Left Out of the Conversation: Computerized Buying

August 24, 2000
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It’s no secret that, during the past decade, computerization has single-handedly managed to change forever the way contractors do business. So far, it’s literally revolutionized estimating, design, accounting, and record keeping, and with the new wave of online project management on the rise, computerization is taking contracting in new directions.

With all the talk of an electronic revolution in business, one important area of computerization that seems to have been left out of conversations is purchasing and materials management. But it shouldn’t be; computerized purchasing and materials management will save contractors time, money, and materials. And it’s just a matter of time before it becomes standard procedure.

Automating the purchasing process helps save time in a variety of simple, yet powerful, ways. The automated process is a paperless process. That means no time is wasted on handwriting data, filing data, or sifting through files to find that data in the future.

Managing Information

All information entered into a computerized procurement system is stored on the computer and can easily be looked up when needed. All historical purchasing data are available instantly. It can even be accessed by more than one individual at a time, eliminating misplaced paper files and the line at the filing cabinet.

To save even more time, automating the purchasing process can completely standardize purchase orders and requisitions. No more carbon copy forms that don’t work the way your business does.

Computerizing purchase orders can save your company time and money, and create a reporting database as well. (Photo courtesy of Dexter & Chaney, Seattle, WA.)
With computerization, you can create custom purchase orders and requisitions that include the information your business needs. This can be especially helpful if you purchase the same materials over and over again. Just use a copy of the original purchase order, and change the purchase order record-keeping number, quantity, and total for a faster process.

There is also a database of materials with UPC codes to allow you to look up information and apply it to purchase orders.

Creating purchase orders is an easy process. And you can also get price quotes on the Internet almost instantly. You can send your Bill of Materials from your estimating system to your supplier via e-mail and receive back material prices, availability, back order information all online. This information can then be imported into your purchasing system, enabling you to place your orders.

Once purchasing data is entered into a procurement system, it’s available in a variety of timesaving forms. For instance, it can be e-mailed quickly to anyone inside or outside the office. A project manager in the field as well as a purchasing agent in the office can send and receive purchase orders via e-mail instantly.

If the purchasing system has remote access capabilities, those in the field can even work within the system without ever returning to the office. Purchasing information can also be exported from procurement systems into accounting systems, saving hours of data entry and reducing the chances of human error.

Customized Reports

Reports can also be customized to fit the way you do business. With project managers potentially producing 10, even 20 reports a day — each containing different data organized for different purposes — imagine how much faster and more efficient the reporting process would be with reports pre-tailored for each party’s needs. Owners’, site managers’, and general contractors’ reports are all very valid possibilities with automated purchasing.

In addition to saving time, automated procurement has the potential to save contractors significant amounts of money. Now accounting can match requisitions and priced purchase orders to invoices to verify you are being billed accurately.

Computerization also puts your entire purchasing history at your fingertips. Just click a button, and you can view every purchase with every vendor you’ve ever made, and you can view it in an organized, understandable format, rather than as a pile of papers it took days to compile. After a quick review of your history, you can negotiate with vendors for better price discounts on the materials you need to purchase.

Combined with a regular price-updating service for the system’s database, the purchasing history almost guarantees you the best and most accurate pricing available.

With its extensive reporting capabilities, automated purchasing also allows project managers to analyze their purchasing data to help cut costs. Reports detailing project costs and profitability can easily be created and used to save money and materials on future projects.

Computerized purchasing holds great potential for the contracting industry and should not be left out of the conversation. The amount of time and money that a business can save by automating its purchasing and materials management process is significant. Perhaps, once the industry realizes this potential, it will be the next hot topic of conversation.

Fleming is with Estimation, Inc., Linthicum Heights, MD. For more information visit www.estimation.com.

Publication date: 8/28/2000

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