How A High Growth Biotech Startup Purchases its Lab Needs and Clears Vendor Invoices In No Time
WHAT IS METACRINE?
In 2015, Metacrine, a biotech company in San Diego, raised $36 Million in a Series A round. Metacrine, considered as one of the most promising companies in the San Diego biotech cluster, is working on drugs for diabetes, liver disorders and other metabolic diseases. More recently, it raised $22 Million in yet another round of financing.
WHAT WAS THE PROBLEM?
Upon raising its $36 Million Series A round, Metacrine used the capital injection to scale up its operations. Inevitably, the quantity of its purchases,particularly lab supplies, equipment, chemicals etc., shot up dramatically.
Going from a handful of purchases in a week to several hundreds may not seem particularly challenging at first. However, as the numbers of orders increased, Metacrine’s Research and the Accounts Payable teams had to deal with a new set of problems.
“As a young Biotech company, the volume of requests and purchases was manageable; but as we’ve grown substantially, the need to make purchases has increased and the volume of transactions has become a problem.”
— Kathie Huynh, the consultant and controller at Metacrine
For researchers, getting their needs shipped to the lab on time was a matter of great urgency — in most biotech companies, researchers are busy working on scientific breakthroughs that are extremely time-sensitive. Metacrine’s researchers had to communicate their requests for chemicals, reagents and other needs to their managers for approval. The problem was that this form of communication was done via email and Excel sheets; this communication process or lack there of increased risks of losing the ball on orders.
Besides, under this process, there was no way for researchers to ascertain the status of their requests — for example, there was no easy way to find out if their request had been seen by their manager, let alone approved.
When it came to Metacrine’s Accounts Payable team, the problems were even more acute. As the volume of orders increased substantially, the company’s AP coordinator found herself spending the majority of her work hours manually reconciling invoices and getting the CFO’s signed approval for every invoice, before greenlighting it for payment.
Having scaled up both in team size and volume of ordering, Metacrine, which was on the cusp of yet another round of funding, realized that it could no longer continue its purchasing in a manual way. The time had come for it to automate its Request to Pay process.
HOW PROCURIFY SOLVED THE PROBLEM
“For us Procurify was a system that was able to reflect our organization structure and help with efficiency. Efficiency was key.”
— Kathie Huynh, the consultant and controller at Metacrine
Expediting & Streamlining Approvals:
Earlier, Metacrine’s researchers would input their requisition on an Excel sheet. Approvals would be sought with their respective managers via email. Once, the approvals came in, the requisitions would be conveyed to the Purchasing Manager. This was a long and winding process.
With Procurify, all this information could be coursed through one system and at a fraction of the time. A researcher could simply place a requisition on Procurify, and the appropriate manager would either approve or deny it. In the absence of emails and spreadsheets, no longer did the researcher’s emailed requisition compete with other emails for the manager’s immediate attention. Instead, a simple push notification — either on Procurify’s mobile or Slack — would alert the manager that a researcher needed something; this, along with crucial details such as what was needed, by when it was needed etc., was conveyed in the easiest way possible.
The streamlined workflow didn’t just help in the quick approval and procurement of orders, it gave a sense of reassurance and certainty to the researchers and managers; to ascertain the status of any order, they could simply use Procurify to call on its status and find out at what stage it was stuck. If the process was taking longer than usual, and things needed to be hastened along, the researcher could send an instant message to the relevant approver on Procurify’s chat log. Furthermore, all such correspondence and any other actions taken by any party in the Request to Pay cycle would be stored in Procurify’s audit log and be a matter of record.
Read The Essential Guide To Managing Biotech Labs — a primer on how Finance Can Work With Operations To Create More Accurate Reports Without Slowing Down The Procurement Process
SAVING COUNTLESS HOURS AND ENDING FRUSTRATIONS FOR ACCOUNTS PAYABLE:
Earlier, Metacrine’s Accounts Payable coordinator was spending the majority of her time on manual processes related to reconciling and approving invoices. With most of her work day swallowed up by such non-value added activities, she had little time left for crucial areas like financial reporting, or strategic and professional-development goals.
What took up a large chunk of her time was the three-way-matching process, which had to be done manually. Everytime an invoice was received by Metacrine, she had to personally scour the office to make sure the order had actually been received. Using Procurify and its best practices, an order’s status is updated soon as it has been received. After Metacrine switched to Procurify, the AP coordinator could match an invoice to its packing slip and its purchase order in just a few clicks.
The other area where Metacrine’s AP process suffered was invoice approvals. In their earlier, manual process, the AP coordinator had to get each and every invoice personally signed by the company’s CFO. Under Procurify, she could, at the click of a button, escalate the invoice — along with all other details — to the CFO for her approval
Procurify is the leading Smart Spending solution for mid-sized businesses. Its flexibility and highly intuitive user experience makes it the go-to solution for startups, companies and organizations that want to spend their money in a more planned and controlled way.
Around the world, hundreds of companies — particularly those in Biotechnology, Pharma and Healthcare — use Procurify. Some of our clients in these industries include: Finch Therapeutics, BlackThorn, Icagen, The California Medical Innovations Institute, Premier Biotech and many more.