AP invoice automation insights by Medius

On-demand webinar Accounts Payable and the Data Driven Future Watch Now
Self-Assessment Checklist What is your AP organization's level of automation? Download Checklist
On-demand Webinar: How AP Automation Supports 2019 Business Goals Learn More
White Paper The Modern AP Manger's Automation Toolbox Download Now
On-Demand Webinar Prepare AP for the Age of Digital Transformation Watch Now
On-Demand Webinar Top 3 KPIs AP Needs To Know Watch Now

What Is E-Procurement?

Procurement is the third process in the Source-to-pay landscape, falling after sourcing and contract management, and before supplier relationship management, invoice management and payment.

Formally known as electronic procurement, e-procurement refers to business-to-business, business-to-government or business-to-consumer purchase and sale of services, work, and supplies online along with related information and networking systems. Procurement is the third process in the Source-to-pay landscape, falling after sourcing and contract management, and before the supplier relationship management, invoice management and payment.

The thoughtful handling of procurement plays a significant role in running a profitable company and remaining relevant in the modern business world. Companies cannot produce and compete without the right goods and services to fulfill their obligations. Maintaining these relationships is crucial to future success. Automated procurement solutions provide robust features to stay ahead on top of purchases, approvals, invoice matching ,and payment.

What Are the Steps of the E-Procurement process?

A new study published by Aberdeen, “E-Procurement: Trials and Triumphs,” revealed the measurable value e-procurement offers organizations by streamlining processes, cutting costs, and enhancing vendor relationships. The study found organizations saw an average 35 percent improvement of spend under management, requisition-to-order cost was reduced by 48 percent, and there was a 41 percent reduction in maverick spend. Plus, e-procurement initiatives help cut transaction time in half. 

The steps of e-procurement include:

Requisitioning. A user generates a document called a requisition or purchase request to notify the purchasing department of items that must be ordered, the quantity, and the timeframe in which they must be received. The workflow process is initiated when a new Purchase Requisition is generated to purchase an item. Requisitioning is based on spending authority information and approval.

Approve requisition. Authorization to continue with the intended purchase is referred to as approve requisition so the buying process can continue to move forward. The Purchase Requisition is forwarded to the purchasing department or the relevant stakeholder/budget holder  to get approval to order the necessary items.

Create order. The approved Purchase Requisition document is then used to create a Purchase Order to the supplier to get the necessary goods and services for production and distribution. The PO is sent from the purchaser to the supplier with a request for the approved order and becomes a binding agreement between the parties. There are mainly three different purchase order formats to consider.

E-catalogues are used mostly for procuring regularly replenished indirect goods and services.The main benefits with catalogues is that it provides detailed spend data as each item in the catalogue can be connected to a purchasing category (for example via UNSPSC) and be given a contract reference which allow to follow up on contract compliance. Challenges include keeping the catalogue items, prices, terms and conditions up to date and in accordance with the latest version of the companies agreements.

Another method is punchout, where the system enables a buyer to access the supplier’s website from the buyer’s system, leaving the procurement application to enter a web-based catalog to shop and make purchases via the application. 

Another is free text order sent by email to the supplier to specify the details of a purchase, often used for non-recurring orders, orders with fixed quantities or dollar amounts, or when a punchout catalog is not available. 

Free text can be compared with sending an email to the supplier that specifies the details of the purchase. Even though detailed purchasing data isn’t captured in the same way as in catalogues using the procurement system rather than email or phone to place the order strengthens the approval process around purchases as the purchase is approved before it actually happens rather than after when the invoice arrives.

Send order to supplier. Once a Purchase Order is generated and approved, it must be forwarded to the supplier and tracked for receipt and payment. The supplier must typically the god within a specific period of time in accordance with the terms outlined in the Purchase Order document.

Receive goods or service. Once the ordered items are received, the order must be available for invoice matching to ensure accuracy. Typically, a Goods Receipt is generated to match with the invoice and make timely payments to avoid late fees or penalties.  

Functionality to Look For in a e-Procurement Solution

A robust automation solution establishes a pre-approval purchase model to regain control of indirect spend. Plus, it leverages automated invoice matching to speed up processing indirect spend invoices. The system eliminate maverick spending while improving the accuracy of financial reports to eliminate unpleasant surprises. provides purchasing and payment updates in real-time to help the financial team interpret this data and stay on track. Research after research shows that to remain relevant in the modern business world companies benefit from digitizing their procurement processes. 

Related content
Why Your AP Process is Key to Successful Strategic Sourcing ABC's of Automated Invoicing and Cloud Computing Market Report How to Improve Working Capital By Adopting a Strategic Approach to Accounts Payable How To Fend Off Accounts Payable Fraud Schemes (Cyber Infiltration)