Relying on manual processes for the purchase requisition can be tricky and cumbersome. Using dated tools such as emails, excel sheets, or forms could lead to human errors that may have a direct impact on the procurement process as well as the bottom line. So, if you are thinking of transforming your procurement process, automating the purchase requisitions can be a critical step.
In this article, we will uncover why you need to automate your purchase requisitions.
What Is Purchase Requisition?
A purchase requisition is a document used internally to raise purchase requests for the goods or services required from third-party vendors. It contains details such as the department which has the requirement, pricing, quantity, expected delivery date, etc.
What Are the Steps in a Purchase Requisition Process?
A purchase requisition process is a series of steps that start when a request is raised by an internal department requesting products or services from vendors or suppliers. This may begin with the creation of the request until the purchasing team completes the request.
Now, this process may involve a number of steps but having an automated system in place makes it easier for businesses to navigate.
Here are some of the common steps involved in a purchase requisition process.
#1 Requisition creation
The internal team which requires the goods or services will create a requisition or purchase request by filling out a requisition form accurately.
#2 Team approval
The request will be reviewed and approved by the stakeholders and the head of the department before being forwarded to the purchasing team.
#3 Review by purchasing team
The purchasing team will then review the request and the requirements. Based on the review, they may approve or reject the request, or send it back for changes or additional information.
#4 Purchase order creation
Following the approval of the purchase requisition, a purchase order is created by the purchasing department including details such as quantity, pricing, features, etc.
#5 Supplier contract
The finalized purchase order is shared with the selected suppliers. Following the supplier selection and negotiation, a binding contract is agreed upon between both parties.
After the supplier timely delivers the goods, a quality check is carried out to ensure all the requirements have been fulfilled accurately. This is usually followed by a three-way matching in which the invoice from the supplier, purchase order, and purchase request are matched to confirm the deliverables.
#7 Closing and documentation
The invoice is cleared and the necessary documents are compiled for future reference.
Why Is Purchase Requisition Important in the Procurement Process
Purchase requisitions help businesses plan and optimize their requests and acquisition cost. It plays a critical role in the following:
- Initiating the process of acquiring services or goods from third-party vendors
- Tracking the purchase orders
- Ensuring transparency and quick approvals
- Helping assess the need independently
- Avoiding fraud and supporting audits
- Serving as a piece of communication among stakeholders
Why Automate Purchase Requisition
Automating purchase requisition can make tasks transparent and easier for your team, reducing unnecessary spending, effort, and time when compared to traditional paperwork.
Adopting smart procurement management software can help your business with the following.
- Eliminate paperwork, thus, human errors
- Ensure direct and indirect cost-savings
- Enable quick and transparent approvals
- Ensure shorter purchase cycles
- Warrant improved employee productivity as well as vendor performance
- Offer better visibility on operations and business spends
How Can a Procurement Management Solution Support Your Business
A procurement management solution handles multiples functionalities to automate and streamline your procurement process including
- Creation and processing of purchase requisitions: E-procurement management software makes it easier for your team to create purchase requisitions, navigate through necessary approvals, and maintain transparency. It also allows you to create the corresponding purchase order following approvals from the stakeholders.
- Management of purchase orders: With procurement management software, you can centrally store your purchase orders for easy access. This will ensure visibility. Streamlined workflows, and quick approvals.
- Management of vendors or suppliers: With this software, you can compile all your supplier information in one place. This means you can readily use this information for selecting the right suppliers, negotiating better terms, tracking and managing their performance, as well as ensuring quality deliverables.
- Management of contracts: A central repository of contracts ensures streamlined workflows for contract approvals and easy access, as well as offers visibility in audit trails.
- Management of invoices: With the help of procurement management software, you can not only manage the invoices but also match them with purchase orders to ensure conformity. This means you avoid unnecessary delays in processing the payments and maintaining improved relations with your suppliers.
Adopting an e-procurement management solution can seamlessly automate your purchase requisition in the procurement process. This will not only help you save time, effort and costs but also improve your team’s productivity.
So, wait no more and speak to our experts about how Induzbuy can help you transform your procurement process in just a few easy steps!