Better Agreements at Each Stage of the Procurement Process
Whether it’s acknowledged or not, every company has a system of agreement. Sometimes, it’s a haphazard mix of structured and random efforts—multiple steps tracked in a shared spreadsheet, some pieces buried in email inboxes and others stored on someone’s computer desktop. These agreements are vital to procurement processes, detailing exactly what goods/services are being purchased, how they will be delivered and how the vendor will be paid.
The first step in building a modern agreement procurement workflow is to audit the existing agreement process, detailing exactly how organized or disorganized it is. Once that process has been defined, the procurement team can take steps to streamline that system of agreement. Here is a breakdown of four important stages to optimize throughout the procurement process and the types of contracts involved in each stage:
Pinpointing exactly the right vendors to provide high-quality goods and services is critical for any procurement team. However, it’s not enough to just discover the best vendors, organizations have to then convince that vendor to agree to a contract. An easy way to attract the best vendor is to streamline the paperwork in the sourcing process. This is an early signal to vendors that the organization will be easy to do business with throughout the lifecycle of a business relationship.
If it’s quick and easy to generate, send, sign and manage contracts, the agreement process will improve for everyone, including internal stakeholders who will deal with those suppliers directly. The DocuSign Agreement Cloud for Procurement provides maximum visibility for every party and can cut the agreement time down to just minutes by enabling signatures from virtually anywhere, anytime, on any device.
Common sourcing agreements:
- Requests for proposal (RFPs)
- Sole source justifications
- Nondisclosure agreements (NDAs)
- Master service agreement (MSAs)
- Service level agreements (SLAs)
- Risk waivers and exceptions
Nothing slows down payment like manual entry processes. Transferring data from one system to another by hand takes a long time and introduces opportunities for error or duplicate work. Timely, accurate purchasing agreements are at the core of healthy relationships between organizations and their preferred vendors.
When it comes to PO approvals, it’s best to reduce or eliminate manual processes as much as possible. The DocuSign Agreement Cloud simplifies purchasing by automatically transferring data between integrated systems, enabling predefined routing automation and streamlining approval workflows to ensure that purchases happen at the speed that business requires.
Common purchasing agreements:
- Purchase requisitions
- Work orders
- Purchase orders (POs)
- Statements of Work (SOWs)
Procurement teams lack visibility into the plethora of supplier contracts utilized across an organization. This creates challenges in managing cost, quality and compliance. Managing contracts as a series of one-off agreements is unsustainable as an organization scales. A strategic centralized system of agreement provides contract visibility for every stakeholder, allowing the procurement team to spend less time updating various people about contract status. By providing a central repository for standardized clauses, a contract lifecycle management is an easy way to ensure compliance across various agreements and decreases risk.
The DocuSign Agreement Cloud provides analytics to help negotiate supplier terms and improve performance. It also offers the opportunity to add AI to the system of agreement with DocuSign Insight, which reduces cost and risk by increasing access to historical agreements, pinpointing terms that correlate with certain outcomes and highlighting differences between a current agreement and a similar archived version.
Common contract management processes:
- Contract enforcement
- Agreement review
- Version tracking, alerts and status tracking
- Legal Redlining
Invoicing and payment
A modern system of agreement uses digital technology to create new efficiencies. New agreement tools allow any organization to automate the processes necessary to complete invoicing and collect payment across credit requests, financing requests and more. When integrations can share data and automations can manage repetitive steps in these processes, the process moves faster, reduces costs and increases accuracy. Cutting manual data entry out of this process is better for every stakeholder. It’s also an easy way to avoid compliance mistakes, which can result in costly penalties.
Making it easier to collect and distribute payments is an easy way for procurement teams to improve relationships with suppliers. No one wants to be left unsure of when their payment will come, how it will be sent or what amount will be delivered. The DocuSign Agreement Cloud ensures stability at this important part of the process, maintaining healthy relationships between organizations and their suppliers.
Common invoicing/payment processes:
- Invoice processing
- Payment collection
- Financing agreements
To learn more about the tools used in today’s most effective workflows, read Building a Modern Agreement Workflow for Procurement. It’s full of information about the benefits of digital technology and even goes into detail about the most important tips for designing a modern procurement system.