How to Make Your Purchase Approval Process Super Fast!

Do you know how much time your finance team is spending on chasing approvals? The average team loses around nine hours a week of finding, you know, chasing down purchase requests. And if your inbox looks like a graveyard approval emails, you're probably making one of these costly mistakes. In this video, I'm going to cover five mistakes which you might be making in setting up your approval process and fixing them. How it can improve your productivity and also helps you close books faster and stick around till the end. Because I'll share one mistake which everybody doesn't think about when they are setting up their approval process. But if done right, that can drastically improve the approval cycles. So if you're joining me for the first time, welcome. My name is Sachin Sharma. I'm the founder and CEO of Procuredesk where we help growing companies control spending by automating their purchasing and AP processes. So let's jump right in. Number one is the email approval trap. So what I mean by that, everybody rely on emails for approvals, right? So what that means is if you are a busy executive, that's another email in your inbox and people are chasing you to get approvals done. And that's obviously one issue because the employees don't have status of where the request is from an approval standpoint. But it also causes another problem which is compliance problem. So let's say auditors come asking for proof of approval. You really have to spend time going through your emails and finding it. And if you're a busy executive, you probably don't have that time. So the way to fix that is implementing a centralized process for approvals. It could be a simple form everybody fills in or anything that works in your organization or, or you could just use a, I would say specialized purchase order software like Procuredesk to automate the process. But the goal is it should take it out of emails, put it in a system. Mistake number two is one size fits all. And we see this in growing companies where owners or CFOs want to see everything that is being purchased. In theory it makes sense. But imagine if you are a CFO owner. You have to actually approve everything whether your employees are looking for a $10 pen or a thousand dollar laptop. And that doesn't scale. So the way to do this right is set up approval draf routings based on your spend, right? Your focus should be that 20% of your spend or 20% of your transactions that contributes to 80% of your spend should be approved by a CFO or an owner, right? So that way you focus on large ticket items, not on every small purchase. That's happening within the organization. Number three is the information vacuum. So what do we mean by that? Let's say you are a busy executive. You get a request for approval for buying a new laptop and that's all there is. The employee doesn't tell you why they need it. Maybe it old laptop is stolen or it's a new hire in their team, they didn't tell you which budget is going to hit, and so on. So what are you going to do? Right? You just reach back to them, wait for them to provide the information and then approve and that caused delays. A simple way to fix that is in your information capture process. Make sure you have a field for justification so that they can tell you why they need it. You are linking it to your budgets so that you know what budget it's going to hit so you can make an informed decision in a quick way. Number four is the mobile blind spot spot. So what I mean by that is if you have a system that's designed for only work on a desktop or a browser, it definitely causes problems, right? So if your executives are traveling, you're waiting for them to come back. And when they come back, everything is piled up including approvals. So good luck getting anything approved. So the best way to do this is having a purchasing system that not only supports desktop approval, but also have the ability to approve from a mobile app or if nothing else, at least approve from an email. So that's easy for the busy executives to approve as and when they're going to go through it. Number five is the data is connected. So you have a purchasing system or a process where the documents are getting approved, but they are not moving to your accounting system. Right? So you have two systems. So you first entered in here, second enter in here. And that one is not efficient. It's prone to errors. But also disconnected systems cause havocs when it comes to audit. So which system have to basically prove that you did the same thing in two different systems. The easy way to fix this is have the approval process linked to your accounting system. So as and when a document is approved, whether it's a purchase request or an invoice, it automatically gets sent to your accounting system without the need for any manual intervention. So those are the five mistakes. Fixing them will greatly improve your approval process. And now let's talk about the bonus and that is the legacy loyalty problem. So what I mean by that, there's been so many buzzwords. So when you, when a company is growing. Let's say Today you're a $10 million revenue company and in three years you're going to be 50 million, not the same company. So why your purchase process has to remain the same. And that's the biggest mistake we see where you have a process that was designed for a company when you are smaller and you're trying to use the system when you're scaled up right. So the easy way to fix that is have a six months or a yearly review of your purchasing policy to see whether the policy is still working for you or if anything needs to be changed so that you can keep the process efficient. So just a quick recap, here are the five productivity killers from an approval process standpoint. Point. Email based approvals create accountability issues. Generic workflows that waste executive time. Number three is missing context. So that leads to kind of back and forth desktop only based processes because executives can't approve if they're not in office and disconnected systems that create financial blind spots. So if you like this video, feel free to subscribe. Hit the subscribe button so that you get notified next time when we release content like that. Until the next time, see ya.