The success of purchasing activities in your company depends on how reliable the procurement system applied is. If it’s quite effective, the purchasing activities should not meet any significant problem. However, if it’s the opposite, you should be ready to face common purchasing mistakes.
Yes, it’s true that purchasing will be easier and risk-minimum by using automated purchasing software, but we can’t remove human’s roles completely. There are things that a computer can’t accomplish.
Here are five common purchasing mistakes that you need to watch.
Going over the established budget is the first common purchasing mistake. It usually happens because the company purchases too many products or services at the beginning. A poor manager can also be the cause of it.
To avoid this, the management must create a purchasing plan before making any payment. Then, execute the purchasing according to the plan. You can also consider creating monthly budget planning.
However, this problem should not be a burden to your company as long as you utilize the purchasing system. A good system will pop a notification up if you have exceeded the established budget.
Not connecting with the suppliers
It’s a mistake to connect with a supplier solely during the purchasing process. Beyond that, you should build a solid relationship with your partners because it will drive you many advantages. By having a strong relationship with them, they can give you advice regarding the purchase activity or recommend products that will benefit you.
Without routine communication, you will lose the opportunity to save cost, receive promotions, or being offered new products.
Developing a close relationship with your partners is as equally important as building a relationship with your clients. So, make sure you get their recent update, subscribe to their newsletter, or at least follow their social media. If possible, schedule a call with them to make it more personal.
Not negotiating with vendors
You might think the pricelist handed to you is a fixed price. Well, you’re not wrong. However, it’s worth trying to bargain repeat orders with the vendors you’ve known for a long time.
In order to do that, keep it professional. Bargain at a reasonable price. Don’t let this negotiation ruin the partnership you’ve built for many years because you’re asking something that doesn’t benefit your partners.
Rushing in decision making
Sometimes, a purchasing manager makes a decision fast without thinking about other strategic options. It’s true that quick thinking is a skill that a manager should master. However, note that it’s a good sign if you can only master the quick-thinking without intervening in the budget or workflow.
Moreover, rushing in making decisions without weighing other factors such as tempted with cheap prices will not benefit you in any way, especially if it turns out the product quality is poor.
You should always think about the impact of any purchase you make. Do not rush and act impulsively. Set up a standardized procedure and process so that the purchasing process works well with your strategic planning.
Making major decisions in silence
Yes, we get it. You want your purchasing processes to be swift with fewer problems. Yet, don’t do it the wrong way. Most of the time, when a manager wants to work on something fast, they don’t involve many parties. It will be a disaster especially if the decision will affect many departments. This action will backfire you and cause you a great loss financially.
Make sure that you always consult the authorized people before making a major decision that applies across departments. Their input and approval will prevent unnecessary problems and complaints in the future. Set up a clear communication line before making any purchase.
Use Internal Collaboration software to enhance communication within your office. It will help you create a seamless communication path.
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