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Procurement PunchOut Catalogs: All the Basics

Holly Condon October 1, 2021

Procurement PunchOut Catalogs: All the Basics
By 2023, business-to-business (B2B) eCommerce is expected to account for 17 percent of all B2B sales in the U.S. As a result, eProcurement strategies are rapidly evolving, with procurement PunchOut catalogs becoming a must-have rather than a nice-to-have for corporate buyers across most U.S. industries.

But the trend isn’t being driven by surface-level preferences or whims. The increased adoption of B2B eCommerce and PunchOut is rooted deeply in several underlying factors, including:

  • Three-quarters of today’s B2B buyers being millennials with high expectations for their digital buying experiences to resemble consumer eCommerce giants like Amazon and Google.
  • Mobile, self-service purchasing becoming a necessity for corporate buyers and end-users during the COVID-19 pandemic, when remote work became the norm.
  • The old ways of “analog” procurement resulting in ordering errors, slow processing, overworked procurement teams, and wasteful spending.

Given that, it’s critical to understand what PunchOut catalogs are, how they work, and what to look for in a PunchOut solution. Read on for the answers.

What is a PunchOut Catalog?

A PunchOut catalog is an eProcurement tool that enables a corporate buyer to purchase items directly from a supplier’s website. That PunchOut catalog, aka PunchOut website, is customized to reflect special pricing and discounts negotiated between the buyer and seller. Best of all, buyers can use a single-platform process for purchasing, as the supplier’s Punchout catalogs are connected directly to the buyer’s own purchasing application.

How Does a PunchOut Website Work?

Using a PunchOut website is relatively simple, and it delivers efficiencies at every point in the buying process. A buyer selects a vendor in their own system and is taken to the vendor’s custom website, where they find their negotiated, up-to-date pricing and products with that vendor.

The buyer then places items in the shopping cart and “checks out”, auto-populating purchase requisitions and sending them through the buyer’s eProcurement system for approval, rather than straight to the supplier. Once approved, the solution automatically creates purchase orders and sends them to the vendor.

What Are the Benefits of a PunchOut Website?

More and more buyers are requiring their suppliers to offer PunchOut websites as they realize tremendous savings in time, labor, and cost. And suppliers are happy to heed the call because, well, competition. The PunchOut site benefits buyers in many ways, including:

Speed and Efficiency

PunchOut websites improve speed and efficiency for all supply chain players, most notably the buyer. End-users can go directly to a suppliers’ website to make fast, informed buying decisions. Suppliers can make real-time updates to catalogs, so buyers never have to wonder if they’re looking at the correct price. And an intuitive, mobile-friendly eCommerce platform ensures a superior customer experience, making end-users more eager to adopt PunchOut automation.

PunchOut websites also free Accounts Payables (AP) staff of tedious, low-value tasks like data entry to focus on more important strategic ones. There’s no need for time-consuming purchase order (PO) processing, as the system automatically generates POs and routes them through appropriate channels. Procurement departments don’t have to maintain and update supplier catalogs either, as those tasks are the supplier’s responsibility.

Spend Management

Finance departments love integrated procurement PunchOut because it’s centralized within one application, providing visibility and increased control over purchasing. Controllers can ensure that departments are buying approved products at pre-negotiated rates from approved vendors while also consolidating purchases and controlling inventory.

Through automation and workflows, PunchOut can reduce processing costs by up to 85 percent. Plus, there are no printing or operational costs related to the publication and maintenance of the catalogs—as again, that’s the supplier’s responsibility.

Fraud Protection

With procurement PunchOut catalogs, you get to decide how and where your end-users can shop. You can pre-select major vendors (like Amazon, Office Depot, or Staples), choose products for your catalog, and even set pricing with your suppliers ahead of time.

With these measures in place, your accounts payable team can more easily pinpoint fraudulent payments requests when they come along. If the vendor doesn’t have a PunchOut catalog in your system or the invoice doesn’t match the negotiated prices on your supplier’s PunchOut website, you can rest assured that the invoice isn’t authentic.

Brand Familiarity and Relationship Building

Fifty percent of B2B eCommerce buyers cite “personalization” as a key factor when researching online suppliers. In response, 55 percent of B2B suppliers are using their marketing dollars to create a more personalized buying experience. The supplier’s goal is customer retention, but through that process, buyers win too.

When end-users are familiar with a brand’s interface (UI), they can easily find the items they’re looking for, which results in fewer ordering mistakes. Most importantly, these buyer-seller relationships strengthen the buyer’s negotiation position for pricing, terms, and service, and buyers enjoy a more pleasant and transparent customer experience.

What to Look for in a PunchOut eCommerce Platform

Not all Punchout Systems are created equal. You need a PunchOut solution that also integrates seamlessly with your ERP and includes, at a minimum:

  • Dynamic Rule Engine & Approval Workflow: It allows you to implement any corporate approval rule you can imagine, so you can create a steel-proof, efficient approval process.
  • Mobile Communication and Accessibility: It comes with mobile applications, so employees can shop, make requests, and access data from anywhere, anytime.
  • Analytics and Reporting: The e-procurement solution enables you to view all your KPIs and metrics in a single dashboard, so you and your team can manage and optimize any business area.
  • Modern Interface: A great user experience starts with an attractive, intuitive interface. Onboard new users quickly and increase user adoption rates among your employees.

While eCommerce tools like procurement PunchOut are just one part of your overall procurement strategy, they can significantly impact cost savings and efficiency for improved productivity, competitive advantage, and profitability. CFOs can control spend through centralization and visibility. AP teams can focus on their best and highest use, as they no longer spend time on data entry and PO processing. And end-users can enjoy a quality buying experience that ensures they receive the correct items in the right quantity on time.

Ready to improve your procurement workflows and optimize your resources? Make PunchOut catalogs part of your procurement strategy.

Contact our team to see how our PunchOut catalogs can improve your procure-to-pay process.

Holly Condon

With over 25 years' experience in the SaaS space, Holly brings a wealth of industry knowledge to the table. She previously held leadership roles at PairSoft's subsidiary PaperSave and resides in South Carolina with her family.

View all posts by Holly Condon
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