Indirect procurement, also known as indirect spend management, is a process that many businesses use to manage their expenses. This process can involve anything from invoice management to supplier management. By using an indirect procurement system, businesses can save money and improve efficiency. In this guide, we will discuss the basics of indirect procurement and how your business can benefit from it!
The first step
The first step of indirect procurement is invoice management. This involves tracking, approving and paying invoices from suppliers. It also includes ensuring that the correct quantity and quality of goods are received on time and at the right price. When done correctly, this will help to reduce costs, eliminate waste, and ensure that payments reach their intended recipients.
The next step
The next step is supplier management. This involves selecting suppliers that can provide the best quality products and services at the most reasonable price. Businesses should also look for a supplier who has a reliable track record of on-time delivery, good customer service, and a commitment to maintaining ethical standards.
Once a business has identified the right suppliers, indirect spend management requires that the business track and monitor their spending with those suppliers. This can be done through software programs like procurement dashboards or analytics tools, which provide detailed insights into a company’s indirect spend data. By analyzing this data, businesses can identify areas of improvement and take steps to optimize their indirect procurement processes.
The last step
Finally, indirect procurement also involves contract management. This is the process of negotiating contracts with suppliers and ensuring that they are followed on an ongoing basis. It also includes managing any changes to the contract, such as price or delivery time adjustments.
Indirect procurement can be a complex and time-consuming process, but it can provide many important benefits for businesses. By using an indirect procurement system, businesses can save money and improve efficiency. They will also have more control over their supplier relationships and indirect spending, which can help to reduce costs in the long run. With this guide, you should now have a better understanding of indirect procurement and how it can benefit your business.