Procurement 101

Scale Your Startup With Procurement Software

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15 minutes

Written by

Alan McPhaul

Scale Your Startup With Procurement Software

Startups face a very exciting but unique challenge. They are up and coming businesses trying to establish themselves in a competitive business world. They are small fish in a big pond. They have a small tight knit team that hopes to grow into the next big thing where procurement can make or break their dreams. An e-procurement tool can be a startup's crutch as they try to reach the next level. According to Spending Matters, “Procurement is a prime example of a process that is too often overlooked and can cause issues within organizations that scale quickly without the proper system in place.”

By instilling the right procurement system in the beginning, you can avoid having your procurement being one reason why your startup is stuck in first gear. As startups establish themselves and begin to scale, they often experience growing pains. Workflows that weren’t as extensive in the conception of the company, can potentially grow out of control as the business grows. Procurement being one of the more important workflows can spiral into a mess if you do not have the right management solution in place.

Below we will explore how startups can take advantage of a procurement system and grow using features relating to vendor management, workflow, and accounting that can help take your startup to new heights.

Supplier management features in the procurement software allow startups to source and cultivate efficient and profitable relationships

Purchase order system

As a startup, you have to start from scratch. This means a lot of time and energy being spent on sourcing products and services that you will need to successfully run your business. Procurement software can ensure that this is done correctly with keeping your bottom line in mind.



As a startup, you have to start from scratch. This means a lot of time and energy being spent on sourcing products and services that you will need to successfully run your business. A Procurement tool can ensure that this is done correctly with keeping your bottom line in mind.

Many procurement platforms also have features of a vendor management system. The vendor and inventory management tools help startups find and establish relationships with potential suppliers across the supply chain. Startups can take advantage of the automation quotes requests which allow them to create, communicate with vendors and accept request within the same tool.  

Not only can it help manage communication and relationship with partners, it can also help make decisions on which ones the startup should work with. The procurement tool ensures sourcing is done at the best available cost. Dashboards and reporting features increase visibility into pricing for each item. Different suppliers are compared side by side with the digital procurement software for optimal decision making.


As startups organize and prepare to scale the business, having records of relationships is very important. With the rate of employee turnover in such a fast paced environment, having one place to turn to for important information is important. Procurement management software can help manage the important process of documentation.

Items startups can upload into the software include contracts, certifications, licenses and other important items from the inception of your business relationships. This saves time and headaches when you need to locate this information days, weeks or years later. No more digging through emails, files or folders, the procurement tool is the only place you need to look.

One great feature you're likely to see on the best procurement software is contract management. Startups can let the software manage the life cycle of contracts from start to finish. You can select from a premade template or customize your own terms all within the platform. It also allows you to send contracts, and approve, edit, renew or terminate contracts seamlessly.


Requisitions for the same or similar goods and services can be combined across departments so you can order from your vendors all at the same time. Being able to consolidate orders minimizes the frequency of orders. This will drive economies of scale for your startup so you can cut costs on items, processing, and transportation.

Departments can communicate within the purchasing software to take advantage of this feature. No more emails or traveling to departments to ensure everything is being ordered at the same time from the same vendor. In addition to streamlining inventory and order management, the sourcing and procurement suite also serves as the startup’s hub of communication where all records of interactions will be stored on a cloud-based system.


Visibility into the business relationships are important especially as a startup. A lot of times startups try to build momentum but suppliers might not prioritize the business due to the lack of buying power. A procurement solution has the vendor scorecard feature to ensure suppliers always deliver the quality of service startups deserve.

Within the software, startups can create, maintain and send out vendor score cards. The system can track supplier performance based on delivery times, fill rates and other key factors that drive startup’s revenue.

This supplier management software feature allows startups to keep records over time. This level of visibility ensures relationships stay at optimal levels. Learn more about benchmarking and evaluating vendors through strategic sourcing by clicking here.

Workflow features in the procurement software are created and sustained for startups to reduce maverick spending and safeguard data

Making sure all your staff is on the same page is one of the hardest parts of running a startup. A lot of times building out standard operating procedures and protocols take time and effort. A procurement solution can help.

This tool ensures that team members are only taking approved actions dictated by upper management through workflow features. User permission features encourage team members to stay focused on their responsibilities.


A procurement system provides workflows to streamline and automate approval hierarchies. This will make life easier for startups as well as give them peace of mind. Approval can be set by:

  1. Dollar Amount - customizable spend by user, department, supplier, project or category
  2. User - ensure the right person is the one taking action
  3. Department - ensure the correct department is taking action
  4. Projects - ensure projects are being actioned on when they are supposed to be
  5. Categories - ensure action is being made through the correct customizable categories
  6. Supplier - ensure users are actioning within terms and from the right partner

Approval workflows can be instilled at any point in the source-to-pay process. This can be done from the very beginning of the process (with approval of requests for quotes and requisitions), with processes in order, or at the very end of the process (with approvals of invoicing). A procurement tool would also double as a spending management system, protecting your startup against maverick spending at all levels.

