Procurement management is the process of acquiring the supplies and services needed to perform business operations. It involves multiple steps, including negotiating contracts, monitoring budgets, and processing invoices.
This article will discuss procurement management’s importance, its benefits to your business, and how to make the process more efficient.
What is procurement management?
Procurement management refers to the process of working with external sources to acquire supplies and services, including raw materials, warehouse equipment, application tools, or third-party services.
The exact procurement management process looks different within every company. For example, procurement can be the purely functional activity of facilitating purchases, or it can take a more strategic approach that involves identifying ideal supplier outsourcing models.
No matter what role procurement management plays within a company, its goal is to provide various project teams with the resources needed to operate effectively, while also maximizing the value of overall spend.In the long run,procurement management directly impacts the company’s bottom line and competitiveness in the market.
Why is procurement management important?
Aside from ensuring all essential products and services are supplied to a company, procurement management provides a number of other important benefits.
A good procurement management strategy supports two of the most critical areas of operations: supply chain
and financial management.
Procurement management is closely linked to broader supply chain operations, handling the internal matters that enable logistics and manufacturing to take place. It is responsible for upholding high quality standards, building supplier relationships, and securing favorable terms to get the optimal value for money.
By guaranteeing the reliable supply of resources, procurement enables companies to streamline supply chain operations, from production planning to shipping fulfillment, and successfully meet market demand.
Along the same lines, procurement is uniquely positioned to help reduce order costs and increase cash flow. For example, procurement teams can negotiate with suppliers to get better prices for larger orders or longer-term procurement contracts. This frees up working capital that can be invested in business development.
Companies looking to expand can also leverage procurement to diversify suppliers or explore supplier relationships in new geographies.
Ultimately, by facilitating the supply chain and maximizing resources, a procurement management plan helps companies improve overall operations and gain a competitive advantage.
Benefits of strategic procurement operations
Given procurement’s integral function within a company, a more proactive approach can help reap the maximum benefit. Here are a few benefits that come from building strategic procurement operations:
Faster sourcing process
A large part of the procurement process is spent on strategic sourcing for goods and services. Developing a standard workflow to evaluate potential suppliers speeds up procurement timelines and defines an approved list of trusted third-party partnerships.
Better resource utilization
Being mindful of how procurement currently operates often uncovers areas for improvement. For instance, there may be underutilized resources, redundant efforts, or discrepancies and inefficiencies across team members. A supply chain or inventory management system can easily track end-to-end procurement so managers can identify the best opportunities for a more cost-effective process.
Less wasted expenditure
Better resource utilization usually leads to less waste. A strategic procurement approach aligns the entire supply chain and effectively consolidates all expenses. With a dedicated business management platform that centralizes every purchase, procurement teams are able to combine orders and deliveries for increased cost savings. It also becomes easier to spot any maverick spending or unapproved purchases that are outside of approved contract lifecycles.
More secure supply chain
Maintaining oversight into procurement can help procurement professionals get ahead of any last-minute disruptions, such as out-of-stock supplies or logistical issues. While it’s impossible to remove all risks when dealing with external parties, a strong procurement strategy should include alternative suppliers and contingency plans to guarantee supply chains are continuously operational.
How to make procurement efforts more efficient
With all the activities and teams involved in procurement, there are a number of ways to streamline the management practice. The following are some recommended steps to make procurement activities more efficient:
Standardize your procurement process
Procurement requires a significant amount of paperwork and approvals. Simplify the process for stakeholders by outlining all the steps needed to go from the initial request for proposal (RFP) to final supply delivery. If possible, provide templates and guidelines on what types of purchases will be approved. This initial effort can end up saving everyone time in the long run.
Automate routine tasks
Using automations to handle repetitive tasks not only saves time, it also prevents accounting errors, misplaced paperwork, and other mistakes common to manual processing. Automations increase efficiency throughout procurement and free up the team to work on more important tasks, such as negotiating contract terms and planning supply strategies.
Centralize all third party information
Working with even a single supplier involves multiple touch points, documentation, and other details. This only compounds in time, especially as companies expand their third-party network.
To keep tabs on all the important information, it’s best to use a business management platform that organizes all the supply details and makes it easy to filter and access across teams.
