Purchase requisition best practices give you a complete insight into how procurement processes cut down on expenses incurred by the company. It also ensures that the company gets the best value for the money spent.
Survey findings by Deloitte show that using a purchase requisition software reduces cost by as much as 74%, increases cash flow by 45%, and expand your company organically by 43%.
We have highlighted seven best practices you need to follow to manage and implement your company’s procurement processes effectively.
1. Implement a centralized storage repository
A cloud-based procurement system gives you total control of all departmental activities. It makes procurement efficient and easier and saves you the stress of manually trying to keep things in control by running around.
An e-procurement system provides all departments in your company a central repository for storing all procurement requisitions and other relevant procurement-related data. This gives you complete control of all procurement related documents with just a few mouse-clicks.
2. Ditch Paper-based procurement system for the e-procurement system
The paper-based procurement system is an excellent way of managing purchase requisition. However, it does not take away the stress of managing purchase requisitions and orders from department to department. Also, it is prone to damaging environmental effects.
Migrating to an electronic procurement system is the best decision you can make when it comes to purchasing Requisition best practices. An e-procurement system makes purchase order tracking, invoices, and inventory, and approval smooth and easy.
Studies conducted by KPMG show that companies using purchase requisition software improve the performance, growth, and innovations by as high as 64 percent.
Therefore, Migrating to the e-procurement system helps you manage all procurement processes effectively and lets you focus on other aspects of your company’s operations.
3. Implement self-services purchase order management for all departments
The e-procurement system with self-service for your employees empowers your employees outside of the purchasing department to make submissions of procurement requisitions easily to the purchasing department using the pre-approved vendor contract pricing.
This helps you to decentralize all purchasing processes and prevent delays, under and over-purchasing associated with purchasing.
Self-service procurement software also helps you to put in place workflows and spending threshold for easy delegation and approval of all purchasing below the spending threshold. This ensures that all departments get their requested purchases.
4. Enforce purchasing rules
Automating purchase and Requisition increases the percentage of purchase orders associated with purchase requisitions through automated workflow approval. This cuts down on rogue buying without the necessary requisition approvals and ensures that all purchases made on behalf of the departments are the budget limit, and purchases made from licensed vendors.
5. Make budgets at the departmental level
E-procurement system gives you a decentralized procurement system and also enables departmental heads and other employees to view estimated budget availability. The e-procurement software automatically all requisitions above the budget limit. Hence, the departmental head can choose to approve or review such requisitions.
This feature of the e-procurement system ensures that the company and departmental heads adhere strictly to purchase requisition best practices.
6. Keep track of all vendor contracts, purchase requisitions, and purchase orders
Contract management software makes it easy to keep track of all purchase requisitions and contract expiration dates. A contract software allows departmental heads and employees to enter all purchase information such as contract amount and expiry dates.
Employees can view the budget status of all approved contracts. The contract management software also enables you to keep track of purchase requisitions against contracts. Therefore, you will be able to determine the exact amount your company is expending on a particular contract.
7. Maintain an internal spending control
E-procurement system and contract management software helps you to gain visibility to budget planning, and all departmental purchasing approvals, maintain internal expenditure control within your company, and strict adherence to external auditing requirements.
The Procurement software also helps your vendors to fulfill all internal and external requirements by making available all documents relevant to the contract and contract dates.
A purchase requisition software should be able to perform the following functions as required by purchase requisition best practices:
- Optimizes your procurement processes and also streamline existing relationships between your company and vendors.
- Cuts down on rogue spending which in most cases can account for up to 80% of purchases made without by companies without a purchase requisition software.
- Streamline your company’s expenditure by using the spending analysis feature to identify all uncontrolled spending.
- Lowers overall purchase requisition costs significantly
Implement your purchase requisition best practices with ProcurePort
ProcurePort’s purchase requisition software offers you a solution to all issues associated with purchase requisitions and purchase orders. It also helps you to implement purchase requisition best practices amongst your employees and vendors.
Hence, ProcurePort purchasing requisition software solution helps you to stay ahead of your competitors, cut down on uncontrolled spending, and streamline all company operations.