Procurement management is a necessary process for any business that wants to consistently access the resources they need to operate. Procurement is a component of the larger supply chain management (SCM) function, dealing with internal and external procurement processes. Procurement encompasses a range of activities involved in obtaining goods or services, including gathering business requirements, sourcing suppliers, tracking the receipt of goods, and updating payment terms. The procurement management process includes the transactional purchasing of goods and services, and integrates with accounts payable to complete the source-to-settle cycle by providing supporting documents to help with the processing of supplier invoices for payment.
Procurement management is a complex discipline spanning many interrelated activities. It involves the evaluation, selection, and creation of formal contractual agreements as well as managing the company’s ongoing supplier relationships. Effective goods procurement generally relies on good supply chain management practices. Strategic procurement organizations are increasingly adopting integrated, cloud-based software suites that combine supplier management, sourcing, contract management, and proactive risk management with transactional procure-to-pay capabilities. By enabling the company to reliably get the supplies it needs at the lowest cost, procurement can directly impact the bottom line.