Use software to track and improve processes
Most procurement teams rely on supply chain or order management software to keep track of movements throughout the supply chain. All procurement requests and documents are recorded and updated in real time. By collating all information in one place, procurement management systems improve accuracy across operations and make it easier to draw insights that improve inventory forecasting and future planning.
Final thoughts
An effective procurement management initiative ensures a company’s needs, including all supplies and services, are available on time to operate effectively. It’s a critical part of the financial and supply chain management process, ensuring that a company remains profitable and can meet market demands over time.
With so many steps involved in project procurement management, automating routine tasks and reviewing critical information is necessary to optimize the process continuously.
This article originally appeared on the QuickBooks Resource Center and was syndicated by MediaFeed.org.
More from MediaFeed:
18 loans for Hispanic-owned businesses
There are nearly 5 million Hispanic-owned businesses in the U.S., making this the fastest-growing segment of U.S. small businesses, according to the U.S. Small Business Administration (SBA). Yet, despite these big numbers, Hispanic and Latinx business owners frequently face challenges accessing capital and, as a result, often can’t successfully scale their businesses.
Fortunately, a number of organizations and government agencies in the U.S. are stepping up to address this unmet need, offering loans, grants, and other financing options to Hispanic and other minority entrepreneurs. These minority business loans may have lower interest rates and be easier to qualify for than some traditional loans. Here are 18 financing options that are worth checking out.
(Learn more: Personal Loan Calculator)
PeopleImages/istockphoto
To qualify as a Hispanic-owned business, more than 50% of the company must be owned by people of Mexican, Puerto Rican, Cuban, or other Hispanic origin. Currently, nearly one in four businesses are Hispanic-owned.
andresr/istockphoto
A minority business loan is a small business loan designed to provide financing options for underserved communities. While minorities are free to apply for any business loan, minority business loans may offer more competitive rates and have less stringent qualification requirements.
Groups that are considered minorities in the U.S. include African Americans, Asian Americans, Hispanic Americans, and Native Americans. Women are also considered minorities for many types of loans, as well.
FreshSplash/istockphoto
The following lenders offer different types of small business loans to Hispanic and minority entrepreneurs and were chosen based on our analysis of search volume.
1. Accion
Accion is a nonprofit financial institution that invests in underserved communities and offers low-cost lending opportunities to Hispanic- and minority-owned businesses. The Accion Opportunity Fund provides loan amounts from $5,000 to $100,000, and is quick and easy to apply for online.
Accion offers two types of small business loans — the Southern Opportunity and Resilience (SOAR) Fund and the Small Business Progress Loan. SOAR is geared toward those in the south and southeast who experienced economic hardship from the COVID-19 pandemic and have been in business since September 2019 or earlier. The Small Business Progress Loan, on the other hand, is open to all minority-owned businesses and women entrepreneurs, and is partnered with American Express.
Accion also offers online resources, events, and networking opportunities (in Spanish and English) to help minority business owners learn and grow their companies.
(Learn more at: Home Affordability Calculator)
Delmaine Donson/istockphoto
The Community Development Financial Institutions Fund (CDFI Fund), which is part of the U.S. Treasury, gives funds to companies and organizations that help underserved people and communities. Minority business owners can reach out to local banks and nonprofit groups that have received CDFI funds to discuss and apply for low-cost business loans.
JohnnyGreig/istockphoto
The owners of Camino Financial were inspired to start their lending business in order to help people like their mother, who lost her Mexican restaurant business when they were children. To that end, they offer simple and affordable loans to small businesses who find it difficult to borrow through banks. They offer bad credit loans, secured and unsecured loans, microloans, and working capital loans up to $35,000. To qualify, your business must have been in operation for at least nine months and generate annual sales of $30,000 or $2,500 a month.
monkeybusinessimages/istockphoto
The U.S. Small Business Administration (SBA) offers several financing programs that can help minority-owned businesses get access to the funding they need. Here are two programs you may want to check out to find a Hispanic small business loan:
Microloans
The SBA microloan program is administered by an intermediary network of nonprofit community-based lenders, rather than traditional banks. Through these lenders, the SBA aims to reach lower-income communities and minority-owned businesses that are often overlooked by traditional lenders. These loans come with low interest rates, six-year terms. and loan amounts up to $50,000.
