BellWether Blog



How to Optimize Your Sourcing Function

Strategic sourcing can add value to your entire enterprise. An effective procurement process allows for sourcing strategies to improve the growth of a business. Purchasing software will provide your business with:

  • A high percentage of spend under management
  • Strong alignment between the procurement process and business stakeholders
  • Discipline around the entire purchasing process and sourcing function 

The Sourcing Process

As you know, a sourcing process is used to choose the best product or service for a specific expenditure category. This is just one of the business processes that are run poorly by many companies, which can result in a loss of saving opportunities, delivery of inferior quality products, and even, less favorable terms. 

So, how can you optimize your sourcing function? The answer is an effective procurement system. 

A procurement function will provide the structure and framework to enable successful sourcing strategies. 

Spend under management

When an expenditure comes through a defined procurement and sourcing process, it is then competitively sourced and recorded. As your business’ spend under management increases, you can expect the ability to reduce costs, forecast expenses, and manage vendors. 

This purchasing data is not only the measure of spend under management, but it is the foundation for the whole of spend analytics. If you don’t know or understand the details of what you are spending, with which vendor, and for what goods or services, you won’t be able to manage the spend effectively, making it difficult to negotiate with suppliers. 

Purchasing software lets you access this type of data quickly and easily. Having the readily available spend data will make it easier for those in charge of reducing costs. The purchasing anger can see the expenses broken down into categories, like maintenance costs, new purchases, and upgrades. This data can then be shared with leadership, and a strategy can be presented to the finance department so that a plan can be put in place to see what costs can be reduced. 

A robust procurement system should provide detailed analytics so that companies can make business decisions based on data. 

Revised purchasing policy

A purchasing policy must be well-defined to provide the framework for how the spend is managed. It is up to the business to use the data provided by the procurement software to decide how rigid the policy should be and how strictly it should be enforced. A policy should include only things that the company wants to enforce. This policy should promote the right spending behaviors. While many decisions also need to be approved, purchase software can automate this, helping to approve suppliers based on specific data. That means no more breakdown in the sourcing function, saving your business time and money. 

Procurement and Stakeholders

An optimized procurement function should provide a strong alignment between procurement and stakeholders. From the request for a quote through the final negotiations, suppliers should have all the information they need at all times. In competitive situations, vendors may look for signs that purchasing and business owners are not on the same page and then use this to take advantage of the business. 

The early stage of any project should begin with the alignment of the procurement process and the business. Using robust purchasing requisition software allows for data to be communicated effectively across all internal teams so that the right decisions can be made. With improved communication, there will be no opening for a vendor to take advantage of the lack of communication between departments. 

With data available for stakeholders to see where spending is occurring and how it’s being spent, you can get a better idea of where you stand at the beginning of negotiations. This transparency throughout the business will allow everyone to stay in sync so that there is no breakdown in the negotiation process. 

Lifecycle Vendor Management

To maximize the value of sourcing strategies, businesses will need a defined lifecycle approach to vendor management. This management can depend on a few different aspects:

  • The individual circumstances
  • Amount of spend
  • Criticality assigned to goods/services the vendor provides. 

You’ll need to be able to monitor a vendor’s performance against requirements, benchmarks for pricing, and quality. A full-time resource may even be dedicated to managing a vendor relationship, which involves an understanding of product roadmaps, supply chain issues, and real-time quality metrics. 

Performance data is key to business and procurement. This data can provide leverage for negotiations while highlighting changes needed in agreements or contracts, and enabling the business to have a more complete picture for the future. 

Vendor management and risk mitigation

By monitoring your vendor effectively, quality issues, weaknesses in supply chain or logistics, and concerns about financial stability are all highlighted. These analytics allow the procurement and stakeholder partnership to effectively leverage vendors for better prices, quality, and product innovation. 

What are the benefits of an optimized sourcing function?

Cost Savings

With better contractual terms and conditions based on analytics and negotiations in sync with business goals, the business can expect increased cost savings. With purchasing software, you can save both time and money as data is created for your automatically to help you make the crucial sourcing decision that makes your business successful. 

