A beginner’s guide to finding the perfect procurement software for small business success

Managing small businesses is a balancing act with a fair share of challenges and rewards. The right SaaS tool can be transformative as it streamlines your processes and catalyzes growth. 

However, the challenge lies in selecting the most suitable tool that aligns with the current business setup and accommodates future expansion plans. This is a prerequisite for maximizing the efficiency and impact of your chosen solution.

In this journey to find the perfect SaaS tools, streamlined procurement reduces the complexity and time involved in selecting and managing SaaS tools. However, 30% of organizations take up to 60 days for SaaS procurement, with larger organizations often taking longer.

This article will deconstruct the fundamentals of SaaS procurement from the perspective of small businesses. We also explore the key factors entrepreneurs must consider during the procurement process to help their businesses hit the ground running.

Procurement software for small business: Why should you use one?

First, let us explore what is procurement software. It is a digital solution that automates and streamlines the purchasing process for businesses. The tool automatically manages tasks from vendor selection and contract management to order placement and payment processing, enhancing efficiency and compliance.

Here are the five ways procurement tools can help small businesses thrive:

1. Enhanced operational efficiency:

Procurement goes beyond simply selecting and getting the first solution that you come across. Many processes and considerations are involved that a small business might not be equipped to deal with, including:  

• Determining specific business needs
• Researching available SaaS solutions for the best fit
• Evaluating costs, including subscriptions and scalability expenses
• Assessing the credibility and reliability of SaaS vendors
• Negotiating terms and conditions with vendors

To iron out these roadblocks, procurement automation can streamline the workflow and allow your team to focus on strategic tasks rather than get bogged down by these requirements.

2. Cost saving and budget optimization:

The best procurement tool would allow you to save a considerable amount, i.e. up to 30% from your SaaS budget.
For example, an AI-driven procurement automation platform like Spendflo will enable you to make informed purchasing decisions, negotiate better deals, and track expenses more effectively.
With a clearer understanding of expenditure patterns, you can allocate resources more effectively and ensure that every dollar spent contributes to your brand’s overall growth.

3. Improved collaboration:

‍Many SaaS procurement solutions come equipped with collaboration features that facilitate seamless communication among team members, vendors, and stakeholders. This fosters transparency in the procurement process and reduces the chances of any misunderstandings and delays.

4. Data-driven decision-making:

Modern SaaS procurement tools provide robust analytics and reporting capabilities. Whether it's vendor performance analysis, expenditure trends, or market intelligence, having access to comprehensive data can help you strategize effectively and stay ahead of the curve.

5. Compliance and risk management:

SaaS procurement software for small business often comes with built-in features to ensure regulatory compliance and risk management. This is especially crucial for small businesses dealing with strict industry regulations.
Moreover, automated compliance checks and risk assessments help businesses stay in line with legal requirements and avoid potential penalties down the line.

9 factors to consider while selecting a procurement software

Managing small businesses requires tailored approaches, especially when selecting SaaS tools. An automated procurement software should specifically cater to the unique landscape of small businesses. 

To be particular, this includes offering customization and flexibility to adapt to distinct workflows, providing cost-effective solutions within tight budget constraints, and ensuring ease of use and implementation due to limited IT resources. Additionally, scalability is crucial to adjust to rapid market changes. 

Therefore, while selecting the best procurement software for small business, you’ll need to understand the intricacies of your business. Based on your assessment, develop a personalized strategy.

To help you with this task, here are the nine factors that you can consider and get started today: 

1. Identify Business needs and goals

Start by pinpointing your specific business needs and long-term goals, whether it's cost reduction, process optimization, or scalability, which is often the primary concern for small businesses. Understanding your objectives will guide you in selecting an automated procurement software that serves your distinctive requirements and keeps your software selection on track with your business strategy. 

2. Key requirements and functionality

Naturally, small businesses are not supposed to have the same budget as a large company. So, you’ll probably have to be cautious before spending money on a new SaaS tool. To find the perfect tool, ask yourself:

• Are the features and benefits it provides essential for your business? 
• How does this tool integrate with your existing technology stack?
• Is the pricing model sustainable for your business in the long term?
• Does the tool offer sufficient customer support and resources for your team's skill level?

Also, simple yet effective prioritization methods like the MoSCoW can help you track the functionalities you need to focus on. 

3. Budget and ROI

When considering procurement software solutions, balance budgetary constraints with potential ROI. While cost is a paramount factor, focusing solely on upfront expenses might overlook the long-term value a suitable SaaS solution can provide. 

A suitable tool, although initially more costly, can offer significant ROI by enhancing efficiency and productivity, thereby justifying the investment over time.

Consider the people-centric HR technology Betterplace’s example. They were able to save 100+ hours and 4x their ROI by streamlining their SaaS buying. 

4. Intuitiveness

Even the most advanced tools will be of no use if your team doesn’t understand it thoroughly. A user-friendly interface minimizes the learning curve and ensures that your team can quickly adapt to the new tool. With the right choice, your team can enhance its productivity from the outset.

5. Scalability and future growth

This is perhaps the most crucial factor when selecting a procurement tool for your organization. The most suitable tool should adapt to dynamic volumes of users, locations, and transactions. This helps avoid the need for frequent changes to your core SaaS tools as your business expands. This proactive approach ensures smooth transitions during growth phases and prevents potential disruptions.

The best course is to look for a tool that offers multiple tiers of services for growing businesses. This way, you’ll simply need to opt for a new feature you need at present and continue focusing on building your business.

6. Integration with the existing system

Ensure seamless integration with your existing tech stack, including existing ERP, accounting, or other relevant systems. The best procurement software should also complement your current SaaS tools to rule out any compatibility issues and facilitate a cohesive workflow.

7. Data security and compliance

Prioritize the security of sensitive data and compliance with relevant industry regulations, such as GDPR, CCPA, HIPAA, etc. Assess the software's security measures, data encryption protocols, and ability to adhere to legal requirements. A secure solution protects your business from potential risks and ensures data integrity.

8. Vendor selection and support

Evaluate the reputation and reliability of the software vendor. Look for a provider with a track record of delivering quality products and excellent customer support. Effective vendor management can be instrumental in resolving issues promptly and ensuring a smooth implementation process.

9. Implementation plan and training

Consider the implementation plan and training resources provided by the vendor. A well-structured implementation plan coupled with comprehensive training materials can facilitate a smoother transition for your team.

How can Spendflo help? 

Spendflo stands out as an ideal tool for small businesses seeking the best procurement software. It addresses key challenges like cost saving, enhanced operational efficiency, and improved collaboration. 

Spendflo also ensures compliance and risk management by offering data-driven decision-making, which are crucial for small businesses. Its AI-driven platform allows for better negotiations and spend tracking, optimizing budget allocation.

Learn how Spendflo's solutions enabled Tabby to achieve a 4x ROI in just six months, standardize their SaaS contracts, and gain comprehensive visibility into their SaaS expenditures.