Community Advantage Loans
The SBA’s Community Advantage loan program provides up to $350,000 in capital and is specifically designed to meet the needs of business owners in underserved communities. To qualify for an SBA community advantage loan, business owners need to have good credit and a strong business plan. However, the business’s balance sheet and amount of collateral will not affect eligibility.
mapodile/istockphoto
By offering crowdfunded loans with 0% interest, nonprofit Kiva is working to lift barriers to capital often faced by entrepreneurs from underserved communities. To apply, you need to market your Hispanic business to the community of 1.9 million individual lenders. These lenders can then choose to lend your company as much as $15,000 and you’ll have up to three years to repay them.
PeopleImages/istockphoto
CDC Small Business Finance is a nonprofit whose mission is to provide access to affordable and responsible capital to underserved entrepreneurs, including minority, veteran, and hispanic business owners. CDC offers loan amounts of $20,000 to $350,000 with five- to 10-year terms. They also offer SBA 504 commercial real estate loans of $250,000 to $40 million.If you are looking for advice to rebuild your credit, develop your business strategy, or manage financial reports, you’ll appreciate having access to small business advisors through CDC.
AaronAmat/istockphoto
Grameen America strives to achieve racial and gender equity by providing microloans of up to $2,000 to female and minority business owners. As part of their program, borrowers can open free savings accounts with commercial banks and build personal credit as they pay off their microloans. Grameen also offers training and support to women who want to start businesses and rise out of poverty.
ferrantraite/istockphoto
The Latino Economic Development Center (LEDC) offers Hispanic small business loans of $500 to $250,000 that can be used to purchase equipment, expand a business, hire staff, or purchase inventory. The three types of loans offered by the LEDC are as follows:
- LEDC Growth Loan: Loan amounts up to $250,000 for established small businesses that have been in operation for a minimum of two years.
- LEDC Startup Loan: Loan amounts up to $20,000 for new businesses with less than two years of business history.
- LEDC Seed Loan: Loan amounts up to $5,000 for businesses with less than one year of experience and with plans to launch a company within three months of funding.
LEDC also offers free business advice and credit-building services, as well as a directory of latino-owned small businesses.
svetikd/istockphoto
The National Association of Latino and Community Asset Builders (NALCAB) provides funding to a network of over 200 nonprofit organizations that serve diverse Latino communities throughout the U.S. With NALCAB support, these partner organizations offer Hispanic loans, grants, professional training, and support.
FG Trade/istockphoto
Hispanic small business loans aren’t the only way for your business to get funding. There are also minority business grants that can provide capital that you don’t have to repay. These grants are offered by federal and local government agencies, corporations, and nonprofits.
10. Grants.gov
Grants.gov is the largest database of federal grant opportunities. While most grants are not specifically targeted to Hispanic small business owners, awards are available for all types of entrepreneurs, especially those focused on healthcare, U.S. defense, and environmental protection.
Drazen_/istockphoto
digitalundivided’s BREAKTHROUGH Program (powered by JPMorgan Chase’s Advancing Black Pathways) offers $5,000 grants to Black and Hispanic women in the Dallas, Texas area. digitalundivided also provides training and resources to help businesses understand their customers, find financing, and choose the right business model.
alvarez/istockphoto
The National Association of the Self-Employed (NASE) works to provide resources for all self-employed individuals, including Hispanic business owners. They offer Growth Grants of $4,000, which can be used for a variety of business expenses, including marketing, advertising, hiring employees, and expanding facilities.
Besides access to grants, becoming a NASE member allows you to connect with experts who can advise you on subjects like finance, healthcare, strategy, law, and marketing. NASE membership also gives you access to discounts on healthcare, software, tax filing, and business travel.
PeopleImages/istockphoto
Hispanic businesses located in rural areas that have fewer than 50 employees and less than $1 million in gross revenue may want to consider applying for a Rural Development Grant from the USDA. Grants vary in size and can be used for a variety of projects that aid business development in rural areas, including training, technical assistance, acquisition or development of land, building construction or renovations, equipment purchases, and pollution control.
supersizer/istockphoto
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are government grants from five different federal government agencies. These competitive grants are focused around tech and science and offer up to $1 million in capital (divided into two phases) to qualified small businesses.
