Zip has announced the results of the 2023 Trends in B2B Purchasing survey of 1,056 US-based finance and accounting professionals – director-level and above. Respondents are overwhelmingly eager to move the procurement process away from legacy approval workflows and communication methods and towards automation to improve B2B purchasing efficiency and unlock new levels of spend visibility and control.
The majority (79.4%) of respondents said their company faces challenges when purchasing B2B software and services and nearly one-third (32.1%) of respondents describe their B2B purchasing process as broken. This appears to lead to significant corporate risk and weak spend controls, with half of the respondents agreeing that stakeholders (e.g., executives, finance, legal, IT, security, etc.) lack sufficient visibility into their company’s purchasing and approval process. It follows that a majority of respondents (70.9%) also believe most of their processes for initiating purchase requests and approvals for B2B software and services should be automated. The research uncovered a plethora of B2B purchasing challenges and evaluated the opportunity for organisations to improve procurement and accounts payable.
Challenges in B2B purchasing lead to a lack of control over vendors and costs
Despite the high volume of purchase requests and approvals, many respondents in the 2023 Trends in B2B Purchasing research say their business is still using outmoded tools and communication methods in their procurement processes. A majority of respondents rely on legacy forms of communication to manage initial purchase requests for new software and services—including phone calls and texting (60.2%), Microsoft Excel (56.8%) and email (53.2%). The same is true for managing approvals of purchase requests, with email (49.2%), Microsoft Excel (47.7%) and Microsoft Teams (30.1%) listed as the top three tools for communication.
Perhaps as a result of increasingly lean procurement teams and the use of these outdated tools and processes for purchasing, respondents concur that there is a lack of communication and clear processes across both employees and stakeholders. While a majority of respondents (71.3%) indicated they have a uniform process for employees to initiate a purchase request or renewal, more than one-third (34%) of those respondents reported their employees are largely unaware of the process.
These process challenges appear to ultimately lead to a lack of control over vendors and costs, with subpar levels of PO-backed spend and evidence of employees going around the process.
- Only 10.9% of respondents said 81%-100% of the spend in their organisation is under management or PO-backed.
- Just 15.8% of respondents said employees at their company don’t follow the correct process to initiate a purchase request.
New challenges have also risen in the accounts payable process. One in four respondents stated that their company does not have accounts payable automation software in place. When it comes to payment methods, employees will most frequently use their managers’ corporate credit cards to complete payments for third-party software and services vendors. This can create an unnecessary burden on the cardholder and create confusion down the line if the payment is not recorded accurately.Click below to share this article