Improved Quality:

Through supplier performance monitoring, the quality of goods and services will improve. As we all know, those who are monitored tend to do well in order to impress their buyers. Suppliers will notice that you’re taking an interest in their work and do their best to keep your business. 

Better Supplier Relationships:

Relationships will enhance with better lifecycle vendor management that promotes communication with the supplier. With better relationships, there is a transparency that makes your suppliers appreciate your relationship all that much more. 

Risk Mitigation:

Ongoing analysis of vendor information and financial health checks help provide the business with risk mitigation. If you notice a breakdown in the vendor’s supply chain or logistics, you can come up with a detailed solution before it negatively impacts your business and its growth.


July 15, 2019
BY Bellwether
Effective Techniques for An Efficient Purchase Order Processing

Efficiency is key when it comes to running a successful business. Because efficiency improves productivity and can help businesses easily manage certain aspects of their business, it’s important to find ways to increase efficiency during the day-to-day operation. An efficient purchase order system can be implemented gradually or all at once to improve function of your business. By using purchase order software you can streamline the day-to-day workflows of your business, save money, and increase sales easier than using a manual process that takes up time, money, and energy you could use to perform other important business tasks.

How do you improve order processing?

While your current order processing may be working well enough, you’ll find that you can save time and money by streamlining your current workflows. Improving your purchase order process with PO software doesn’t have to be a stressful, time-consuming task, and can be done with a few simple tips.

E-commerce Integration

Whether you sell your products online through a website or other marketplaces, or haven’t considered making a move to e-commerce, selling your products online will not only boost sales but drastically improve your PO process when you synchronize actions from different platforms and put them in one spot. Instead of using dashboards from all of the different marketplaces you use to sell your products, you can integrate your software to demonstrate all critical business information in one simple and easy-to-use platform.


Using automation wherever you can is an effective way to streamline the procurement process. It will also reduce errors and the cost of the entire process. Automation and flexibility should come together to allow customers to place complex orders and let you approve requisitions quickly and easily. Automation can also take a purchase order and turn it into an invoice in one easy step to create documents that are crucial for business management and budgeting.

Inventory Control

Controlling your inventory is not only a necessity for the organization of your business, but it’s important to maintain quality relationships with your customers. It’s the age of immediate gratification when it comes to purchasing products. Whether you’re direct-to-consumer or sell to other businesses, your customers expect their orders to be processed quickly and delivered in a timely manner. If a customer places an order only to find out a few days later that the item they bought is no longer in stock, this can be detrimental to your entire relationship with the customer. As the business, you should know how many of each product you have in your inventory so that you can avoid problems in the future.  This can be critical and make customers choose whether or not to purchase from you again. If your business shows that it doesn’t even know what it has in its own inventory, you’ll lose the trust of your customers, something that can break any business.


Purchase orders are all about one thing: Communication. If communication is lacking through the entire purchase order process, you’ll face delays and disruptions that can damage your relationship with customers and prevent them from placing orders with your business in the future. Orders need to be transferred to the correct departments and employees to improve workflows. You’ll also need purchase orders and invoices that communicate all necessary info with customers and other employees within your business. Your information needs to be up-to-date and correct so that you can complete the purchase order process more effectively and efficiently.

Simplify Database

No matter the way in which customers place orders with your business, you need to be able to receive vital information without issues. This information must then be available for your employees to access from across different departments. Data must be seamlessly transferrable throughout different areas of your business, from the accounting department to production and customer service. Many databases can be complicated and confusing to use for both customers and businesses, making placing and processing orders more difficult than it needs to be. Problems from an overly complicated database and purchasing system can cause a breakdown in the process and negatively affect the entire customer experience. Instead, using one program that can be integrated with all of the others and show vital information on one screen instead of multiples, can streamline workflows throughout departments and lead to more sales.