Startups can benefit from approval notifications as well. Once approval is required, the approver will be notified instantly. This provides an additional level of convenience by having the option to notify the user by email and text as well as within the software itself.

As a startup, wearing a bunch of different hats and performing a variety of job functions is the norm. Being notified in a variety of different ways through the procurement tool ensures approvals aren’t missed and can be actioned on in a timely fashion even while working remotely anywhere in the world.

The ability to establish approval hierarchies and notify only the designated user when it is time for them to approve or reject items is an added bonus. This means users will no longer see notifications for actions that do not require their attention. Users can of course be notified throughout the approval hierarchy if they wish but the option to not be pestered with notifications is an underrated feature that'll be useful for the entire procurement process.

The best part is that this workflow is optimized for efficiency within the tool. Not only can the user customize the workflow to their desired settings for notifications with hierarchies, they can also set exemption workflows as well.

If there are users, departments etc. that do not need approval for action, the software can allow them to move forward without the need for approval. Time is money, especially in a startup environment and this feature saves everyone's precious time. With this feature, receiving and waiting for unnecessary approval requests are avoided.


A lot of times, startups are trying to build a market based on proprietary information or solutions. In situations like this, privacy is of utmost importance. Procurement tool's ability to restrict user’s access to parts of the business can be beneficial for protecting information and in keeping everyone focused on their role in the success of the business.

Being able to restrict movement solidifies departmental or individual users' role within the procurement process. Permissions can be set for each employee on the platform to keep them on track at all times.

Using user permission functionalities within the tool also allows for each employee to have their own unique view. Customizable dashboards for each employee ensures order and facilitates efficient task management. Users will only see what they need to see and they'll not be sidetracked or confused.

Accounting features within the procurement solution ensures startups remain fiscally responsible

Procurement Tool


Fiscal responsibility is key to the survival of any business. For startups it is especially important as they need to account for every dollar. A procurement software solution can ensure your business is scaling and running in a sustainable manner through a variety of budget management and accounting features.

Procurement software records business spend. This happens at the individual, departmental, supplier, category and project level. This level of detail enables startups to see exactly where each dollar is going to ensure the cost is worth the benefit. The software has easy to pull and customizable reporting that empowers startups to safeguard against going over budget at any specific level.

Procurement software is smart enough to track startup’s spend and forecast future spend as it relates to the budget. No more surprises! The comprehensive spend analytics will let appropriate stakeholders know when they need to slow spend to avoid blowing the budget. The procurement management system can help prevent the negative consequences of going over budget. Some  of these include:

  1. If the goal is to sell the business, leaks in your spend will make the business less desirable
  2. If the goal is to look for investors, not being able to track spend, budget and revenue will make the business look untrustworthy to potential and current investors
  3. As the business is growing, not being able to account for every dollar is important in reporting to the government and for any type of audits that maybe required
  4. Startups and small businesses are often able to take advantage of financially beneficial opportunities. Not being able to demonstrate fiscal responsibility and good asset management can make the business lose out on items such as grants and donations

The importance of seeing the startups spend need versus actual spend cannot be overstated. This element of a procurement tool serves as a valuable solution that helps businesses to realistically aligns spending with the budget.

With spend and budget reporting in place, startups can pivot and adapt quickly which is key to success in a startup environment. Procurement software can help ensure budgeting is being responsibly managed to ensure the business is operating in years to come.

Startup Leafline was able to attain 1-5% operational cost savings by leveraging spend data to adjust their strategy. They were eventually purchased by Green Thumb Industries in only 7 years of operation. See how procurement software helped this startup on their journey by clicking here.


Procurement software ensures no money is being errantly spent or slips through the cracks. The software provides easy to use dashboards for inputting important financial information while tracking order processes.

With the procurement software startups can automate a three way match reconciliation system. As a centralized source of truth, the software is able to review purchase order, receiving and invoice information and confirm the details for payment.

With procure-to-pay features within the procurement software, you can rest assured human error will not play a role in lack of payment or overpayment of invoices. The software conveniently integrates with accounting software for an additional level of automation. With a few clicks, you simplify the process of reconciling, approving and paying invoices.



Startups typically run on the principle of less is more. Employee count is low but there is no shortage of work that needs to be done. A procurement platform enables startups to operate efficiently with less through establishing and managing sustainable workflows.

Vincent Ryan in an article for describes the concept of spend agility and how it relates to startups. He states, “The thriving companies have what I call “spend agility.” It’s the ability for enterprises to assess, predict, and change spend, investments, and operations strategy in real-time, to capture value-creation opportunities.

Procurement tools provides the means for startups to be agile and adapt.

As the company grows, visibility and management of the procurement processes is vital. Procurement platforms through vendor management, workflow and accounting tools centralize your operations and ensure your startup's growth won’t be stifled by procurement.

Click here if you are interested in structuring the ideal purchasing workflow.

Purchasing Process

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