It’s true that your top priority as a business owner is always going to be the bottom line. Dealing with the proper procurement methods can be more complex than that, though.
There’s procurement compliance to deal with, for instance. There are also other legal considerations to remember.
Even leading business experts recognize the value here. They know that there’s a lot to prioritize when it comes to proper procurement strategies.
The good thing is that you’ve come to just the right article to get started. Detailed below are the top seven things to remember about procurement. Keep reading to ensure you’re staying ahead of the game.
Develop Clear Policies and Procedures
This first tip helps set the standard for all procurement activities. It provides guidelines for employees concerning procurement and compliance, too.
Policies and procedures should cover all aspects of procurement. This includes many things. Consider the request for a proposal or even the final award of the contract.
They should also define roles and responsibilities for procurement activities. The policies should address conflict of interest and ethical considerations, too.
It’s important to have clear and comprehensive procedures in place. That way, companies can reduce the risk of non-compliance. This can ensure that procurement activities are carried out in a consistent manner.
Having clear policies in place also helps to streamline procurement activities. Employees can quickly reference the policies and procedures as needed. They then just have to search for information or rely on personal experience.
Keep Employees Well-Trained
Providing regular training sessions on procurement compliance is essential. This can help employees in many ways. It demonstrates the importance of following established policies and procedures.
The training should cover all aspects of procurement. These could include ethical considerations, for example.
Also, the training should be tailored to the specific needs of each employee. By doing so, companies can reduce the risk of non-compliance. Regular training also keeps everyone up-to-date with procurement laws.
Maintaining Accurate Records
Accurate records help to provide transparency and accountability. These can be used to demonstrate compliance with policies and regulations.
This includes keeping track of all procurement activities. Examples might be requests for proposals, contracts, and invoices.
Accurate records also help companies to monitor and evaluate procurement activities. It helps to identify potential compliance issues. You’d be able to detect any instances of fraud or corruption.
In the event of an audit, accurate records are vital. They can be used to support procurement activities. They can also demonstrate compliance with policies and regulations.
Staying organized is key here. Perhaps that’s why procurement-as-a-service generated over £2.5 billion throughout the world.
Understand the Risks of Non-Compliance
Non-compliance with procurement policies and regulations is serious. It can result in serious consequences for companies. This could involve financial losses, legal liabilities, and damage to reputation.
For example, it can result in the loss of a contract. It might also mean the imposition of fines and penalties. In the worst-case scenario, non-compliance can result in criminal charges and imprisonment.
Further, non-compliance can also result in a loss of trust among stakeholders. This can have long-lasting effects on a company’s reputation.
Perform Regular Audits
Company-wide audits are a crucial aspect of ensuring procurement compliance. Audits help to identify areas where activities may not be complying. They can then provide an opportunity to make improvements.
Audits can be performed by internal auditors or by independent external auditors. They should cover all aspects of procurement activities. That includes requests for proposal processes, contract awards, and invoicing.
The results of audits should be reported to senior management. Any findings or recommendations should be addressed in a timely manner.
Regular audits also help to demonstrate a company’s commitment to procurement compliance. They can provide assurance to stakeholders that practices are ethical and above board.
Addressing Non-Compliance Incidents
Establish a system for reporting and addressing non-compliance incidents. This is critical in ensuring procurement compliance.
This system should provide a clear and accessible process for employees. It should allow them to report any suspected non-compliance incidents. It should also outline the steps that will be taken to investigate and address these incidents.
The reporting process should be confidential. Employees should be able to report incidents anonymously if they choose.
Companies should also establish a clear process for investigating incidents. This might involve determining the extent of the non-compliance, for instance. Additionally, it might be about identifying the root cause.
Take corrective actions to prevent similar incidents from happening in the future. Companies should regularly review and update their non-compliance reporting. That way, employees continue to stay informed.
Staying Informed About Industry Developments
Public procurement laws are changing on a regular basis. It’s up to you to stay in the loop.
Stay informed about procurement and any changes in laws and regulations. Adjusting policies and procedures accordingly is crucial. This is the best way to ensure procurement compliance.
Compliance and procurement laws are constantly evolving. That’s why it’s important for companies to keep up to date with these changes.
Companies should regularly review and update their procurement policies, too. That way they can ensure that they are in line with current laws and regulations.
This includes reviewing procurement regulations related to government contracts. It also means reviewing any changes to relevant laws and regulations. For instance, consider anti-corruption laws.
Companies should seek legal advice when necessary. This is ideal to ensure that their procurement policies are in line with current laws.
In these ways, companies can reduce the risk of non-compliance. It’s critical to carry out procurement activities in an ethical manner.
Invest in Reliable Procurement Solutions
Now, you’re more familiar with procurement compliance. So, it’s time to act. You want to ensure you’re standing out ahead of local market competitors, after all.
That’s where Delta eSourcing can help. Request a FREE Delta demo today.