Simplify Documentation

The procurement process has a few vital pieces of information for each customer: the purchase order, invoice, and any service terms. This documentation is necessary to prevent risks and help improve customer service and production. While one purchase order may have many documents to maintain, these should all be in one spot so you can find them easily when you need them. It will also benefit your customers if they have questions about certain orders and pricing. Because you can’t always rely on your customers to keep the proper documentation, it’s important that you have all of the important information to prevent confusion in the future.

Purchase Management Software Integration

Whether you manually create purchase orders and have used spreadsheets throughout the purchase order process, or have used purchase order software in the past and are looking to retire your current system, it’s important to find software that integrates with your other programs. Purchasing management software pays for itself as it allows you to streamline workflows, improve efficiency and automate your current process to control costs and help you increase sales and profit.

While there are many different types of software out there, you need to make sure that the system you choose allows for easy integration with applications and software you’re already using to create a seamless and automated purchase order process. If you already use QuickBooks to manage purchase orders and invoices, but are looking for more robust purchase order software that can create even more efficiently among your employees, the new purchase order software you use should be able to easily integrate with QuickBooks to improve workflow without disrupting the current system.

June 4, 2019
BY Bellwether
How to Simplify Your Purchase Order Process

As a businesses operator, you know how extensive and complicated the purchase order process can get, especially without the right tools in place to help streamline workflows and improve businesses operations. Optimizing the purchase order process is the easiest way to simplify the process and make it less complicated for yourself and your employees.

What are the advantages of optimizing your purchase order process?

Your purchase order process can be as simple as you need it to be to effectively manage your business and make your entire procurement process more efficient. When using purchase order software to optimize your process, you’ll find many benefits for your entire business.

Minimize Risk

Purchase order management software allows business to automate all documents and records throughout the entire procurement process to display order details, costs, payment terms, and service terms. This will easily minimize risk and greatly reduce the chances of being caught up in legal disputes with vendors who may have made a simple mistake easily corrected by maintaining the correct documentation at all times and at all steps throughout the procurement process.

Budget Management Made Simple

With all of your purchase orders and invoices in one easy-to-find location, you can more effectively manage your budget to save your businesses money. While you’ll be able to see purchase orders as they come in, you can also include purchase orders of your own to more effectively take a look at current budgets to save money and the time it takes to handle an overly complicated budget.


Matching orders, running audits on inventory, and identifying important documents and invoices is easy with procurement software. Ensuring compliance is important in all businesses and can become more difficult as the businesses achieves success and grows. By optimizing the purchase order process, you can more effectively ensure the compliance necessary to keep your business running.

Improve Business Relationships

Purchase order software can help businesses manage order expectations and remind your business of important information crucial to developing and maintaining beneficial buyer-vendor relationships. You can easily create a document that allows negotiations to start-off in the right direction with pricing and terms being outlined clearly and agreed to quicker. You can then easily review contracts and terms to make sure both parties are complying and delivering on what was promised.

Save Time and Money

Optimizing your purchase order process will save you time and money. By improving overall efficiency of the entire process, your employees will each become more productive and be able to accomplish more with their workday. When certain tasks like approvals and requisitions can be automated and settings customized for approval, there will be a lot less breakdowns in the existing purchase order process structure, which helps the process run smoothly without hiccups and bumps in the road. With improved budget management, you can easily make decisions that directly benefit your business to save money and increase day-to-day efficiency.

Steps to Improve your Purchase Order Process

Improving your purchase order process will positively impact your business drastically to help you streamline workflows and increase efficiency in many areas. Improving your purchase order process may seem like a stressful, time-consuming task, but it can be made simple with these steps:

  1. Assess existing process and workflow

Your existing purchase order process will be able to tell you a lot. Tracking the day-to-day of the current process will help you see all of the issues your workflows face and brainstorm solutions. Whether you use a manual PO system or older procurement software, it’s important to note the bugs that are stunting your business’s efficiency. Assessing your existing workflow is simple. Shadow the person who handles purchase orders the most within your company for a day to see how they are currently performing certain tasks. Make sure to ask all of the questions necessary to give you the best idea of how current workflows perform.

