How Blockchain can make your business’s procurement process efficient?
This article is adapted from the original article here
Procurement fraud is a malpractice where someone dishonestly gaining an advantage by avoiding a debt or stealing or redirecting funds during the procurement process of goods or services. When two or more individuals work with a mutual understanding to systematically defraud an industry, losses will be multiplied. Inefficiencies in procurement processes will be a hindrance to the growth of the organisation.
Blockchain for better procurement process
Blockchain technology with its inherent qualities like reducing the cost of transactions, avoiding middleman, controlling fraud, and transparency make the best choice as an efficient procurement system for any organization .let’s explore the benefits of blockchain technology in the procurement system;
The integrity of data passed between different parties on a procurement supply chain can be tampered or manipulated on its way. Blockchain present a channel in which all of the participants in the system has to agree upon any of the transactions in the system. Every transaction in the system about ‘who spent how much on what commodity/service etc are basically stored in the blockchain. These transactions are stored in the decentralized immutable network so in here every participant has visibility on what is happening throughout the transactions. Even with this very unique feature of the blockchain, frauds can happen. But the only difference is that they cannot be hidden from the system.
Better invoice management
For better invoice management with proper security, the blockchain has all the security ensuring feature in them. As all the parties are registered in the digital ledger,transactions are stored and a tamper-proof audit trail is maintained and no individual can change the invoice. This technology is already being used to fight against blood diamonds and money laundering.
Funds can be reached from senders or receiver within a matter of minutes since blockchain has no borders or geographical limitations for transactions. This help in the procurement department to clear funds for purchasing goods commodities or services. The blockchain completely cuts off all the mediators and make the processing of payments and transactions faster and secure.
A fraud-free procurement system can help an organization to block the exploits and fraudsters who drain the money out from them. With blockchain technology, we can now imagine a near perfect fraud-free environment that can help organizations to grow faster.
Read more on the Blockchain based procurement systems here