Procurement is a critical part of business operations. It’s more than just buying goods and services. It involves strategic planning, supplier evaluation, contract negotiation, and payment processing. A well-managed procurement process helps businesses secure the right materials and services at the best price, ensuring smooth operations and strong supplier relationships.
Effective procurement improves cash flow, reduces costs, and strengthens supply chains. When managed poorly, it can lead to delays, overspending, and supplier disputes. That’s why having a clear and efficient procurement strategy is essential for business success.
Procurement is the process of acquiring goods and services that a business needs to operate. It includes strategic planning, supplier selection, contract negotiation, and payment processing. Effective procurement ensures that businesses get the right products and services at the best price while maintaining quality and delivery standards.
There are two main types of procurement:
Businesses evaluate and select suppliers based on pricing, product quality, reliability, and delivery terms. This step ensures that the business partners with suppliers that meet performance and cost expectations.
After selecting a supplier, the business negotiates terms and conditions, including payment terms, delivery schedules, and quality requirements. Strong contract terms protect the business and help build long-term supplier relationships.
A purchase order formalises the order details, including product quantities, prices, and delivery dates. This document serves as a reference for both the business and the supplier.
Once the goods or services are delivered, the business verifies that they match the purchase order and meet quality expectations. Any discrepancies are resolved with the supplier before payment is processed.
After confirming that the order has been delivered correctly, the business approves the supplier’s invoice for payment. This step ensures that payment is processed on time and in line with the agreed terms.
For more details on how to optimise the end-to-end procurement cycle, check out our guide on procure-to-pay.
In Singapore, government procurement processes are regulated under the Government Procurement Act, which ensures that all public sector tenders and contracts follow transparent and fair procedures to promote competition. Procurement process decisions are based on clear evaluation criteria, including price, supplier track record, product quality, and delivery time. Businesses interested in government contracts can access opportunities through GeBIZ (Government Electronic Business), Singapore’s online procurement platform. GeBIZ allows companies to view and bid on tenders, providing a structured and competitive environment for securing government contracts.
Improving procurement efficiency helps businesses reduce costs, improve supplier relationships, and strengthen financial control. Here are practical strategies to optimise the procurement process:
Consolidating procurement data into a single platform improves visibility and control. It allows finance teams to track spending, monitor supplier performance, and identify cost-saving opportunities more easily.
Maintaining a record of preferred suppliers speeds up the selection process and ensures consistency in quality and delivery. Businesses can create a shortlist based on past performance and contract terms.
Generating and tracking purchase orders manually increases the risk of errors and delays. Automating this process reduces human error, speeds up order creation, and ensures that POs are correctly matched with invoices and delivery receipts.
Monitoring order status, delivery schedules, and payment deadlines in real time improves financial oversight and helps avoid late payments or supply disruptions.
Setting clear criteria for evaluating supplier performance (such as on-time delivery rates and product quality) helps businesses identify top-performing suppliers and adjust sourcing strategies as needed.
Regularly reviewing contract terms based on market conditions and supplier performance allows businesses to adjust payment schedules, secure better pricing, and improve supply chain efficiency.
Using automation and digital tools helps reduce processing time and improve accuracy at every stage of the procurement process. For more details on how to automate invoice approvals and payments, explore our page on vendor invoice management.
Summit’s spend management software streamlines the entire procurement process, helping businesses save time and reduce costs. It centralises all procurement data in one platform, giving finance teams a clear view of supplier activity, outstanding payments, and order status. By automating invoice approvals and payment processing, Summit reduces manual work and eliminates errors.
Summit uses OCR (Optical Character Recognition) technology to extract data from purchase orders and invoices, ensuring fast and accurate processing. Real-time insights into supplier performance, payment schedules, and overall spending allow businesses to track and optimise procurement decisions. Summit also ensures compliance with procurement policies and contract terms, helping businesses avoid penalties and improve supplier relationships.
Summit integrates seamlessly with existing financial systems, streamlining the procure-to-pay cycle from order creation to payment. Businesses can improve efficiency, strengthen supplier relationships, and maintain financial control with Summit’s automated solutions.
Ready to simplify your procurement process? Talk to us today to learn how Summit can help your business improve efficiency and cut costs.