  1. Establish a Preferred Vendor List

You can easily improve communication across your business with a supplier directory that contains quality information on different vendors. This way you will keep all decision makers on the same page when it comes to vendors and all aspects of the purchasing process. You’ll also be able to more easily track information for finances, reporting, and data analytics to improve your business strategy when it comes to your vendors.


  1. Develop Beneficial Buyer-Vendor Relationships

Get to know your vendors and optimize those relationships by taking a look at key metrics, purchase history, payment history, and your costs to keep these vendors coming back. You can optimize relationships by keeping other crucial information like service terms fresh in your mind to better build and maintain relationships. This information can also be used by your customer service team to enhance overall customer experience so that they have the correct information on-hand when and if a customer has questions.

  1. Improve Information Access

Make sure everyone involved in the purchase order process, from customers to your management team, has the right information. Making sure the employees that deal with procurements on a daily basis have access to the necessary information, such as pricing and the preferred vendor list, can streamline workflows.

  1. Define and Refine the Approval and Requisition Process

If you don’t have a clearly defined approval process, you’ll find that the day-to-day workflow has unnecessary issues with efficiency. If certain vendors, requisitions, and prices need to be approved, creating a clearly defined approval process will streamline workflow and help solve disruptions throughout the entire process.

  1. Automation

Automate as many manual processes as you can to improve efficiency in the day-to-day and streamline your current workflows. Automation will also help reduce errors, handle document management and approvals, and improve decision making at every level of your business.

  1. Use Technology

Purchase order software will help you streamline workflows to make your current purchase order process more efficient and improve productivity throughout the entire process. Not only can they help automate approvals and requisitions, purchase order software should have 3-way matching to match invoices with POs to automate the procurement process when possible and save your business time and money by eliminating redundant, time-consuming tasks. No matter which technology you choose for your business, you should make sure that the program can integrate with the others you’re using to streamline all workflows and make the purchase order process as simple and easy as possible for your business and employees.

May 28, 2019
BY Bellwether
Does Purchasing Automation Benefit the Procure-to-Pay Process?

Regardless of the size of a company or its specific industry, the activities of procurement and accounts payable impact each other. Because of this link, a company’s goal should be to maximize the efficiency of both departments. Doing so has very clear benefits, especially in regards to the procure-to-pay process.

One of the best ways to reap all of those benefits is to automate procure-to-pay activities. Purchasing automation offers efficiency and speed improvements that simply aren’t possible through any other means.

Automating Procure-to-Pay

Automation directly impacts procurement staff. Once automation is introduced into this environment, it provides procurement professionals with what they need to operate at a higher level of both efficiency and productivity. What’s even more appealing about those gains is they can then help to reduce the staffing costs that go along with processing orders. Instead of spending large amounts of time on basic tasks related to the purchasing process, members of this department can focus their attention on activities that create far more value.

Key Benefits of Procure-to-Pay Automation

Once procure-to-pay processes are automated, a business will notice faster cycle times. The second notable benefit of purchasing automation is increased efficiency for purchase order processing. Because an automated system takes care of routing information in the most efficient way possible, previously wasted time caused by communication inefficiencies is eliminated.

The third benefit that’s very meaningful for businesses is that procurement employees are able to process significantly more purchase orders. That benefit stems from purchasing automation directly assisting with common tasks like purchase order generation.

Another benefit that goes along with automating procurement is a reduction in supplier lead times. The clear and consistent data sharing provided by automation ensures that suppliers have everything they need to avoid delays.

Moving Towards Purchasing Automation

Once businesses learn about all of the benefits that procurement automation has to offer, they generally want to learn more about what it takes to make this transition. When this topic comes up, it’s generally a good time to review the current strategy that’s in place for managing procurement. Looking at the current state of areas like receiving and invoicing provides an opportunity to identify key areas for improvement.

The good news about purchasing automation is not only is it very beneficial, but it’s easier to implement than many companies expect. With the right purchase order software, companies can get all the features they need. From customized work flows to purchase order generation, quality purchasing software puts all the power of automation into a straightforward interface.

