The lab supply eprocurement industry has boomed in recent years, at the beginning of 2020 the industry was estimated to be worth $30.6 billion and it is only expected to continue expanding. For lab managers and biotech finance teams, this means there are more tools available than ever before to aid in the lab supply purchasing process.
As is, the process of managing lab supply inventory and purchasing is a full time job. There's manually matching receipts to supply purchases, navigating disruption in the supply chain, organizing communication with multiple vendors, and keeping an eye on the items you have on backorder. At the end of the day, unautomated supply procurement methods leave the door open for human error.
And chances are, as a biotech lab operations team, you have had something on backorder in the past several years. From 2019 to 2021, lead time for life sciences products increased by 200%.
Coinciding with the expansion of the industry has been an uptick in all around biotech lab automation. Demand for lab automation is expected to continue growing at a rate of 5% through the next decade. For those already familiar with the tedious nature of manual supply inventory management, this embrace of procurement automation is welcome.
Read on for the top reasons why transitioning to a cloud-based biotech lab supply procurement software will benefit your finance team.
Benefits of Cloud-Based Procurement Software for Lab Finance Teams
Lab finance teams are familiar with manually managing and navigating biotech lab budgets, with some help from spreadsheets or paper filing systems. As labs undergo a digital transformation with help from new optimized workflows and automated processes, it’s time for the biotech accountants to take their turn at integrating automation into their workflows.
Let's take a closer look at the benefits that lab finance teams have seen since pivoting to cloud-based procurement software.
1. Integrates with Finance + Billing Apps
When you are on the lookout for the next eprocurement tool to use to further automate your lab’s financial processes, make sure you factor integrations into your search.
Look for options that integrate with your bookkeeping software and billing tools to take out the need for manual data transfer. When you can visualize data between tools, you can more easily identify blockers and find opportunities to cut spend. Granting researchers access to funding sources also eliminates steps in the approval process.
2. Automates Invoice Tracking
Automating manual processes in biotech finance is a catch-all term for the process of pivoting away from manual systems and toward automated workflows that are programmed, then left to run on their own using cloud-based software platforms. When you zoom in a little closer, you’ll find that the root of good biotech finance automation lies in the software’s ability to accurately track your invoices and capture data to provide reporting and insights.
Manual invoice management is a time consuming process, and the larger your lab is, the more time consuming it becomes. Automated invoice tracking software shows that invoice tracking no longer needs to break the backs of your finance teams. Instead, they are able to support your lab as it scales instead of being overwhelmed by the growth.
3. Life Sciences Marketplaces Consolidate Invoice Management
One of the chief complaints when it comes to manual lab finance management is the need to juggle accounts for multiple different suppliers. Cloud-based procurement software, such as the procurement features of online marketplaces, present a solution.
With the marketplace serving as the only vendor of record, invoice management is simplified. Gone are the days of pivoting between accounts, manually compiling quarterly inventory spend in a third-party sheet. Instead, the best cloud-based procurement platforms cut this process down to a matter of moments. Automated software instinctively consolidates invoices from various suppliers, to allow for a more organized and streamlined invoice management process.
4. Reduces Manual Data Entry + Transfer
It comes as no surprise that manual data entry is the root of all evil for finance teams. In addition to the innately time consuming nature of it, manual data entry and transfer are also known to be potentially costly— depending on how many inaccuracies there are.
The cost of manual data entry follows a 1-10-100 rule. Verification of data accuracy during entry costs $1, cleaning up data errors costs $10, and errors that go left uncorrected cost the company a minimum of $100. According to a Goldman Sachs report, all of those manual data entry related costs add up to a $2.7 trillion overall loss for global businesses.
For smaller and emerging labs, the cost of manual data can be a roadblock that prevents lab growth. To avoid the risk of paying for costly manual data mistakes, use an automated cloud-based procurement software tool or app.
5. Improves Data Accuracy
On the flip side of using automated data entry to save costs is utilizing cloud-based procurement software to improve data accuracy. As mentioned above, automating data entry is a surefire way to save on costs and reduce inaccuracies generated by manual data entry.
Essentially, the more accurate your data entry is, the less time you have to spend correcting mistakes. And in 2021 when we talk about improving accuracy, what we mean in integrating automation software. Automated data entry has nearly a 100% accuracy rating.
6. Provides Access to Lab Spend Reporting + Analysis
Invoice management is an ongoing process, as is the subsequent lab spend reporting that naturally follows. The best eprocurement software automatically generates regularly scheduled lab spend reports and provides dashboards for easy and accessible analysis.
Instead of manually coming to your own conclusions about your quarterly spending or cost trends, utilizing a LIMS that provides you with access to lab spend reporting eliminates the middleman and allows your finance teams to jump over tedious manual analysis. Cloud-based procurement software like LIMS provide finance teams with a more thorough understanding of their spending history.
7. E-procurement is a Scalable Solution for Growing Biotech's
The thing about emerging biotech labs is that they don’t stay small for very long. To establish sustainable workflows for your finance teams, provide them early on with the software and tools they need to seamlessly scale alongside your growing organization.
More Ways to Cut Lab Spend Using Biotech Software
Automating processes to cut costs and save time isn’t just reserved for the lab supply procurement process. There is a variety of ways that biotech labs can cut lab spend through the use of software, such as:
- Save money by increasing staff output through automated workflows.
- Optimize your internal lab space by using software to smooth over inefficiencies.
- Use task-targeted automation to pinpoint areas for improvement of your existing lab software.
- Choose comprehensive biotech software that can be accessed cross-lab by all necessary departments.
Digitizing Lab Operations with a LIMS
The most straightforward way to use biotech software to optimize your lab processes is with a central LIMS, or Lab Information Management System. The right LIMS can:
- Reimagine your current lab operations for the digital age.
- Eliminate unnecessary workflow steps.
- Scale alongside your lab, no matter how quickly you expand your operation.
- Increase overall lab productivity.
Cloud-based software is the future of biotech labs. To begin integrating invoice management and other tools into your workflows, here is everything you need to know about Automating Manual Processes in Biotech Finance.