Improving Procurement With Microsoft 365 Business Central Contract Management

A systematic method to procure goods, services, and materials is necessary for any enterprise to run its business smoothly. The cost and quality of their purchase immensely affect the company’s revenue generation. They must rely on vendors to make the most out of the procurement process and get an edge over their competitors.  

That is why establishing efficient procurement management utilizing appropriate strategies and technology is the main priority for businesses. Microsoft 365 Dynamics Business Central provides organizations with a complete overview of procurement processes and workflows. They can access real-time data to get insight into vendors, purchase history, payments, and trade statistics. Now, let us look at what role contracts play in procurement management. 

Significance of contract management in procurement 

Contracts are an indispensable part of any business operation, especially procurement management. They assist businesses in obtaining goods and services at predictable costs. Contractual agreements enable both parties to reach mutually advantageous conditions and guarantee their observance. Also, they dictate the relationship between the company and vendors.  

Over the years, businesses have been adopting digital technology to handle purchase orders and supplier contracts. All professionals agree that management software is the way to get better results and shorter processes.

Organizations can take procurement management to the next level by integrating Microsoft 365 Business Central with contract management software. They can utilize a single platform to handle the entire procurement process, from vendor selection to contract negotiation, delivery, and payment. Keep reading to find out how to utilize Business Central contract management to optimize the procurement process.  

How does Microsoft 365 Business Central contract management help with procurement? 

Microsoft 365 Business Central is a popular choice for organizations to streamline their business operations. The system offers an extensive range of features to handle finance, marketing, sales, customer service, and procurement. Integrating this all-in-one platform with contract management software enables organizations to manage procurement contracts efficiently and effortlessly from a unified platform.  

The procurement process starts with vendor selection. Then the procurement team goes through the viable offers to find a suitable supplier. The quality of the product, cost, and delivery time all influence the choice. Once the vendor is selected, the legal team uses the information extracted from the procurement team to create effective contracts. The contract management process for procurement contracts includes negotiating contractual terms, managing vendor relationships, coordinating with stakeholders, and ensuring payment and delivery. Here is how you can do all that and more with Microsoft 365 Business Central contract management.  

• Vet vendors 

As part of the procurement process, organizations must vet vendors to ensure their credibility and competence. A centralized system for accessing supplier-related data can greatly enhance the assessment process. Integrating contract management software with Business Central enables the procurement team to access executed procurement contracts, contract performance, and more. They can utilize this information to determine renewing vendor contracts. Extending existing contractual agreements is faster and easier than scouting for suitable new suppliers.  

• Convert best offers to orders 

Once vetting is done, enterprises must prioritize suppliers based on revenue potential. A drawn-out vendor onboarding process can lead to organizations losing out on profitable opportunities. That is why companies require Business Central contract management to accelerate the whole procurement process.  

Thanks to the integrated system, users can convert appropriate offers to orders in no time. They can initiate procurement contract requests from within the Business Central platform itself. Thus, organizations can create accurate contractual agreements by importing vendor information from Business Central. There is no need to continuously switch between systems during the procurement process.  

• Overview of the procurement process 

Integrating Microsoft 365 Business Central with contract management software provides a holistic view of the entire purchase history. From the centralized system, the users can easily access vendor details, purchase history, order list, financial summary, and contract data. This extensive insight into the procurement process empowers organizations to predict stock replenishment, delayed payments, and delivery hold-ups. Thus, if there are any bottlenecks in the workflow, the procurement team is equipped to identify and rectify the roadblocks.  

• Assign roles and permissions 

There is never enough time for any business to sift through endless contracts. Thanks to Business Central contract management, users can find necessary procurement contracts within seconds. The integrated system comes with a contract section for the vendor portal. Thus, the users can access contractual agreements within the Business Central team. Moreover, enterprises can set up user permissions to ensure that only relevant access sensitive information. So only people part of the procurement process can access the contracts and documents related to vendors. Therefore, the procurement team does not have to depend on the legal to gain contract data. Also, restricted access means there is no scope for data leakage or unaccountability. 

• Engage with vendors 

The backbone of the procurement process is a healthy relationship with suppliers. Transparency and compliance are the best ways to ensure that. Integrating contract management software with Microsoft 365 Business Central enables enterprises with a unified platform to involve suppliers in the procurement process. The relevant stakeholders can stay on top of the contract lifecycle to provide useful counsel. They can also keep track of purchase history, order details, contract milestones, and more to ensure that they are making the most out of the business partnership. Thus, the integrated system empowers enterprises to build better relationships with vendors. 

• Monitor transactions 

The procurement process does not end with product and vendor selection. The organization must ensure that all the parties involved follow through with the terms and conditions stated in the procurement contract. Timely payment is quite crucial to maintaining vendor relationships. Microsoft 365 Business Central with contract management integration provides easy access to the financial summary of vendors. Users can utilize payment, balance, and order details to stay on top of supplier transactions. It helps organizations to make payments on time to avoid sour vendors and fines.  

Benefits of handling procurement in 365 Business Central contract management 

An efficient procurement process means positive results for both enterprises and suppliers. Integrating Microsoft 365 Business Central with contract management software offers organizations respite from multiple platforms and workflows to complete supplier onboarding. The integrated system comes with a unified system to handle everything from vendor selection to obligation tracking. The following are the advantages of utilizing Business Central contract management for procurement contracts: 

• Optimizing procurement processes

The integrated system accelerates the procurement process by enabling users to import vendor information from the Business Central platform to create accurate contracts. Moreover, the procurement team can initiate the contract request within Business Central to eliminate unnecessary delays between vendor selection and order placement. The integrated system also improves the transparency of the procurement process, enabling stakeholders to identify roadblocks in time.  

• Improve performance and compliance 

When organizations have an extensive overview of the procurement process from a single platform, it is far easier to establish compliance and performance. The procurement team can make use of contract data and financial summaries to ensure that the suppliers are staying true to the terms outlined in procurement contracts. Constant oversight goes a long way to improve vendor performance. Moreover, when they have easy access to executed contracts, the procurement team can effortlessly ensure compliance.  

• Cost savings & Risk minimization 

Access to executed contracts and financial data through the integrated system enables organizations to come up with better purchasing strategies. They can improve their procurement process to eliminate unnecessary charges by choosing financially viable suppliers. Moreover, a centralized system to oversee procurement processes means there are no delays or overdue payments. Thus, by integrating Business Central with contract management software, enterprises can avoid financial and legal risks.  

In short 

Enterprises must be more strategic and systematic in sourcing and negotiating with suppliers. Integrating Microsoft 365 Business Central with contract management software provides organizations with the unique opportunity to utilize both systems to optimize their procurement process. They can accelerate the onboarding process by initiating contract requests within the Business Central platform. Moreover, they can employ the financial summary and invoice functions to maintain productive vendor partnerships.  

Business Central contract management enables the efficient operation of transactions, maintains healthy supplier relations, reduces risks, and resolves issues. Get a live demo today to know more about the countless benefits of contract management software.