Tempura/istockphoto
You may be able to find funding for your Hispanic small business through Candid.org’s Foundation Directory Online, which contains information on over 240,000 grantmakers in the U.S. Access to the directory requires buying a monthly subscription, but you can cancel at any time.
monkeybusinessimages/istockphoto
Comcast RISE, which stands for Representation, Investment, Strength, and Empowerment, is a grant designed for businesses that were hit hardest by COVID-19. The grant is worth $5,000 and is given to small business owners hoping to expand and recover from the effects of the pandemic. Awards go to those looking to uplift their communities with a focus on diversity, inclusion, and community investment.
Vergani_Fotografia/istockphoto
The Entrepreneurial Spirit Fund by SIA Scotch Whiskey awards $10,000 in grants to small businesses owned by people of color in the food and beverage industry. Created by Hispanic entrepreneur Carin Luna-Ostaseskis, one of SIA’s goals is to provide funding, mentorship, and community to small businesses.
monkeybusinessimages/istockphoto
If you’re a woman entrepreneur, consider applying for the Amber Grant, named after Amber Wigdahl, who passed at the age of 19 and never got to fulfill her business dreams. Each month, at least $30,000 is given in Amber Grant money. Applying takes just a few minutes and winners are announced by the 23rd of the following month.
andreswd/istockphoto
In addition to the grants and loans, there are organizations that can provide technical assistance, training, workshops, and networking opportunities to Hispanic businesses. Below are some you may want to check out.
digitalundivided
With a focus on assisting Black female and Latinx business owners, digitalundivided offers virtual training and a fellowship program for entrepreneurs. It also offers a pre-accelerator program for tech-enabled startup founders who have already begun to build their startup, are pre-revenue, and need assistance in developing their business model, marketing, and strategy.
Minority Business Development Agency
The Minority Business Development Agency is an advocate for Hispanic and other minority-owned businesses, and offers research, conferences, and resources to help entrepreneurs. Its Enterprising Women of Color Initiative is aimed to help minority women succeed in business through various offerings.
USHCC
The United States Hispanic Chamber of Commerce actively promotes the economic growth, development, and interests of Hispanic-owned businesses. Members have access to events and business resources to support them in their growth. In addition, members get listed in the Chamber’s online Hispanic business directory.
SCORE
SCORE is a national organization that connects business owners to free mentors to help them learn and grow their companies. SCORE also offers free workshops and a robust online database of useful business content.
Poike/istockphoto
Looking for — and applying for — a Hispanic business loan can feel like an overwhelming task. Here are some ways to simplify the process.
Consider Your Options
Before applying for a small business loan, it’s a good idea to take a look at your credit profile and business financials, as this will give you an idea of what type of loan you might qualify for. If you have excellent credit, solid revenue, and have been in business at least two years, you may be able to qualify for a long-term, low interest loan from a bank or SBA lender. If not, you may want to look into financing offered by lenders and grantmakers listed above, as well as online lenders (who often have less strict qualification requirements for loans).
Determine How Much Money You Need
To figure out how much of a loan you need to start or grow your Hispanic business, consider how you would like to use the funds from a loan, then create a detailed budget for your project, adding in some padding to account for unexpected expenses.
Consider the Best Location for Your Business
If you haven’t yet launched your business, consider what might be the best environment for doing so. You may want to explore the best metros for minority businesses, since they may have established communities of hispanic business owners and resources to help you.
Gather All Your Paperwork
Whatever type of funding you decide to pursue, you will likely need to supply an extensive amount of information about your business in order to apply. This often includes:
- Business EIN
- Industry
- Entity type
- Business license and permits
- Annual business revenue and profit
- Bank account statements (personal and business)
- Personal and business tax returns
- Balance sheet
- Proof of collateral
- Accounts receivable and payable reports
- Existing debt
- Commercial lease
- Purpose of the loan/grant
- Business plan
This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
Lantern By
SoFiSoFi receives compensation in the event you obtain a loan, financial product, or service through the Lantern marketplace. This Lantern website is owned by SoFi Lending Corp., a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license number 6054612; NMLS number 1121636. (nmlsconsumeraccess.org
https://www.nmlsconsumeraccess.org/
). This site is NOT owned and operated by SoFi Bank. Loans, financial products, and services may not be available in all states.
All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each provider’s discretion. There is no guarantee you will be approved or qualify for the advertised rates, fees, or terms presented. The actual terms you may receive depends on the things like benefits requested, your credit score, usage, history and other factors.
