July 7, 2025

9 major procurement challenges and how to overcome them

The old approach of scattered procurement processes and spreadsheet tracking doesn't work for growing businesses. You need complete spending visibility, reliable controls, and fast responses to changing business needs—all while actually reducing costs.

As businesses navigate economic uncertainty, supply chain volatility, and rising regulatory pressures, procurement teams are under immense pressure to control costs, ensure supply chain stability, and meet sustainability goals.

This deep dive into nine major procurement challenges offers practical solutions for each, showing how automation, AI, and integrated platforms reduce cycle times and provide insights.

Challenge 1: Approval and PO processes that push people to work around them

Slow, manual purchase order (PO) approval cycles stall purchases and tempt people to improvise. These quick fixes become maverick spending that drains your negotiating power and throws off your forecasts.

For example, when a $60 HDMI cable follows the same lengthy approval path as a $60,000 renewal, approvals pile up in inboxes. Your team slowly drifts into workarounds because they start believing that breaking rules can sometimes get things done faster than following them.

However, each workaround weakens compliance, creates audit risk, and often means paying premium prices for rush shipping or last-minute purchases.

The fix is simple—right-size your controls and create a smart approval design:

  • Set approval tiers by risk and value: Low-risk, low-value requests need just one sign-off, while saving multi-step reviews for big-ticket or high-risk purchases
  • Centralize all requisitions through one system: Catches duplicates, connects directly to your ERP, and builds audit trails automatically
  • Standardize PO templates across all departments: With a PO template, every request includes consistent data—supplier ID, cost center, budget code—without exceptions
  • Create emergency procurement protocols: You can act fast while automatically recording decisions and maintaining compliance
  • Build policy checks into your payment system: Catch out-of-policy purchases before cards get swiped, not after. With smarter guardrails, you keep spending visible and maintain audit trails without slowing your business down.

Challenge 2: Vendor relationships that cost you money

Managing vendor details in spreadsheets and approving invoices by email weakens your bargaining power with every delay. Manual invoice matching means you miss early-pay discounts and drop from "preferred" to "late" status. Contracts sitting in forgotten shared drives also create surprise renewals with unfavorable terms.

Without tracking service quality, poor performers stay on your roster while your best suppliers feel ignored. The result? You lose volume pricing, pay late penalties, and have zero pull when you need rush shipments.

A centralized approach changes everything:

  • Centralize contract management: Store all agreements, SLAs, and renewal dates in a single, searchable platform that automates approval routing
  • Automate AP processing: No-touch invoice capture and scheduled payments reclaim early-pay discounts while protecting your cash flow
  • Track vendor performance like you track spend: Simple scorecards highlight late deliveries and price increases, giving you solid data for demanding better terms or shifting your business elsewhere

When you pay on time, monitor service quality, and negotiate with complete information. Vendors compete for your business, not the other way around.

Challenge 3: Procurement data that arrives too late to matter

How can you control spending when you only see the numbers weeks after the money's gone? Budget overruns show up at month-end, when it's already too late to fix them. This timing gap costs you money.

Without current data, you miss early payment discounts, pay duplicate invoices, and enter negotiations without knowing your total vendor spend. Your finance team becomes reactive, explaining variances instead of preventing them.

Real-time budget tracking flips the script:

  • Implement real-time budget dashboards: Show you every transaction as it happens, flag unusual patterns, and alert you instantly when projects exceed budget
  • Create live spend-vs-plan views: Stop unauthorized purchases before they settle and redirect savings to more valuable initiatives

Behind the scenes, automated data tools standardize supplier names, categories, and currencies, eliminating the guesswork in spreadsheet calculations. The outcome? A single source of truth you can trust, with the flexibility to act immediately rather than after the damage is done.

Challenge 4: Multi-location procurement coordination multiplies costs

Multi-location businesses face unique procurement coordination challenges. Without centralized oversight, each office becomes its own procurement island. Local managers build relationships with nearby suppliers, negotiate separate contracts, and order independently. You lose negotiating power and pay premium pricing across every location.

Local procurement decisions also create compliance risks. Different locations follow different approval processes. Audit trails are also scattered across multiple systems and local spreadsheets.

Centralized coordination turns location diversity into procurement power:

  • Establish master vendor agreements: Negotiate enterprise-wide contracts that all locations can access, securing volume pricing while allowing local flexibility for urgent needs
  • Create shared procurement calendars: Coordinate contract renewals across locations to strengthen negotiating positions and prevent surprise expirations
  • Implement location-aware approval workflows: Maintain local speed with centralized oversight, allowing smaller purchases locally while routing major decisions through headquarters
  • Share vendor performance data across locations: Track which suppliers deliver consistently across all offices, building strategic partnerships that benefit your entire organization
  • Coordinate inventory sharing between locations: Reduce emergency purchases by allowing offices to share excess inventory before ordering new items

Challenge 5: Software procurement sprawl that drains budget

When your departments buy and deploy SaaS tools independently, you lose more than visibility—you lose negotiating power. Scattered software purchases strand licenses across cost centers, put renewals on autopilot, and hide unused subscriptions that eat into your budget.

Likewise, unauthorized software purchases gradually eat up your indirect spend, eroding negotiated savings and creating audit problems. You end up trying to explain budget overruns while dollars slip through the cracks.

Here’s how you can stop the software sprawl by centralizing software management:

  • Route all software requests through one approval process: Enforce policy without creating bottlenecks
  • Implement real-time subscription tracking: See usage data, renewal dates, and contract terms in a single dashboard
  • Conduct quarterly software audits: Reveal underused seats and overlapping tools, giving you data to combine vendors and negotiate better rates

Challenge 6: Spend categorization that stifles reporting

When every team labels spend differently, your month-end close drags and budget reports lose credibility. For instance, your marketing team's "campaign swag" shows up under three different GL codes at month-end. Your IT team's SaaS renewals scatter between "software," "consulting," and "miscellaneous."

