Last updated on December 17th, 2022
When it comes to softwares and online tools, I often get asked for my opinion on which is the best for businesses to use. The truth is that there are a lot of great options out there but no software will suit every business and their needs.
The same goes for procurement softwares. They are incredibly handy to use but each small business will have their own wants and needs for their procurement software.
As a result, the best procurement software for me won’t necessarily be the best for your business.
If you still want some guidance to help you find the best procurement software for your small business, then here is my guide to procurement softwares.
Check out the information below and I hope that this ultimate guide I have pulled together has all the information you need to find the best procurement software for you and your business. Good luck!
What Is Procurement?
First, let me explain what procurement for businesses is. I have already written multiple articles about different aspects of procurement in business but here’s a quick run down for the sake of this guide:
Procurement is an aspect of running a business that focuses around sourcing and obtaining both goods and services which help support a business’s operations.
Without these goods and services, a business would not be able to operate so for many businesses, procurement is a vital and necessary aspect. Because of this, the global procurement market is incredibly large and projected to reach $13.58 billion by 2030.
Despite procurement’s importance for businesses, I’ve met a lot of business owners who did not understand procurement at all when they set up their business.
They thought that procurement was simply about finding and buying the materials you need to make products – but it’s much more complex than that.
There are a lot of steps in the procurement process. These can be broken down into six essential steps including:
- Need Identification – This involves working out what services and products will be in high demand so you can estimate how many people you need to hire, how much materials you will need to meet product demand, and rent enough storage space to keep your products safe, etc.
- Vendor Selection – This step is all about researching vendors for services, staff, and materials so you can find the right vendor with the best quality materials, reliability, affordable costs, speedy services, and more.
- Purchase Negotiation – Here, your business will reach out to the vendors and begin negotiating your purchase contract. This involves the price, what you are requesting, and when you want the products of services to be completed.
- Invoice And Order – Once your procurement contract is negotiated, it’s time to write it up and complete your order. You will receive your invoice with all the costs broken down, but most businesses do not make the official payment until after the service has been completed or the products have been delivered. This is so any additional costs can be added at a later date.
As you can see, procurement is a very detailed process and it is vitally important to businesses in many different ways. 80% of CEOs claim that procurement helps them to make strategically valuable contributions as many use procurement costs as a KPI.
Because of this, it’s important to effectively manage your procurement processes.
They can provide businesses with vital information to help them improve their profit margins and improve a business’s efficiency and profitability through its operations – and this is where procurement software comes in.
What Is Procurement Software?
Procurement is one of the most important processes when it comes to business but many small business owners can struggle to effectively manage their procurement processes (see also ‘Best Marketing Package For Small Business‘). One solution for this is procurement software.
A lot of businesses use procurement softwares to help them effectively and efficiently manage their procurement processes. Although procurement softwares vary in terms of features depending on the service provider, but a lot of procurement softwares are used to:
- Create and verify purchase orders with vendors.
- Automate electronic payments.
- Maintain and manage goods inventories to prevent shortages and handle stock.
- Analyze data to help business owners make informed business decisions.
- Streamline administrative tasks, even across different platforms.
So, procurement softwares can help improve supply chain management for businesses and this can have a range of benefits.
57% of companies say that they believe that supply chain management (SCM) gives them a ‘competitive advantage’ and 70% of industry professionals believe that an improved supply chain is a key driver for better customer service.
As a result, a lot of companies and businesses (big and small) opt for procurement softwares. Here are some great examples of procurement softwares available for small businesses, so check them out below!
Procurify is a spending management solution and procurement software that was first founded back in 2012.
It’s a cloud-based platform which allows great integration with multiple punch-outs so businesses have the ability to manage business spending from one single software.
This can help streamline workflows for small businesses and boost its efficiency as business owners can track both their expenses and purchases all in one easy to use place.
As a software, Procurify puts a lot of emphasis on controlling expenses and spending by tracking purchases, making budgets, and viewing pipelines so businesses can organize what needs to be bought and when.
It also offers features to help businesses purchase orders, manage their budgets, and organize important documents (such as invoices and shipping documents) to streamline auditing processes.
However, Procurify also offers additional features for analysis and reporting, communication between departments, and integration for accounting.
Some notable softwares Procurify is able to integrate with includes QuickBooks Online and NetSuite, two incredibly popular softwares used for accounting in business.
It also comes with a mobile app so business owners can manage their expenses from their phones while also receiving alerts whenever there is an issue or important information that needs to be addressed.
Another popular cloud-based procurement software ideal for small businesses is Precoro.
As a procurement software, Precoro aims to eliminate the repetitive, menial tasks which can eat into your productivity. 40% of workers waste a quarter of their work time on manual and repetitive tasks – and this can eat into your business’s profits.
As a result, Precoro has a lot of features which aim for improving automated activity and streamlining processes through centralizing tasks.
Precoro allows for tracking on spending by offering great cash flow transparency to help make organizing your budget even easier.
