By TopUp Mama
Procurement professionals work with many other departments like sales, marketing, operations, and kitchen staff, but in this article, we will look at the relationship between procurement and accounting, and how the two can work in tandem with each other. Procurement is a major function of hospitality businesses as establishments must purchase different items for the various departments to run the company effectively. Owing to the fact that businesses have to keep making purchases, the procurement function needs to work very closely with the accounting team to align on anything purchase-related.
With the digitization of systems and processes across industries, there are solutions to many time-consuming repetitive tasks that limit innovation in today's businesses. Despite many professionals in the industry remaining traditional and not moved by the digital migration, technology continues to take over, and what better time to get on board than now?
Let’s start by looking at how the procurement department works with the accounting department to ensure all functions in the business are running smoothly starting with the most crucial procurement function, purchasing. The procurement department receives a list of items to be purchased. Still, before purchasing, they have to check with the accounting department on the maximum spend on certain items, depending on the budgets allocated for the said items. Depending on the business needs, sending spending requests on a daily, weekly, or monthly basis can get quite tedious, especially with the long process of awaiting approval.
Secondly, many departments rely on data for future planning. The two departments are no different. While procurement will look at data on quantities purchased over a certain period, the accounting department will look at the same data in the sense of expenses incurred for the same purchases. Both will also look at price fluctuations of different items from the various suppliers to inform the purchasing decision. Other than quantities and costs, both departments will also track how often they need to purchase certain amounts of products so that to always be prepared for anything.
Last, but not least, both departments work together to find the best suppliers in terms of pricing, service, and terms - especially financial terms ie credit, etc. Once these are onboarded, both departments maintain these relationships through frequent communication and alignment on the payment of invoices, issuance of credit notes, and many other functions.
It is clear that procurement and accounting departments work together on a daily basis. Therefore, it is important for these professionals to adopt various software created to simplify work. These innovations exist to their advantage as they avoid the additional complexity of manual work that slows down their business.
Platforms like TopUp Mama allow procurement and accounting professionals to sign up, view product prices, agree on what to purchase and place orders in as little time as under thirty minutes! Save yourself the long tedious cycle of talking to multiple suppliers for days before deciding who to buy with. Other pros of using platforms like TopUp Mama include access to financial reports and easily accessible purchase reports, invoices, and delivery notes. The platform’s modern user experience improves the adoption of procurement and accounts processes and can reduce the long cycles by more than 30%.
Over 3000+ restaurants use Topup Mama to purchase supplies, access credit and grow.