*Check your rate: To check the rates and terms you may qualify for, Lantern and/or its network lenders conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender(s) you choose will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
All loan terms, including interest rate, and Annual Percentage Rate (APR), and monthly payments shown on this website are from lenders and are estimates based upon the limited information you provided and are for information purposes only. Estimated APR includes all applicable fees as required under the Truth in Lending Act. The actual loan terms you receive, including APR, will depend on the lender you select, their underwriting criteria, and your personal financial factors. The loan terms and rates presented are provided by the lenders and not by SoFi Lending Corp. or Lantern. Please review each lender’s Terms and Conditions for additional details.
Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit (consumer.ftc.gov)
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.¹
SoFi’s Insights tool offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
Personal Loan
SoFi Lending Corp. (“SoFi”) operates this Personal Loan product in cooperation with Engine by MoneyLion. If you submit a loan inquiry, SoFi will deliver your information to Engine by MoneyLion, and Engine by MoneyLion will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lenders/partners receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Engine by MoneyLion, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Engine’s Licenses and Disclosures, Terms of Service, and Privacy Policy.Personal loan offers provided to customers on Lantern do not exceed 35.99% APR. An example of total amount paid on a personal loan of $10,000 for a term of 36 months at a rate of 10% would be equivalent to $11,616.12 over the 36 month life of the loan.
Student Loan RefinanceSoFi Lending Corp. (“SoFi”) operates this Student Loan Refinance product in cooperation with Engine by MoneyLion. If you submit a loan inquiry, SoFi will deliver your information to Engine by MoneyLion, and Engine by MoneyLion will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lenders receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Engine by MoneyLion, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Engine’s Licenses and Disclosures, Terms of Service, and Privacy Policy.
NOTICE: The debt ceiling legislation passed on June 2, 2023, codifies into law that federal student loan borrowers will be reentering repayment. The US Department of Education or your student loan servicer, or lender if you have FFEL loans, will notify you directly when your payments will resume For more information, please go to https://docs.house.gov/billsthisweek/20230529/BILLS-118hrPIH-fiscalresponsibility.pdf https://studentaid.gov/announcements-events/covid-19
If you are a federal student loan borrower considering refinancing, you should take into account the new income-driven payment plan, SAVE, which replaces REPAYE, seeks to make monthly payments more affordable, and offers forgiveness of balances that were originally $12,000 or lower after 120 payments, among other improvements. Also, please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans, such as SAVE, or extended repayment plans.
Auto Loan RefinanceAutomobile refinancing loan information presented on this Lantern website is from Caribou, AUTOPAY, Engine by MoneyLion, and each of Engine’s partners (along with their affiliated companies). Caribou, AUTOPAY, and Engine by MoneyLion pay SoFi compensation for marketing their products and services on the Lantern site.
Auto loan refinance information presented on this Lantern site is indicative and subject to you fulfilling the lender’s requirements, including but not limited to: credit standards, loan size, vehicle condition, and odometer reading. Loan rates and terms as presented on this Lantern site are subject to change when you reach the lender and may depend on your creditworthiness, consult with the lender for more details. Additional terms and conditions may apply and all terms may vary by your state of residence.
Secured Lending DisclosureTerms, conditions, state restrictions, and minimum loan amounts apply. Before you apply for a secured loan, we encourage you to carefully consider whether this loan type is the right choice for you. If you can’t make your payments on a secured personal loan, you could end up losing the assets you provided for collateral. Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on the ability to meet underwriting requirements (including, but not limited to, a responsible credit history, sufficient income after monthly expenses, and availability of collateral) that will vary by lender.
BankingSoFi Lending Corp. (“SoFi”) operates this website in cooperation with Engine by MoneyLion presenting promotions for products and services offered by other banks, lenders, and financial institutions. If you select a promotion above, you will be connected to the website of the company offering the product. The promotions presented on this site are from companies that pay SoFi and Engine by MoneyLion compensation for marketing their products and services. This may affect whether a provider is featured on this site and could affect the order of presentation. Lantern and Engine by MoneyLion do not include all providers in the market or all of their available offerings. Click to learn more about Engine’s Licenses and Disclosures, Terms of Service, and Privacy Policy.
FG Trade/istockphoto
wagnerokasaki/istockphoto
Featured Image Credit: StockRocket / istockphoto.
