasing and payables process through the use of an optimized system such as BioProcure. Below are a few benefits of automating the procurement process:

Maintain one list of financial source data: data such as GL accounts, vendor lists, departments, and programs can be synchronized between systems, allowing users to maintain this data in one system instead of multiple systems. When finance departments have to maintain this data in multiple systems, time is wasted entering data multiple times.

Approvals completed electronically: process owners can approve invoices electronically at their convenience, benefitting both accounts payable and process owners. Avoid wasted time chasing process owners and remove the risk of lost invoices on someone’s desk. With an electronic signing process, there will always be a record of the status of every invoice. In addition, keep an electronic audit trail of approvals for internal control testing.

Electronic documentation of the three-way match: keep electronic copies of the PO, packing list, invoice and check in the ERP system. Access these source records remotely without needing to dig through paper files. Save time by easily sharing accounts payable audit selections electronically instead of tracking paper copies.

Better visibility into financial results: If systems are optimized to share data, data can be reviewed in both systems. You can know if an invoice was paid in your procurement tool and you can review the requisition related to a check in your ERP. Avoid needing to toggle between two systems to track down if an invoice has been paid or not.

As finance teams are asked to do more with less, finding opportunities to automate processes will be critical. To find out how BioProcure can help your finance organization gain automation benefits in your purchasing and payables process, please contact the BioProcure team.

Source : https://bioprocure.com/automation-in-procurement/

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Top Three Ways Outsourced Procurement Saves Businesses Money

If your company grows, procurement demands will inevitably grow beyond the ability of your current staff and the costs of managing procurement in-house continue to rise. Although procurement is not always a core competency within a business, it is one of the most demanding aspects of any business. If a business’ procurement processes are ineffective, research and production can be brought to a halt. Even worse, the company could end up not being profitable.

This is why outsourcing procurement should be a serious consideration for all businesses. On top of expediting purchasing processes and getting the best deals, outsourced procurement can save you money. Below, we have highlighted three ways outsourced procurement saves businesses money.

1. It allows staff to focus on research and product development

Many companies, specifically startups, and smaller companies, will task particular employees with procurement responsibilities. Often, startups and smaller companies do not have the resources to create procurement departments or to hire dedicated procurement employees. Even if they do, they usually don’t have the in-house knowledge to properly oversee the procurement staff and determine the effectiveness of the in-house procurement.

This can cause significant problems that slow down productivity. For example, busy or inexperienced employees may forget to order essential products or order too much or too little of something, slowing down business for weeks at a time.

Outsourcing procurement allows companies to reduce the amount of time their researchers and scientists spend on doing work that isn’t their primary area of expertise. Most importantly, they save money by having procurement professionals expedite processes, guaranteeing that researchers and scientists have what they need to enhance research and increase product development.

2. It is more cost-effective than having in-house procurement staff

It may sound appealing to hire in-house procurement staff. This does not often prove to be a cost-effective method to address procurement, though, for multiple reasons. 

In order to address all aspects of your business’ procurement needs, a company likely needs more than one employee. The costs of hiring internal purchasing agents include salary, benefits, taxes, office space, computer, relevant software, and more will be a significant investment.

This also means undertaking the process of multiple hirings and onboardings. Businesses lost money during the acclimation period. It typically takes upwards of a year before new employees catch up and become efficient at their jobs. Additionally, there is almost no way to predict the costs that come from inefficiencies due to inexperience.

If your company grows, procurement demands will inevitably grow beyond the ability of your current staff and the costs of managing procurement in-house continue to rise.

Outsourced procurement resolves all of these issues before they start. Businesses that hire outsourced procurement save money that they would have spent on recruiting and training multiple employees and have ease of mind knowing that they have a team of procurement experts addressing their growing business’ needs.

3. It provides access to procurement experts

Efficient procurement requires a level of expertise and attention to detail that procurement specialists take years to acquire. It involves conducting thorough research, overseeing logistics, finding lower costs for goods and services, developing vendor relationships, streamlining inventory, and an experienced management team.

Outsourced professional procurement experts look for savings opportunities everywhere they can. It is their job to study every angle of your business to help you save on operational costs.

Outsourced procurement professionals will analyze your current suppliers, the number of supplies you order and actual usage every month. They will also determine the quality of the supplies, based on their vast experience working with a variety of suppliers, and negotiate the best price for the supplies.

Interested in learning more? Speak with one of our procurement professionals about how you can save your business money.

