Purchase Requisition Management

While most purchase order software allows you to create a purchase order, growing companies need a process before the purchase order.

Even though all purchase requests end up with a purchase order, you still need the request approved for cost control and budget management.

With a purchase request, an employee can request the purchase with an estimated amount and have it approved by the manager.

Now let’s see how ProcureDesk helps you with purchase requisition management.

Creating Purchase Request

The key to an effective purchasing process is to make the requisition process easy for employees.

You don’t want to take a paper form and make an electronic version. You want to simplify the purchasing experience for your employees.

With ProcureDesk, employees can create a purchase request with fewer clicks without entering much information.

The system recognizes the user and then uses that information to set up default values for departments, classes, charts of accounts, projects, class codes, etc.

Here is an example of how user defaults work:

Vendor Catalogs

The finance team wants a detailed description of everything the employees are purchasing.

But for employees, it is a pain to type in the long product descriptions.

Instead, provide them with vendor catalogs that streamline the procurement process. With catalogs, employees can choose what they need to buy with a click.

Let’s say you purchase office supplies from Amazon.com.

With the click of a button, an employee can open up Amazon.com, pick what she needs and then send the data back to the requisition. This experience is called vendor punch-out catalogs.

Here is a sample of the punch-out catalog:

And this is how the data gets moved to the shopping cart.

In some cases, all you need is a simple list of items that you can purchase from a vendor.

You can build a simple item list with some basic information enabling employees with similar purchasing experience as the vendor punch-outs.

Here is how you can curate your catalog in purchasing software:

Budgets

ProcureDesk has inbuilt budget tracking & controls so that you can stay under budget.

It is easy to set up the budget or import from a spreadsheet or a system like QuickBooks Online.

After setting up the budget, employees can choose the appropriate budget for the purchase.

The system checks for the available budget and helps you keep the cost under control.

You can decide how you want the system to proceed if an adequate budget is unavailable.

For example – show a warning message when the budget is unavailable or block a purchase when a budget is not available.

Purchase Approvals

The system automatically assigns purchase approvals. Your employees don’t need to know who needs to approve the purchase.

You can configure the purchase approvals based on the amount, department, location, budget owners, and much more. You can easily configure your custom approval workflows.

The system checks the requisition against the purchase approval workflow and then identifies the required approvers for the purchase.

Here is an example of how the system identifies the purchase approvals:

In this case, the requester is John, and Mark is the approver who will review the approval request.

All the employee needs to do is submit the request for approval.

Once the request is submitted, the system notifies the approver of a pending request.

The approver can approve from the email without logging into the system or using the ProcureDesk mobile app for approvals.

The requester can track the status of the purchase requisitions from the purchase request dashboard.

For example – you can see what requests are pending approval or if the buyer has already issued the order for a purchase request.

Purchase Order Management

Once the requisition is approved, you can send the purchase order to the vendor. Purchase order management software automates this process.

If you have a purchasing team, they might want to review different requisitions to assess cost-saving opportunities.

You can quickly get quotes from different vendors with the supplier quote module.

Here is an example of comparing the cost of servers from 2 different vendors.

Once you have completed the quote process, you can convert the quote to a purchase order and issue the purchase order to the vendor.

Here are a couple of ways ProcureDesk helps you manage the purchase order management lifecycle.

Automated Purchase Order Creation

You don’t have to worry about converting purchase requisitions to purchase orders with automated purchase order creation.

This saves time, especially when you don’t have a purchasing or buying team.

You can identify what suppliers accept purchase orders, and the system can take care of the rest.

Here is an example of a purchase order that ProcureDesk automatically generates.

You can customize the purchase order template to include additional fields.

Merging Purchase Request Into A Purchase Order

Many vendors have a minimum order threshold for free delivery.

Sometimes, the vendors have tiered pricing where you can get discounts if you purchase more quantity on the same purchase order.

That is why it is helpful to review the open purchase requisitions and decide if you can merge them into a single purchase order.

You can save delivery and shipping costs by merging the different purchase requisitions into a single order.

The other thing to consider is negotiating free shipping with the vendor.

The vendor might offer you free shipping if you have a higher purchase volume.

Tracking Vendor Acknowledgment

Due to the current supply chain challenges, it is more important than ever to keep track of vendor acknowledgments.

If a vendor doesn’t acknowledge the order, you don’t know when and if they will ship the product.

There are multiple ways to get order acknowledgment information.

For example, you can add instructions on the purchase order for sending the order acknowledgment.

For example, you could set up an email, purchasing@yourcomany.com, where the vendor can send the invoice.

The other alternative for the vendors is to use the ProcureDesk vendor portal to provide order acknowledgment.

Here is an example:

Tracking Order Shipping Information

With ProcureDesk, you can track the delivery of your order without going to an individual carrier site.

The vendor can send the ASN (Advance Shipping notice) electronically, or you can enter the shipping information on their behalf.

Here is an example of how you can track the advanced shipping information:

Once you have the tracking information, the system can send you an email notification as and when the status of the package changes.

