Purchase requisition and purchase order are important for an organization. especially when organization size is big because management cannot handle purchase requests of employees manually if an organization attempts to manage manually then it leads to lots of issues and chaos.
In this blog, we will know what the main features and practices of purchase requisition are. So, without wasting any time let us begin. But first, let us know what exactly purchase requisition software does!
What Is Purchase Requisition Software?
A purchase requisition is a process in which an employee of an organization sends requests to the management for purchasing equipment or gadget on behalf of the organization.
A purchase requisition form is a document that lets the organization know what the requirements of the employee are. All the essential information is mentioned in this document such as product name product quantity product quality vendor details.
Then this purchase requisition form is submitted to the manager and the manager approves or rejects it and mentions the reason if the purchase requisition is rejected. If approved, then it is passed to the finance department then they check the budget if they have the budget then they approved it.
As per the budget quantity and quality is selected then this purchase requisition is converted into a purchase order and sent to the vendor.
Purchase requisition software automates the process. The software saves time and minimizes the process. Most importantly, quick actions are taken on the purchase request.
Whenever any update occurs it lets know all the employees kept in the loop. According to Statista, “The procurement software application market will bring in an estimated 5.94 billion U.S. dollars in total revenue in 2021. The market is projected to experience a slow but steady expansion in the coming years, with a constant annual growth rate of 2.3 percent.”
Recommend To Read: What Is the Role of a Purchase Requisition in Asset Management?
What Are the Main Features of Purchase Requisition Software?
The main features of purchase requisition software are discussed below:
1. Alerts & Notifications
Alerts and notifications are very crucial for organizations. It keeps everyone informed and keeps everyone on the same page.
It is considered as one of the most critical features for all departments and management as well. Whenever any update occurs in a purchase order or a new purchase request is raised then the organization's management gets notified.
2. Track Every Order
When you keep track of every purchase order or purchase requisition request you can easily avoid any kind of fraud or miss utilization of purchase requisition.
It provides you with crucial details such as how much time the vendor is taking to deliver products. It helps you with better planning as you can estimate how much time you will receive your product.
3. Spend Analytics
With this software, you can get all the data related to expenses. Spending analytics provides you with a complete picture related to purchasing requests and purchase orders. It is helpful in controlling purchasing.
4. Purchase Order Tracking
One of the most essential features of the purchase requisitions system is purchase order tracking. To collect data, purchase order tracking provides crucial information related to every purchase request and purchase order. You can know anytime what the status of a specific purchase order is?
What Are the Best Practices of Purchased Requisition Software?
Below we have discussed the main practices of purchase requisition software:
1. Eliminate Pen and Paper Method
The pen and paper method are a traditional approach used for data management. However, it is not an effective solution because paper starts to dissolve within a few years and after that, they are no good for the organization because of data loss.
Furthermore, papers are prone to loss, and they can be torn easily. In pen and paper, human error chances are more. But when you are equipped with purchase requisition software process is automated, human error chances are minimized, and accuracy is never compromised.
2. Keep Track of Vendor Details
It is important that you know your vendor performance, for instance in how much time the vendor is completing a purchase order what is the quality of the product that the vendor is providing prices are high or low
Is he reliable or not these types of questions come into your mind, and you can easily get answers to these questions from purchase requisition software.
3. Multilevel Purchase Requisition Approval
We know that some purchase requests are important for employees, however, several purchase requests are not. That is why it is important to create multi-level approval of purchase requests so that unimportant purchase requests are avoided, and unnecessary wastage of time is minimized.
Creating multiple-level approval can lead to a productive work decision.
4. Control Expenses
It is very important to control expenses and it is considered one of the most required practices. When you are equipped with purchase requisition software do you get a complete view of your expenses related to purchase requisition and purchase orders!
Most importantly this software provides complete visibility that helps you control unnecessary expenses. With the purchase requisition form, you get the details of why equipment is required that helps organizations in making a productive decision. With this software, you can set a budget limit for each department.
Lots of big-size organizations do not invest in purchase requisition software thinking that it is a waste of money. On the contrary, it is helpful to businesses by providing a systematic way to purchase.
It also assists in avoiding fraudulent activities and saves organizations unnecessary expenses. If your organization is struggling with purchase management then purchase requisition software can be fruitful for your business.
Frequently Asked Questions (FAQs)
1. What Are the Various Status Types of a Purchase Order?
Various status types of a purchase order are discussed below:
Partially Received – Partially received purchase order means some of the quantity of the purchase order has been received and some of the quantity yet needs to be received.
Open - Open purchase order means purchase order is created but the product is not received.
Closed - Closed purchase order means purchase order quantity has been received and payment has also been made.
2. What Is the Difference Between Purchase Requisition and Purchase Order?
The difference between purchase requisition and the purchase order is that purchase requisition stays inside the organization and purchase order is sent outside of the organization. Purchase requisition form can be changed altered whereas in purchase order no changes can be made. Purchase order behaves like an official document on behalf of the organization.
3. What Are the Benefits of a Purchase Order System?
Benefits of the purchase order system are given below:
1. Systemize the whole purchasing system
2. Avoid fraudulent activities
3. Save time by minimizing process
4. Improve work quality of employees
5. You don't have to pay the full amount in advance