How Online Requisition Makes Your Buying and Procurement Easier
In the hustle and bustle of our modern world, having a firm procurement to payment process in place is critical to the success of any organization that deals with buying or selling products or services. Requisitioning, in particular, can be a challenging, mildly daunting task. Within the procurement process, requisition usually happens toward the beginning and sets the precedent for everything that comes after. That’s just one of many reasons why using online requisitioning can really put some speed into that process. In this article, we put together a short guide explaining how online requisition makes your buying and procurement easier throughout the organization. Check it out below.
Better Understanding Of The Procurement Cycle
Anyone working in the industry understands the need for a smooth procure-to-pay cycle. But understanding the procurement cycle itself is important. The complexities of the procurement cycle can be easily broken down into a few distinct sections. The procurement cycle starts with identifying a basic need for the company. Then it’s a matter of finding the right supplier or vendor, submitting a purchase requisition, creating a purchase order for approval, and waiting on the vendor to accept it. When the vendor accepts the order, they’ll provide the service and invoice it once completed. After that, your company pays out the invoice. This cycle is applicable to a wide range of needs within the organization.
GL, or General Ledger, codes are a pragmatic tool for tracking expenses. General ledgers are merely an overview of the company’s financial transactions. They’re also known as accounting codes, and they just make sure expenses or purchases are routed to the proper departments for accountability. These codes are useful to procurement in accounting because they determine how specific expenses are to be accounted for when tracking them—and they become invaluable when it’s time to evaluate spending risk, understand where money is going, and for general auditing purposes. This process can be performed manually, but using a procurement software solution that automatically assigns POs and requisitions forms to their proper GL codes is more efficient for vendors, customers, and procurement departments.
Requisition forms work together work purchase orders to procure goods and services. Requisition forms are the order for goods or services. They should contain the vendor’s information, prices, quantity/description, and information about the requestor. It’s a method of standardization that typically works well for most businesses. Requisition forms are not POs. Where the purchase order kicks off the buying process by getting the purchase approved, it doesn’t actually set the procedure in motion. That’s the requisition form’s role. A purchase order is issued after a requisition form is approved. The PO should contain the following information at the very least:
- Company name
- Date Issued
- Price per unit
- Billing details
- Delivery date and details
- Address (both delivery and invoice)
- Payment terms
- PO Number
- Relevant signatures
- Date of issuance
POs are issued after a requisition form is approved. For companies that don’t use requisition forms, the PO serves as a means to acquire approval for the purchase.
If there’s one thing the modern world has going for it, it’s technology. We do everything from online banking to getting car insurance quotes with our mobile devices. The tech we use, including our smartphones, enables us to have a convenient, high-quality life with very little inconvenience at all. Technology ostensibly streamlines many processes from personal to business. Can do the same for making buying and procurement easier. By implementing a system of mobile approvals, you’re empowering your team to take some initiative to make approvals and to make the process a little bit easier. Getting your spend under management (the percentage of spending actively controlled by your company) to a good place is much simpler using a comprehensive online requisition system. Requisition systems streamline the workflow, flag potential risk/fraud, and enable mobile integration. This makes them an elegant solution to a complex problem plaguing organizations around the world today.
Organizations have policies in place for a reason. Compliance with those policies is critical to saving money and ensuring things are repurchased through the proper channels. Guided Buying is a great way to ensure policy compliance. In a guided buying system, there’s a way to put inventories from most, if not all, of your suppliers into a single hub where you can use their punch-out catalogs (which can integrate with any guided buying solution) to make purchases. If you’re using a software solution for your requisitioning, you can actually set parameters and rules for purchasing that will automatically kick in if an employee tries to make an unauthorized purchase. This ultimately cuts back on rogue spending, mitigates third-party risk, ensures employees are making purchases in line with established contracts, and improves relationships with suppliers—all while saving your company money long-term.
This article has been published in accordance with Socialnomics’ disclosure policy.