Receipts To Confirm Delivery Of The Purchase Order

Once you receive the product, you receive a supplier invoice. The Accounts payable team can do invoice matching and pay the vendor.

However, the Accounts Payable (AP) team cannot know if you received the product. If you don’t have a receipt for a purchase order, the AP team needs to get invoice approvals before payment.

That is why it is important to create receipts to inform everyone that you have received the product.

Here is an example of a receipt:

You can create partial receipts enter the serial number and asset tracking information.

You can also track the expiration of items, for example, for different chemicals or other similar products

The above features give you a complete order management system.

Inventory Management

With inventory management, you can easily track the inventory of stocked items.

To start tracking the inventory, you first have to identify the items and set up key inventory control.

For each inventory item, you can manage the following information:

1. Inventory location
2. Min and max levels
3. Re-order point

Once you have the basic configuration, the system tracks the inventory for you.

You can upload the inventory of your existing items or let the system update the inventory as and when you receive a new item.

Here is how you can track the inventory by location:

Once you start tracking information, you can set up automatic rules to re-order items once the item count falls below the set threshold.

Inventory Consumption

There are three ways to use ProcureDesk for tracking inventory consumption.

You can create a release every time you want to use the product. Creating a release reduces the on-hand inventory and tracks who is using the inventory.

Here is a screenshot of the release.

You can track when it was released, to whom, and for what purpose. You can also track other useful information, like how the employee picked up the inventory item.

The second option is to create a requisition.

This process is very helpful when your employees need a single place to request items from the vendors or the inventory.

When the user searches for the product, she can see the available inventory and then order directly from the inventory.

The system creates an inventory order and sends it to a buyer to release the inventory.

When the inventory is released, the on-hand is updated.

The third option is to do a physical inventory count and then update the data in the system.

You are doing a physical inventory count at the end of every month. In that case, you can upload the inventory report and update the inventory count.

Inventory Valuation Report

An inventory valuation report gives you a snapshot of the total inventory value at any time.

Suppose you are using ProcureDesk to issue the inventory. In that case, you always have an accurate record of your on-hand inventory.

Here is an example of the inventory valuation report:

The price of the item can be an average price. You can also use other inventory valuation methods like LIFO (Last In, First Out) and FIFO (First in, First Out).

Supplier Management

Is managing suppliers a problem for you?

Supplier management features can help.

Supplier management lets you keep track of your supplier information in one place.

Managing Vendor Information

With ProcureDesk, all your supplier information is in one single place.

You can track key vendor information like Vendor tax details, D.B.A name, delivery locations, and key contacts.

Suppliers can use supplier portals to respond to requests for quotes, track open purchase orders, and submit invoices against the purchase order.

The supplier portal enables self-service for vendors, reducing the number of inquiries the AP team receives.

For example – a supplier can track the status of the open invoice and track the payment status.

Cost Control Dashboard

Want to get better cash flow visibility – The cost control dashboard provides you with exactly that.

With the Spend management dashboard, you can see all your spending in one dashboard.

For example:

You can see what you are purchasing, from whom and who is purchasing within your company.

You can track monthly spending trends to keep a pulse of purchasing behavior within your company.

Or you can track the payment terms across the vendors and identify opportunities for negotiating better payment terms.

Extending the payment terms is probably one of the most important levers in increasing the cash flow.

Of course, you need good credit history with the vendor for that to happen. That is why it is important to move to an invoicing process so that you can build up the credit history with the vendor.

As you scale your operations, you will have opportunities to pay the vendor sooner than the agreed terms and avail of any early payment discounts.

You can review the open order report to track your open commitments.

An open report gives you a quick snapshot of how many purchase orders are open, what is already invoiced and what is pending to be invoiced.

You can use this information to plan your spending better.

Email Invoice Automation

The first step in accounts payable automation is centralizing the invoice capture process. If you don’t have a central email box to receive invoices, the vendors will send you invoices manually and through the mail.

Your team then scans those invoices and input the data into your accounting package.

Here is how to avoid that:

1. Setup an email box like ap@yourcompany.com
2. Instruct the vendors only to send invoices to this email. You can do this by printing instructions on the purchase order or providing the vendor onboarding form.
3. Connect Procuredesk to that email so that ProcureDesk can automatically capture the attachment from the email and create the invoice for you. You can read about invoices from email here.

All you have to do is to enter the email in ProcureDesk. Here is how to do that:

OCR (Optical Character Recognition)

No need to extract the invoice data from the document; ProcureDesk automatically takes care of that for you.

The system scans the document and extracts the invoice data using AI technology during uploading.

Unlike other systems, ProcureDesk extracts the granular line level and header level data so that you don’t have to do any data entry.

The OCR engine extracts and matches the data with the available purchase orders.

If a purchase order is not available, it is considered a non-PO invoice.

Here is an example of how the OCR engine extracts invoice data.

Automated 3-Way Matching

After the OCR engine extracts the data, the system matches the invoice with relevant documents.

Suppose the system finds a matching purchase order. In that case, it automatically matches the invoice lines with the purchase order lines and performs the 3-way match.