To see exactly what purchasing automation can do for your business, be sure to set up a free live demo of Bellwether Purchasing Software.



November 24, 2015
BY Bellwether
A Buyer’s Guide to Preparing a Purchase Order

A purchase order (PO) plays an integral part in the purchasing process. This document lets a seller know that a buyer is ready to place a formal order. Because this document does serve as a contract between the buyer and seller, it’s important for it to include all relevant information.


It’s critical for the price to be clearly stated on the PO. Since it’s common for buyers and sellers to negotiate price, the PO needs to show the price that was agreed upon. If a purchase order doesn’t include price information, it won’t be helpful later in the event of a dispute.


In terms of areas where buyers can gain leverage for negotiating, quantity is at the top of the list. Simply put, higher quantities make sellers more willing to negotiate on price and other terms. One of the many benefits of purchasing software is it makes it easy to ensure orders are made together in maximum quantity instead of being spread out across multiple smaller orders.

Latest Ship Date

One of the most common mistakes organizations make with purchase orders is failing to negotiate a latest ship date and then putting that date on the PO. Knowing the absolute latest an order will be sent out is the only way to know when it will be available to actually put into inventory.

Terms of Sale

In addition to pricing, a well-done purchase order should cover all other relevant terms of sale. From how payment will be handled to specifying expected quality, using a purchase order to cover these details ahead of time is the best way to avoid a future dispute.

Marking Requirements

During the rush of trying to put together a purchase order, it’s easy to overlook seemingly small details like marking requirements. However, overlooking this detail can result in products getting stuck in customs. To avoid that type of delay, ensure that all required markings are specified on the purchase order.

Purchasing Software Simplifies Purchase Order Generation

There’s a lot that goes into correctly preparing a purchase order. As a result, the process of preparing one manually can take up a lot of time. For businesses that want to ensure this task is done correctly and maximize efficiency, purchase order software is the ideal option.

With the help of software, purchasing managers and anyone else involved in procurement will have everything they need at their fingertips. Not only do customized work flows make preparing and generating accurate purchase orders a breeze, but this type of software streamlines numerous other tasks like vendor research and vendor negotiations.

To learn more about how software can make it easier than ever to correctly prepare purchase orders, take a look at the full list of features offered by Bellwether Purchasing Software.


November 24, 2015
BY Bellwether
How Workflow Automation Can Shorten the B2B Sales Cycle

In general, the sales cycle for B2B offerings is significantly longer than it is for B2C. From initial contact through pitches to negotiations, there’s a lot that has to get done in order for a deal to close. Because there are already so many potential roadblocks in place, it’s important for a company to provide as much support as possible to their salespeople.

By providing all the support that’s needed, companies can ensure that they’re not causing any inefficiencies that make things even more challenging for their salespeople. While salespeople will still have to contend with challenges like making it clear why a specific offering is superior to that of a competitor, not having internal hurdles to overcome can provide a significant boost.

To ensure that there aren’t walls between sales and management which are hindering the ability of the former to make deals, let’s take a look at three ways workflow automation can be successfully used:

Provide Smart Deals

One of the reasons that it’s typical for B2B sales to take longer is because price is something that’s almost always negotiable. From more complex packages to higher volumes, buyers want to be sure that they’re getting the best deal for their money. Since a lot of back and forth is already going to accompany this process, companies don’t want to create even more of it for their salespeople.

Instead, eliminating the need for drawn out internal discussions can give salespeople the flexibility to push for a sale and successfully close. With an automated approval workflow, salespeople can have the confidence to strategically discount without worrying about offering something that is going to make their manager unhappy.

Process Special Requests

Price isn’t the only element of B2B negotiations that often requires approval. There are a wide range of things that may come up which will require a salesperson to seek approval from their manager. If you want to ensure that getting special requests approved doesn’t stand in the way of a deal, an automated workflow is essential.

Dynamic Management of Inventory

One big consideration for B2B buyers is how quickly a solution can be delivered. If two offerings share many of the same features but one provider is able to deliver significantly faster than the other, the buyer is probably going to err on the side of speed. Utilizing automation in regards to inventory can help a business be as aggressive as possible with their delivery timelines.