Source:- https://bioprocure.com/top-three-ways-outsourced-procurement-saves-businesses-money/

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By outsourcing the functions to a professional procurement services provider, one can ease the procure to pay services and improve operational efficiencies. Read these benefits of hiring a professional procurement services consultancy.

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Gain Strategic Advantages In The Biotech Industry With Professional Procurement Services

Increase Operational Efficiencies 

In an ideal world, biotech organizations would have full–service purchasing and AP departments. In reality, most of the emerging biotech startups have scientists and a small administrative staff to handle purchasing and accounting, taking time away from the core operational work and vital research in the lab. Outsourcing these functions to a professional consultancy can help streamline the procure-to-pay process, improve operational efficiencies, and accelerate research and development.

Biotech organizations operate in a dynamic environment influenced by unique challenges and opportunities. Procurement is a team effort that involves various departments including scientists, purchasing and finance professionals. To reduce costs, many startups and emerging companies rely on scientists and lab managers to procure essential supplies required for research. Tasks such as creating supplier accounts, getting approval from managers, finding quality products at the best prices, applying for credit, placing and tracking orders keep scientists away from valuable research in the lab. One solution for this is to outsource the work to a professional provider that focuses on efficiency in procure-to-pay and customers support.

Streamline Procurement Process

A company offering procurement services can help biotech organizations streamline the procure-to-pay process, implement internal controls and ensure the organization is ready in the event of an audit. With accelerated order transaction times, biotech organizations can ensure that procurement is done in a swift and efficient manner. A company offering procure-to-pay services has dedicated teams with expertise and experience in ensuring clients receive an uninterrupted supply of critical products required for research

Cost Savings

Outsourced procurement for biotech relieves scientists of negotiating, applying for credit, placing and tracking orders.   Small Finance teams can benefit from services such as data entry and matching scanned receipts and invoices to POs. The addition of an inexpensive cloud-based e-procurement solution completes the procure to pay process by connecting research, purchasing, and finance teams for a seamless workflow.  With scalability, spending approvals and liability reporting, biotech organizations can streamline the process, optimize savings and integrate with ERP system.   By outsourcing procurement and AP clerical tasks, an organization can reduce backend headcount, gaining an edge over the competition to bring the product to market more quickly. 

Source:- https://bioprocure.com/gain-advantages-biotech-industry-professional-procurement/  

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Tips To Understand Procurement Spend

BioProcure offers strategic sourcing and procurement services. To achieve this goal BioProcure Team follows these steps like collect sources, Collect data, Categorize spend, according to all these steps they take action to give you the best results. For more clear view please visit our website.

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Everything You Need To know About E- Procurement

In a time when the world lives online, people have begun to utilize virtual communication in both their personal and professional lives. Communication isn’t limited to video conference calls or emails with family and friends though. In fact, communication between suppliers and customers is a topic more businesses are showing interest in. This online communication between suppliers and customers is known as e-procurement. E-procurement improves efficiency, accuracy, and overall customer satisfaction while saving both parties money along the way, but it’s a topic that still leaves many people scratching their heads.

What is E-Procurement?

Before we dig deeper into the benefits of e-procurement for businesses, let’s take a look at what exactly it is. E-procurement involves taking the traditional procurement process and digitally enhancing it for both the supplier and customer. That means that all parts of the procurement process, from order placement to checking invoices, are performed digitally.

How Does E-Procurement Benefit the Customer and Supplier?

One of the most notable benefits of e-procurement is the improved relationship between supplier and customer. That improved relationship can be credited to a few things, including:

Easier communication from supplier to customer

Online data sharing to improve accuracy of order information

Cost saving for both the supplier and customer

Online options for quotation requests, order changes, and online bidding

Clear view of the procurement process for the customer allows them to see where their money is going

Utilizing E-Procurement

If the benefits found in e-procurement sound like something that would work well for your company, the next step is choosing an e-procurement software. There are many different options on the market when choosing an e-procurement software. Some are packed with features that would be best utilized by a large corporation, while others are simpler and a better fit for small to medium-sized businesses. Before trying to choose which software is right for your company, speak with your team to agree on these key points:

Determine what your business needs realistically are

Define what your key procurement and business processes include

Create a list of what security features are the most important to your company

Once you’ve answered those questions, it’s time to look at different e-procurement software available on the market. Some software will allow you mobile access from a phone or tablet, some may track travel expenses, and others will offer real-time analytics for you to view. After viewing multiple software options you can determine which software best meets your budget while offering all of the services needed to improve your procurement experience.

What is the Future of E-Procurement?