The data from this feature is even transferred to analytics and can be used in reports for your future procurement strategizing. These reports can also be customized to meet your business’s needs and branding – a huge plus compared to its competitors!
Activities can also be automated to save small business employees a lot of time when it comes to tracking orders, requesting and approving purchases, and setting budget limits. All of this contributes to Precoro’s ease of use (more on that later).
It’s cloud based so it can be accessed anywhere from different devices, and this is especially handy for small businesses with multiple employees or multiple satellite offices.
It also released its app in 2022 It comes with built-in business tool integration and connectivity, especially to important accounting softwares like NetSuite, Xero, and QuickBooks.
Kissflow Procurement Cloud is a web-based procurement software that puts a focus on ease of use, flexibility, and building good relationships with your suppliers and vendors.
Like most procurement softwares, it offers a centralized place for businesses to handle all of their procurement processes from purchase requests, invoices, reporting and monitoring.
However, it also offers complete control over your procurement processes ranging from requiring conditional approval from multiple people in your company before automation takes over (making sure that the whole team approves of a decision before it goes through) to simple approval processes that only require a single click.
What this means is that businesses have customization over their workflows and procurement processes, allowing single business owners to full teams of employees to manage procurement with ease.
This is extremely useful for businesses with stakeholders so they can monitor how the business is being run and stay informed automatically.
There’s also a range of automation features to allow automated order requests, orders, budget limitations, approvals, and more.
This can greatly reduce the amount of repetitive and menial tasks you or your employees are forced to do again and again throughout the ongoing procurement processes.
Kissflow Procurement Cloud also offers a range of integration options including softwares and tools from Google, QuickBooks, Xero, IBM, Oracle, NetSuite, and more – all for improved user experience by offering a simple centralized place to control your procurement processes.
Data can easily be transferred over for further analysis and reports.
A lot of procurement softwares charge their users for access to the platform – but Pipefy has a dedication towards helping businesses lower costs while improving spending visibility in procurement processes.
As a result, approvers and requesters can use the Pipefy software for free and this alone is enough to help many businesses boost their productivity and efficiency while saving a ton of funds. This can be a game changer for small and new businesses.
Pipefy also offers great integration opportunities with softwares including Salesforce, Zendesk, social media platforms, Google tools like Drive and Sheets, MailChimp, OneDrive, and so much more.
This makes it super easy to connect and share a plot of your data and work all through one platform – which is a great way to boost efficiency and reduce any human errors. This means that Pipefy is incredibly diverse and can be used for all kinds of usage.
In terms of features, it is rather limited but it still offers task automation to cover a lot of menial, repetitive procurement tasks that can reduce employee productivity and waste time and funds.
Procurement Software Buyer’s Guide
If you are looking for more procurement software options, then here is a handy buyer’s guide to follow while you continue searching.
I pulled it together using the factors and benefits I kept in mind myself when searching for my top procurement software recommendations. They are all very useful for businesses but you may value some features more over others – so take a look and consider the information below!
Automation is something that is being gradually introduced to businesses in all kinds of areas and industries.
90% of employees feel ‘burdened’ with repetitive tasks which automation could easily take over and handle.
As a result, one report from Deloitte found that 24% of companies have started using low-code process automation for aspects of their business with a further 29% planning to introduce automation soon – and that’s just automation in business processes!
Automation is also being introduced into other aspects of business including marketing, human resources, and more.
70% of workers say that automation is the biggest opportunity for reducing time wasted at work on repetitive tasks.
What this means is that by automating parts of your procurement processes, your employees could be more productive with their work time – and this can even translate into a boost in revenue.
A report from Gallup found that globally, businesses lose $7 trillion through lost productivity – that’s a lot of money your business can earn back simply by introducing automation to your procurement process.
So, when it comes to procurement softwares, it should be easy and simple to set up automated activities and tasks to help reduce the time you and your employees waste manually going through the steps of your procurement process.
A lot of small businesses use multiple softwares to help them with various aspects of their business. One joint survey from Deloitte and Mulesoft found that the average company uses 976 applications.
This includes platforms like Slack for communication between employees, clients, and even vendors, while others use softwares like QuickBooks or Xero to help with accounting and finances.
With procurement, this area of business bleeds into other areas of business and so, a lot of businesses want integration between their procurement software and other softwares they use.
According to that earlier report from Deloitte and Mulesoft, only 28% of applications are integrated – which means that business employees need to jump between applications while working and this can eat into their productivity.
The ideal procurement software should be able to integrate with a range of softwares and tools that small businesses use for other important aspects of their business.
This helps businesses centralize their operations so they can work more efficiently on processes and activities.
Costs are a big concern for businesses.
Approximately 90% of startup businesses fail and the leading reasons why include a lack of funds.
A study from CBInsights found that 38% of businesses fail because they either ran out of cash or failed to raise new capital with their business, and a further 15% failed due to pricing and cost issues.