It’s worth noting that the type of automation discussed above can benefit a business in other ways as well. For example, purchasing managers can use purchasing software to streamline their purchasing process and increase the overall efficiency of everything related to procurement.

Contact us today for a Free Live Demo, or sign up for a Free 30 Day Trial and try out Bellwether Purchasing Software for yourself. No credit card needed.



September 19, 2015
BY Bellwether
The 3 Cornerstones of Effective Purchasing

As the role of purchasing continues to expand and grow, it’s easy to get caught up in all of the latest trends. While there is definitely value in knowing what’s new, it’s now more important than ever to have a really strong grasp on the fundamentals of effective purchasing.

The reason that fundamentals are so important is because many organizations are looking to enhance their purchasing through efforts like automation with purchasing software. Since automating different tasks can provide a major boost to what’s currently being done, it makes sense for companies to explore the different options that are available.

However, the key thing to remember is if there are currently processes in place that aren’t optimal, automation isn’t going to magically solve them. So before a company can reap the benefits of things like automation, they need to ensure that purchasing is being done in the best way possible. That’s where the three cornerstones of effective purchasing come into play:


August 21, 2015
BY Bellwether
What Trends Will Shape Procurement This Year?

Although we’ve all settled into 2015, there’s still quite a ways to go before we reach 2016. Since there is a lot that can happen between now and the end of the year, many procurement professionals are looking at different trends which are expected to shape the landscape of procurement this year. If you’re curious about which factors may have the biggest impact on your profession, we’ve pulled together a list of trends that you should know about:

A Focus On Organizational Alignment

More companies are realizing that organizational alignment is an important part of staying ahead of the curve. Because many companies are looking for ways to create greater synergy among departments, it’s important for procurement to get on board with this change. That can mean having more direct communication with departments like IT or marketing. While it can take some time to adjust to this change, procurement departments that embrace this idea will actually stand to gain a lot.

Shifts in Inventory Strategies

Shrinking product life cycles and supply chain simplification are just a few examples of things that are driving the need for procurement to take a more holistic approach to managing inventory. As a result of this changing tide, it will be important for procurement departments to keep their eye on ways to accomplish goals like serving multiple channels with a single pool of inventory.

Managing Performance in Real-Time

Purchasing software is having a big impact on the way that procurement processes are carried out. One example of the impact of purchasing software is that more things are being done in real-time. Another impact is that lots of data is being collected. While most companies have no shortage of data available to analyze, translating that data into actionable information can be a challenge. Procurement departments that are able to figure out how to properly harness different types of data will have a significant competitive advantage.

The Influence of Emerging and International Markets

Apple recently announced that iPhone sales in China beat the United States for the first time. Not only are established international markets like China influencing what’s happening throughout procurement departments, but emerging markets like Latin America are also having a noticeable impact. Since these changing markets are impacting everything from logistics to pricing, it’s important for procurement departments to be on the lookout for new opportunities.

Building Stronger Relationships with Suppliers

Many businesses are really emphasizing the importance of building long-term relationships with suppliers. While that doesn’t mean procurement departments should avoid negotiating, it does mean that purchasing managers should look for ways to engage in win-win negotiations. By taking the initiative to really strengthen these relationships, procurement departments will be in the best position to weather any changing circumstances that may come up down the line.

Bellwether Purchasing Software offers a suite of resources for all of your purchasing department tasks. Contact us today to learn more.



May 12, 2015
BY Bellwether
Common Procurement Mistakes to Avoid

Running a successful procurement department isn’t something that generally happens overnight. In order to get this department to an optimal position, it’s important for there to be clear goals in place. In addition to setting clear goals for what the department should focus on achieving, it’s also important for everyone who works in procurement to be aware of common mistakes. By knowing what’s most likely to go wrong, every member of the team can keep an eye out for procurement mistakes and correct them if they ever come up.