Since e-procurement began in the 1980’s the technology has come a very long way – but where is it going from here? As with any technology, there’s always room for improving the e-procurement process for both suppliers and customers. The focus is expected to be placed on making the software more mobile and accessible for users on both ends of the process. Ultimately, the software will become more user-friendly and require less training time for employees. Cloud-based e-procurement software will be the key to improving both accessibility and ease of use for suppliers and customers alike.

As this software develops and improves with time, we’ll likely see many more companies taking their procurement and reporting processes online. Small businesses and huge corporations alike have the ability to save time and money, allowing them to better utilize the resources and staff they currently have, through the help of e-procurement. This definitely hasn’t been an overnight online phenomenon but the rapidly growing popularity of e-procurement software shows no sign of slowing down anytime soon – now is your time to become part of the procurement revolution or be left behind with outdated processes!

Source: https://bioprocure.com/everything-you-need-to-know-about-e-procurement/

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3 Hot Procurement Topics

Procurement may not seem like the most exciting topic in business, but there are some new trends that are worth talking about. Whether you’re an experienced company or a new start-up, there’s always more you can do to improve your procurement process. At BioProcure,  we’ve simplified and optimized the procurement process to bring the newest hot procurement topics to you. We’re constantly working to utilize new ideas in our procurement process, but these are a few of the best procurement methods we’re using right now.

E-Procurement

In a time when the world lives on the internet, why should procurement be any different? E-procurement is rising in popularity thanks to the easy organization, enhanced control, and quick processing that it offers. At BioProcure, we offer e-procurement services to meet all of your business needs at a cost-efficient price. E-procurement is easy to use, update, and integrate into the systems you already have in place! Not only will this new procurement method reduce the number of mistakes during the procurement process, but it will also allow your employees to spend more time on other important tasks.

Outsourcing Procurement

Outsourced  Procurement is another new trend in procurement aimed at saving your company time and money. By allowing your procurement needs to be outsourced to an expert team of professionals you’ll begin to see instant results on your end of the company. Outsourcing procurement will result in cost saving, improved communication throughout the procurement process, better information management, purchasing analysis, and so much more. When you outsource your procurement needs you’ll have the ability to utilize employees for more important tasks while having a better sense of management and direction for your procurement process.At BioProcure, we offer outsourced procurement options that you could begin using today.  Making the transition from traditional procurement to outsourced procurement will give you the peace of mind that each of your orders I delivered to clients on time for the best price possible.

Procure-to-Pay

The procure-to-pay cycle will help you to ensure that you aren’t overpaying for goods or paying for goods and services you haven’t received. Utilizing the procure-to-pay process effectively will allow your company to build lasting relationships with suppliers and improve profit margins. The steps needed for a successful procure-to-pay cycle include:

Planning – of course, your company needs to plan and determine what they need, when they need it, and what price they can afford to pay.

Compare Prices – next, you need to find the best price possible. Start by creating a list of possible vendors, contact each of those vendors and tell them what your needs are, followed by a quote for those services or goods. Remember, the cheapest vendor may not always be the best choice. Look at the quality of the product, warranty information, the terms of delivery, and the variety of their offerings before choosing a vendor.

Send an Order – prepare a purchase order to send to the vendor of your choice, be sure you keep a copy of the purchase order for yourself too.

Double Check – once your order is received, you’ll need to check the purchase order with the goods receipt. If everything matches up, then payment should be sent to the vendor.

The procure-to-pay process is a great way to keep track of your ordering and cost, but it can be very time-consuming. BioProcure offers a variety of procurement services to make that process easier and avoid errors. 

Visit our site here to find out more about how BioProcure can help you today.

Source:

https://bioprocure.com/3-hot-procurement-topics/

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BioProcure offers procurement and AP support services which are vital during the Biotech Start-Up phase. Affordable automation of the purchase-to-pay

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Procurement Services

BioProcure provides best procurement services for ensuring that all supplies, materials, equipment and services. To know more, visit here: https://bioprocure.com/services/

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Best Purchasing Services for Life Sciences

BioProcure is a leading provider of Purchasing Services, procurement consulting, services & dedicated outsourcing for Life Science companies. To know more about best purchasing services for life sciences call us at 8887109996.

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Purchasing Services for Life Sciences

Are you looking for Purchasing Services for Life Sciences?  BioProcure offering services to help biotech research companies and life science organizations. To know more call us at (888) 710-9996. 

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Outsourced Purchasing for Biotech

Procure to Pay Solution  is the purchasing company's This portal provides information for all Outsourced Purchasing for Biotech more on : http://bioprocure.com/services/