How to Streamline Your Organization's Purchase Requisition Process?

Streamlining maintenance is very important for organizations if that is not done then the purchase requisition process increases unnecessarily. It is a long process from identifying the need to creating a purchase order & then delivering by the vendor's end! So, a lot of time is consumed in this whole process. It might take several days to fulfill requirements & in that time employee productivity suffers.

Why does that happen? Because sometimes there is purchase requisition form is not filled correctly then if that purchase requisition form is filled correctly then the manager is out of station sometimes so delay occurs regularly.

Remember this is just one employee's requirement there are several other employees are also waiting at the same time. So, on huge scale productivity suffers and daily operation speed slows due to the lack of required items.

What Is a Purchase Requisition?

A purchase requisition is a form & an official document in which an employee uses to purchase goods on the behalf of the company. However, in order to approve purchase requisition, it goes through various stages.

First, all information needs to be filled in correctly after that manager thinks it is required then it's approved by the manager & passes to the financial department. Moreover, they also check if the required item is available in the stock. If stock is available then the item is allotted.

Also Read: Why is Requisition Management Important for an Organization?

Otherwise, the financial department checks the expenses of requirement, quantity, and budget as well. If the budget is not then quantity is decreased and as per the budget, approval is done.

Then finally it goes to the top management for the final approval.

In the purchase requisition form, all the essential information is stored such as the name of the requestor, department, item requirement, quantity, price, vendor detail, and most importantly why the item is required.

At any stage, if the purchase requisition is rejected then comments are written and an explanation ad justification is given that why the purchase requisition is rejected.

What Is a Purchase Order?

Once purchase requisition is approved then it is converted into a purchase order. Then the purchase order is forwarded to the selected vendor. After that vendor accepts the order once it is approved then this document is legally binding.

The vendor can communicate how payment will be done. However, in most cases payment is done after the product is delivered and quality & quantity is checked of the product if everything is ok GRN (Goods received note) is generated.

Order is checked everything is as per the order nothing extra & quality is also checked. After that invoice is generated by the vendor's end and the financial team checks it & pays to the vendor.

How You Can Streamline Your Purchase Requisition and Purchase Order Process?

You can streamline your purchasing requisition and purchase order process with the help of purchasing order system. This system centralizes the process and provides updates whenever any progress occurs.

It simplifies the process of purchasing and saves a lot of time. Moreover, it leads to easy workflow and eliminates unnecessary workflow operations.

The cycle makes it more straightforward to arrange and distinguish approaching items and administrations and works on stock administration too.

Eventually, a unified buy framework speeds up the buying system and diminishes delays by individual divisions, which can in any case meddle with effectiveness.

When you invest in automated software you get lots of benefits and a systematic approach is taken in order to eliminate delayed work processes. Furthermore, with this software, you can streamline your purchase requisition process as well.

Also Read: What Is the Role of a Purchase Requisition in Asset Management?

According to Business Wire,  “The global procurement software market held a market value of USD 5,635.6 Million in 2020 and is forecasted to reach USD 9,654.8 Million by the year 2026. The market is anticipated to register a CAGR of 9.4% over the projected period.”

What Are the Benefits of the Purchase Order & Purchase Requisition Process?

Benefits of purchase order & purchase requisition process are discussed below:

1. Keeps Everyone Informed

Keeps everyone informed and on the same page as well. Whenever a comment is added to the purchase requisition the requestor is notified and all the people who are in the loop are also notified.

2. Alert & Notification

Whenever any purchase requisition process is initiated then the manager can check quickly and approve or reject and justify the reason.

Alert & notification feature comes handy when you have multiple tasks in a case when the manager has some tasks pending then again system alerts. It helps in improving efficiency.

3. Avoid Fraudulent Activities

Lots of employees use a manual purchase order to bring equipment for their utilization or select vendor who have their benefits. This purchase requisition process eliminates chances of fraudulent activities and with this system, you can check vendor performance as well such as keeping quality track, delivery on time or not. Through these techniques, you can minimize fraud chances.

4. Avoid Duplicate Orders

A big size organization has lots of employees and in purchasing department there are several employees also.

Therefore, there are chances of creating duplicate orders and making multiple purchases. It leads to increased unnecessary expenses and inefficiency also increases. But when you have automated software there is no chance of creating duplicate orders.

Conclusion

The purchase requisition process is necessary to keep purchasing systematically otherwise you will lose a lot of money without noticing and fraud activities can also occur. That is why investing in a purchase order system or purchase requisition software is important for business.

Also Read: What Are the Primary Advantages of Maintenance Tool Tracking Software?

Frequently Asked Questions  

1. What is the difference between purchase order & purchase requisition?‍

A purchase requisition is an initial document whereas a purchase order is a final document which is a legally binding document. In purchase requisition documents you send a request for purchasing whereas in purchasing order is documented in which an actual number of items are given for purchasing.

Purchasing requisition is a document that stays inside the premises of the organization whereas a purchasing order document is sent outside the premises of the organization.

2. What are the various types of purchase requisition?‍

Various types of purchase requisition are as follow:
1. Standard purchase order
2. Subcontracting
3. Stock transfer

3. What is a purchase requisition?‍

A purchase requisition is a form submitted by an employee to their company's finance department to request permission to purchase external goods or services. When a purchase requisition has been approved, the actual purchasing of goods or services can now happen with the use of a purchase order.