Since we are in a position that allows us to speak with purchasing managers and other procurement professionals on a regular basis, we want to share the most common mistakes that have been brought up to us:

Rushed Buying

This mistake is especially common in new businesses. And even if a business is established, it can still happen if the procurement department has just gotten up and running. The most common reason that rushed buying happens is because a company or its procurement department feels like they need to get everything ordered as soon as possible. While securing what’s needed in a timely manner is important, that doesn’t mean the procurement process should be thrown into overdrive. By focusing on a striking a balance between thoroughness and promptness, procurement departments can do an optimal job.

Not Being Flexible with Plans

It’s definitely good for procurement departments to have plans in place. Not only can this keep things moving along, but it’s also a great way to avoid common obstacles. While there are clear benefits to planning, that doesn’t mean members of a procurement department should be tied to a plan forever. Since conditions can change, it’s important to review plans on a regular basis. By making reviews part of a team’s culture, the department won’t have to worry about getting stuck in any negative patterns.

Failing to Negotiate

Although we’ve already talked about negotiating on the blog, it’s a topic that’s worth bringing up again. Even though most procurement departments are conditioned to look for deals, far too many completely overlook the possibility of negotiating. Simply put, as long as it’s done in a reasonable manner, there’s no reason that purchasing managers shouldn’t negotiate.

Making Major Decisions in Isolation

One of the roles of a procurement department is to keep things moving along smoothly for the entire company. While it doesn’t make sense to seek input for every purchase, there are times when the department should loop others into the conversation prior to making a final decision. By opening up the lines of communication, a procurement department can avoid the wasted time and resources that go along with making an incorrect decision that then needs to be corrected.

Contact Bellwether Purchasing Software today to learn more about our purchasing software and how we can help you avoid these costly mistakes.



May 12, 2015
BY Bellwether
What’s the Biggest Negotiation Mistake Procurement Departments Make?

We’ve recently written about the fact that many purchasing managers don’t negotiate at all when they speak with suppliers. We have also gone over some of the strategies that purchasing managers can use to successfully negotiate with suppliers. While this has allowed us to cover many of the best practice for procurement negotiations, there’s still another topic that we want to touch on.

Although many procurement departments don’t negotiate, there are those that make negotiations a standard component of how they run. However, just because a procurement department has a standard process for negotiating doesn’t mean that they’re doing things in an optimal way. Forbes recently covered a common mistake that’s made by procurement departments in the logistics space and other industries.

Not Knowing When to Give a Little

The negotiation mistake that the Forbes article addressed was procurement departments getting too aggressive with their terms and conditions. Specifically, this is an issue that has started to become quite widespread over the last few years. The problem with this trend is instead of using the industry standards that have been in place for a long time, companies are making the decision to come up with their own rules and contract terms. By doing this, they end up putting an unreasonable amount of risk on their service providers and carriers.

So, what happens when procurement departments put themselves in this position? Although they may be operating under the belief that they’re in control, the reality is that taking an overly aggressively stance can negatively impact the leverage that a purchasing manager has during the course of negotiations. Once a supplier realizes that they’re dealing with a department that has unreasonable demands, they’re going to be far less motivated to make the deal work than if they only had to meet in the middle on more reasonable terms.

How to Remedy This Problem

Since this trend has become a noticeable issue, many companies are looking for ways to remedy it. The good news is there are several steps that can be taken to get negotiations on the right track. The first is to hire and train the right candidates. By ensuring that purchasing managers understand the optimal approach to negotiating and have the skills to carry out this process, aggressive tendencies can be eliminated.

The other step that companies should take is ensuring they cultivate a culture that’s focused on a long-term vision. While it is true that really squeezing the terms of a deal can seem like a win, any gain is only temporary. If a company wants to build a mutually beneficial relationship that will help it thrive over the long-term, this is a mission that needs to be shared with everyone in the company.

Let Bellwether Purchasing Software help your company improve supplier neogtiations with our flexible and comprehensive purchasing software. Contact us today to see why Bellwether Purchase Software is the software to choose.



May 12, 2015
BY Bellwether

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