A paper-based system is associated with human error. These errors may cause inaccuracy in preparing future budgets. For an NGO that sells a large volume of goods to raise funds, a paper-based system may cause chaos. Another problem is fraud, it’s easy to forge a paper-based invoice.
Every time they need to make a purchase, the NGO employee must process a purchase order. These needs are unpredictable: today is stationery, tomorrow is office equipment. This makes keeping track of spend a huge challenge. It doesn’t allow transparency and NGO managers won’t be able to approve every purchasing transaction.
Another challenge met by NGOs, stuck with a paper-based system, is a lack of accuracy. Inaccurate purchase orders make reporting on accurate financial figures impossible. Donors expect NGOs to use funds responsibly. They tend to donate more when they see that their funds are bearing fruit and donations enhance the company’s image. How can you (as NGO) make sure that you always spend within budget? An automated purchase order system may aid in ending wasted spend.
A well-planned budget should help you achieve financial goals. In order to prepare annual budgets, you will need accurate figures. Income and expenditure are both used to deliver accurate budget estimates. Accounting practice dictates that we use the previous year’s budget to prepare for the current year. Preparing budgets is a cumbersome exercise for an NGO still stuck with a paper-based system.
How ditching a paper-based system will address this?
How to avoid suspicion by providing transparency
Increasing transparency for NGOs across all spectrums is important. If you lack transparency, you look suspicious to both society and donors. During tough economic times, donors assess charities more carefully. Any NGO that cannot prove all spend as promised to the donor, may find it hard to secure future funding.
One of the benefits of using an automated purchase order system is: it allows for transparency.
To illustrate this, let’s use Procurementexpress.com as an example. A purchase order software trusted by many CFOs, it makes setting up budgets easy. Management can view all transactions done by staff in real time and reporting is available on demand.
Ending wasted spend
In an attempt to end wasted spend, NGOs set strict budgeting lines for all branches. If you waste time trying to justify why you wasted funds, you are working backwards.
Any NGO spending donated funds responsibly deserves more funds. To society at large, this means more relief, more food parcels, and much more help. No need to fuss over where the next funds will come from.
How can an automated system assist in ending wasted spend? Back to our example; Procurementexpress.com. Companies are surprisingly bad at spending their own money and make a spending mistake 1 in 10 times. Procurementexpress.com removes this mistake by implementing customized approval rules and one-click approvals. This could be your NGO!
Monitoring of all transactions
With an automated purchase order system, it’s easy to monitor purchasing transactions. The manager does not have to be present to approve a PO for stationery. When a PO is duplicated, the mistake can be rectified immediately.
With easy to use software like Procurementexpress.com, it’s possible for any staff member to submit a purchase request, which is always visible to managers. What is your NGO waiting for?
See what Procurementexpress.com users say
“Having a team with users at different levels, this program is perfect! Easy to understand and use. Access and use it from anywhere makes it very efficient. I like the recent changes to include more fields for the supplier! This eliminates having to maintain a contact list on the drive for everyone. They are great and are always there to answer questions and help.”
Tricia Napolitano
Director of Accounting & Administration
Thomas Mountain Ranch LLC
Is your charity still stuck with a paper-based system? Ditch it and sign up for a free trial here.