Bad data entry starts the problem. Duplicate supplier names, inconsistent descriptions, and manual errors multiply as transactions move from spreadsheets to your ERP. Without standard categories, poor data quality forces multiple reconciliations while hiding true cost drivers.

The solution lies in reliable categorization that gives you true spend visibility:

  • Standardize your chart of accounts: Create company-wide categories with clear definitions and protect them with role-based permissions
  • Automate expense classification: AI tools clean up descriptions, standardize supplier names, and map line items correctly when they enter your system
  • Maintain data quality regularly: Keep categories accurate as vendors merge or product lines change

Accurate categories also strengthen your vendor negotiations because every dollar lands in the right bucket instead of disappearing into miscellaneous expenses.

Challenge 7: Compliance documentation that fails under audit pressure

Audit prep becomes tough when your approval records are scattered across emails, shared drives, and messaging apps. You waste time reconstructing approval histories that should have been captured automatically, hunting for missing signatures and policy confirmations that might not exist.

These gaps have serious consequences—human error drives compliance violations, creating audit findings you could have prevented.

Every hour spent tracking down receipts delays your month-end close and prevents strategic analysis. Auditors see inconsistent documentation as operational risk, increasing the chance of costly findings and regulatory scrutiny.

Here’s how automated compliance platforms solve this at the source:

  • Implement continuous compliance monitoring: Create a central repository where your policies, approvals, and control tests get captured automatically. Evidence collection happens with each transaction, building a solid audit trail without manual work.
  • Set up real-time policy enforcement: Flag policy exceptions immediately, while access controls protect sensitive compliance data

The benefits compound: Your audit cycles finish faster, findings decrease significantly, and your documentation stands up to regulatory scrutiny year-round, not just during annual audits.

Challenge 8: Integration gaps that force manual data entry

Copying the same purchase order into different systems to pay a vendor wastes your time. Yet many finance teams still work this way. Every manual handoff—exporting data from your procurement tool, re-entering it in the ERP, reconciling totals in spreadsheets—adds risk.

Typos creep in. Items disappear. By month-end, you're hunting discrepancies instead of closing books, and your cash-flow projections remain guesses rather than accurate insights. These gaps also block initiatives that matter—early-payment discounts, flexible budgeting, and proactive spend controls.

You can reduce this friction by using modern platforms that connect your requisitions, PO, invoices, and payments with your accounting system in real time:

  • Connect approvals directly to your ERP: When you approve a request, the PO automatically appears in your ERP—no duplicate entry needed
  • Automate three-way matching: Invoices match against POs, three-way matching happens automatically, and both systems share the same transaction ID. This creates clean data that feeds dashboards instantly, giving you confidence to adjust mid-month instead of conducting post-mortems.

Challenge 9: Procurement training gaps that create expensive mistakes

Imagine your department manager needs a last-minute part to keep production running. With no clear instructions, she skips the approval process, uses the corporate card, and hopes the price is fair. Multiply this across dozens of teams, and you'll see how untrained buyers undermine both savings and compliance.

Skill gaps cause the problem. Missing skills push your employees to rely on "what's always worked," even when those methods are inefficient. When people default to old processes, you absorb hidden costs—from duplicate orders to missed discounts—while audit risk grows.

Outdated approaches continue because your staff lack the know-how to use better tools. The stakes are high: inconsistent policy knowledge exposes you to overspending and potential regulatory penalties.

Regular, structured training programs fix this:

  • Establish standard procurement training: Give every budget owner the same foundation—how to submit requests, which suppliers to use, and what spending levels trigger extra review.
  • Create accessible policy resources: Support written policies with simple checklists and short videos that your team can easily reference. Building a culture of continuous learning turns policy compliance into a habit, not a burden.
  • Build mentorship programs: Your experienced buyers can guide newer managers through actual purchases, reinforcing best practices while building relationships across departments.
  • Use technology to guide decisions: AI-powered intake forms, automatic policy checks, and real-time dashboards guide even new requestors, catching errors before they reach finance.

Transform your procurement operations with Ramp

Strict controls, delayed data, and fragmented vendor management waste your time and money.

Ramp connects these elements to close your operational gaps without increasing overhead. Real-time spend controls prevent budget overruns before they happen. Custom limits automatically block transactions that violate your policy.

With Ramp, integrated purchase requests go straight to the right approver. You can clear requisitions without the back-and-forth affecting most operations. Unified vendor records bring renewals, performance data, and payment terms into one system. This gives you the power to secure early-pay discounts and volume pricing.

Explore how Ramp procurement simplifies the entire procure-to-pay process by automating repetitive tasks and centralizing procurement, bill pay, and vendor management in one streamlined platform.

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Chris SumidaGroup Manager of Product Marketing, Ramp
Chris Sumida is the Group Manager of Product Marketing at Ramp, located in Ladera Ranch, California. With almost a decade in product marketing, Chris has a knack for leading successful teams and strategies. At Ramp, he’s been a driving force behind the launch of Ramp Procurement, which makes procurement easier and more efficient for businesses. Before joining Ramp, Chris worked at Xero and LeaseLabs®️, creating and implementing marketing plans. He kicked off his career at Chef’s Roll, Inc. Chris also mentors up-and-coming talent through the Aztec Mentor Program. He graduated from San Diego State University with a BA in Political Science.
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