So, businesses need to keep an eye on their spending and the procurement process is a great place to do this. Maverick spending (or tail spending or rogue spending as it’s sometimes known as) is a type of spending that goes outside of a business’s regular purchasing processes.
It also accounts for 20% of a business’s total spending – that’s a lot of funds wasted through unregulated spending.
What all this means for procurement software is that the ideal procurement software should come with total purchasing visibility.
This allows businesses to track their spending and regulate every cent that leaves its bank account.
You will be able to follow where all your company funds are going and this insight can help your business cut back on maverick spending, highlight the biggest costs of your business, and what areas of your procurement processes are far too long.
This kind of information can help you make important business decisions to find more affordable vendors for your services and materials, negotiate with suppliers, and more.
Using procurement software with great spending visibility means that businesses can track their funds and spending with greater detail.
This kind of data is vital for informing spending decisions and can help small businesses cut back on high costs and maverick spending – all of which can be vital for keeping a business up and running.
Analytics And Reporting
Most procurement softwares will come with features to help businesses request and approve procurement purchases, manage their inventory, handle invoices, and basically execute other basic procurement tasks.
However, some softwares will offer an additional feature which is incredibly useful for business owners – analytics and reports.
Staying on top of your procurement data can provide businesses with important insights and information relating to where your business’s funds are being spent, how long processes are taking, and which departments are the biggest offenders for maverick spending.
All of this data can be used to help businesses make informed decisions to benefit their company.
One report from MicroStrategy found that 63% of businesses agree that using analytics can help improve a business’s efficiency and productivity, and further 57% agree that analytics helps businesses make faster and more effective decisions.
This means that procurement softwares that offer analytics and reporting features are also offering their users a huge advantage that can seriously benefit their business.
These features provide business owners with analytics reports that business owners can use to inform their decisions to unlock a ton of benefits – but not all procurement softwares offer these kinds of features!
It’s easy to see why mobile apps are so popular – they are convenient and allow users to access information at any time or place.
These benefits also apply to apps that can help you manage and operate your business remotely.
Some procurement softwares offer a downloadable app for their users so you can stay up to date with developments in your procurement process even when you are away from your office or computer.
This can help you boost your business’s efficiency and quickly get tasks done to keep the procurement process moving smoothly. So, having a mobile application for your procurement software can be a huge advantage!
Frequently Asked Questions
What’S The Difference Between Purchasing Software And Procurement Software?
One constant mistake I have seen with business owners is that they sometimes use the terms purchasing software and procurement software interchangeably – but they are actually different things.
Purchasing software focuses explicitly on making purchases for your business.
Procurement software helps with various aspects and areas of procurement including researching vendors, handling budgets, organizing documents for auditing, tracking inventory, generating data for reporting and analysis, and so much more.
As a result, procurement software usually includes a lot more features that businesses use for monitoring their procurement processes.
Purchasing software is like a ‘diet’ version of a procurement software as it helps businesses monitor their purchasing spending – but nothing else.
A lot of businesses opt for procurement softwares over purchasing softwares because they offer so much more in terms of features and benefits.
Do I Need To Automate My Procurement Processes?
I mentioned earlier how important automation is for businesses, and robot process automation (RPA) can help cut costs for businesses while improving its efficiency and accuracy.
Some of the main issues I have heard business owners complain about in regard to procurement is human errors – accidental orders, overspending, etc. Automation can help eliminate these challenges and the issues that come with them.
83% of procurement professionals admit that less than half of their processes are automated, but what this means is that a lot of businesses use automation in their procurement processes in some way – even if not entirely.
When you also consider that more than 50% of high performing procurement teams are using RPA, it looks like automation can really help you boost your procurement processes in terms of efficiency and performance.
Ultimately, it’s not mandatory that you automate parts of your procurement processes – but it certainly can benefit your business if you do.
How Much Does Procurement Software Cost?
Each procurement software will have its own price, ranging from a couple of dollars every month to a few hundred dollars each year.
The price fluctuates depending on factors such as scalability, the amount of features it offers, how easy it is to integrate with other softwares and tools, etc. Some procurement software are designed for small businesses, others are designed for larger companies.
Ultimately, the average cost of procurement software boils down to around $11 to $35 per month per user – but again, this can vary depending on the features, scalability, and more.
My advice is that if you are interested in a certain procurement software but you can’t find a clear guide price, then reach out to the company and ask for a quote.
Some procurement software providers adjust the pricing depending on how you intend to use the software so you don’t end up paying for more features that you won’t actually use.
I hope you have found this guide to be helpful when searching for the right procurement software for your small business. As you can see, you have plenty of options open to you and even more as your business continues to grow.
I really do recommend that you start using procurement software as they offer so many benefits for your business. They can help boost your business’s efficiency while cutting back on costs to help widen those profit margins – all great benefits that seriously help your business!
So, please use the guide above for all the information you need to keep in mind when choosing the right procurement software. Feel free to reach out if you have any more questions and good luck for the future!