5 Most Common Procurement Mistakes & Ways to Avoid Them

5 Most Common Procurement Mistakes & Ways to Avoid Them

Common procurement mistakes can quickly escalate into procurement nightmares. Operating with an ineffective system will result in too many joint procurement and purchase issues. Fortunately, the most typical procurement mistakes have clear and simple fixes. We’ve listed five of those procurement mistakes in this article and shown you how to avoid them.

Photo by Kenny Eliason on Unsplash 

1. Lack of Negotiation

The majority of the time, you think the price you see is fixed. And you’re usually correct. However, if you expect to keep a long-term connection with a supplier, it may be worthwhile to inquire about repeat order discounts.

It is evident that your proposal should be presented professionally. Remember that pressuring your providers will annoy them. It’s one thing to work out a deal that works for both sides, but it’s quite another to try to haggle the price down every time you place orders.

2. Lack of Interaction with Suppliers

Suppliers are usually a fantastic source of information on available products and the greatest deals. Maintain a positive partnership with suppliers and stay on top of their current interactions so you don’t miss out on anything that could help your business. You might be able to get a nice discount or be one of the first to try out their new items.

Automation may help you here by allowing you to build up a supplier self-service platform. This will enable suppliers to update their data, provide missing documents, and obtain solutions to customer service concerns by logging into your system. These tools let you and your vendors communicate more effectively.

3. Overspending

Overspending is usually a problem associated with a lack of communication and organization, assuming that you and your team are not prone to excessive spending. Regardless of the underlying issue, this is not something that you can overlook.

Regular financial updates might help alleviate this typical procurement issue. Make sure you’re speaking with all of the supply chain’s members and that everyone is on the same page when it comes to spending limitations. You can also use procurement solutions to enhance your purchasing controls.

4. Impulsive Decisions

Buying on the spur of the moment might lead to unwise decisions. While timing is vital, it’s also a good idea to look for the best value and double-check with experts in your business (particularly for large orders) to make sure you need to have the items and find out how much you should order.

Purchase order systems can help resolve this issue by storing past orders in a searchable database. This makes calculating the quantity of each product used before and needed for the future much easier. The software also monitors to ensure that no duplicate orders are placed too close together.

5. Lack of Flexibility

In today’s fast-paced corporate environment, inflexibility can be detrimental to your procurement. You can’t respond fast if one of the suppliers runs out of a product you want or if another supplier gives you a better price if the procurement system is too tight and heavy.

Bottom Line

While you should carefully consider all of the above items, you should also remember not to go overboard. You’ll need to find a balance between all of these five areas to streamline the procurement process and be ahead of the curve.

One of the simplest methods to improve procurement and correct typical purchasing errors is to use a cloud-based procurement like Penny’s. All you need to do is contact us and let us provide a solution tailored to your needs.  



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Frequently Asked Questions

Penny is a cloud-based Procure-To-Pay system. penny helps you digitize and manage your full procurement cycle from request to approval. Manage RFQs to vendors, compare quotations, send POs and even payment. penny was designed to make things easy and consolidate all of your organization’s spending needs into one intelligent system.

  • Allocate, manage and monitor budgets by expense accounts, projects, departments, location, teams..etc 
  • Streamlining procurement means requests, approvals, and POs won’t be lost in emails or offline.  
  • History and records of requests and purchases can be extracted and tracked easily via the platform. 
  • Product requests are more accurate through the catalog, and hence avoid purchasing mistakes.
  • Reports and analysis can be extracted from the platform, giving you a consolidated data center for all your procurement activities.
  • penny is cloud-based and an easy to use platform. The action-board gives your team a user-friendly and simple experience.

Yes, penny is designed to handle complex procurement operations. We make EVERYTHING simple. Via the contract management feature, you can set the terms and conditions of your contract, and the system will recognize the products and the vendors of your request and match it with specified terms of your contract. Easy.

Putting you in control of your spending is integral to our mission. penny allows you to create Expense Accounts that match your P&L, and assign budgets to them. For example, you can assign $X for your “Travel Budget” and reflect on the budget before approving a travel request. In addition, penny allows you to set budgets for cost centers like projects, departments, locations, and so much more. With penny, you can extract reports and view your spend per Expense Accounts or cost center.

Yes. If your product search finds no results, you can submit a non-standard request.

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