The system would check the invoice against the purchase order and receipt for the material purchase.

For service items, the system checks the invoice against the purchase order. It then routes the invoice for review by the stakeholder.

You don’t need to follow up with employees for approval manually. The system automatically sends reminders to respective team members.

Invoice Approval Workflow

With the ProcureDesk invoice approval workflow engine, you don’t have to worry about routing invoices for review and approval.

Using the customized invoice approval workflow engine, you can create your custom workflow and automate the approval process.

Whether you need to route rent payments for approval or need someone to approve shipping costs, the system takes care of that for you.

You can set up workflows based on the following:

Types of invoices, for example, pre-paid invoices, rents, standard invoices for material and service purchases.

1. An approval workflow based on the invoice amount and your authorization matrix.
2. An approval workflow based on the different cost codes, GL codes, etc.
3. An approval workflow based on the departments.

These are some examples of how you can set up your workflow.

Here is an example of how easily you can set up the approval workflow for invoices:

Invoice Exception Management

You can decide how and when to route invoice exceptions for approval with smart invoice exception management.

Don’t want the system to route every invoice exception for approval?

No problem - just set up the tolerance levels, and the system would automatically take care of that for you.

You can also configure if the system should consider shipping and taxes in the invoice exception process.

Here is an example of how you can set up the invoice matching tolerance for your invoicing process:

Electronic Invoices

Want to make your invoicing process more efficient?

Then implement electronic invoices with your large trading partners.

With electronic invoices, the trading partner or supplier sends the invoice electronically using electronic invoices standards like cXML.

The supplier automatically posts the invoice electronically with an electronic invoice, and there is no email involved.

The invoice is submitted faster, and that significantly reduces late payment fees.

When the invoice is processed faster, you can take advantage of an early payment discount.

You can choose automated matching and processing so that the process is entirely hands-free.

With electronic invoices, you can reduce the chances of duplicate invoices and duplicate payments.

All the AP team has to do is to pay the vendor.

We have implemented electronic invoices with prominent vendors like Amazon, CDA, Staples, Home Depot, to name a few.

Here is an example of an electronic invoice:

Supplier Portal

Not all vendors can support electronic invoices because they might be small or don’t have the technology infrastructure to support electronic invoices.

That is why we have a supplier portal. Your suppliers directly create the invoices in the system, and you don’t have to do any data entry.

With the supplier portal:

1. Suppliers can submit the invoice against a specific purchase order and upload the invoice document.
2. Suppliers can check the invoice payment status and remittance details. Your team doesn’t have to spend time answering vendor questions regarding the payment status.
3. You can get accurate invoice data without entering any invoice data in the system.

Here is an example of how easily suppliers can create invoices in ProcureDesk’s supplier portal using invoice management software.

Automated Reminders For Missing Receipts

One of the main challenges with 3-way matching is continuously following up.

For example, an invoice didn’t match because of a missing receipt.

The employee didn't create the receipt, and the AP team can't pay the invoice.

So you have to follow up with team members to ensure that they can create a receipt.

Depending on how many people you need to reach out to, this could be a painful process.

With ProcureDesk, we send automatic reminders to your team so that you don’t have to do that.

Here is an example of an automatic reminder:

You can also send these auto reminders on demand by using the reminder feature that automatically scans the pending invoices that need receipts and informs the stakeholders.

This is a great feature to use during the month-end process.

Accounts Payable Dashboard

Cash flow visibility is essential for businesses of all sizes, so that is why we have an inbuilt dashboard so that the AP team can manage the invoices effectively.

The accounts payable Dashboard provides complete spend visibility and insight into company purchases.

For example, we have a dashboard designed for AP clerks to see all pending processing invoices.

Here is an example of the AP work queue:

Sometimes you forget to process invoices, or you want to know what is due when.

That is when the aging Dashboard is beneficial.

The aging Dashboard gives you a quick snapshot of what is due based on the supplier payment terms.

That way, you can plan your cash flow needs for the week, month, and so on. That leads to better cash management and faster payments to the vendors.

Here is a snapshot of the aging Dashboard:

Reporting

With inbuilt reporting, you can see all the pending invoices in the queue, that are approved and where the payment is complete.

For example, it is month-end, and you want to know what expenses you should be accruing.

We have a report that shows you all purchase orders received, but no invoice is yet in the system.

You can follow up with the vendors to get the invoice or accrue the expenses.

Here is an example of the received not invoiced(RNI) report:

Now let’s say you want to see all the invoices that are pending approval. There is a report for that.

Here is a sample invoice pending approval report:

Integration With Accounting Packages

An Invoice payable software that doesn’t integrate with your accounting package is not of much use.

With the automated sync, you don’t have to worry about entering the data into your accounting system.

Once the invoice is approved and matched, the system automatically sends the invoice to the accounting package for payment.

The system syncs the payment status back so that your employees can see that the invoice is paid.

We can also directly sync the invoices with payment systems like Bill.com. You can read more about Bill.com integration here.

Purchase Requisition Management

At the time of this writing, we couldn’t find any mention of purchase requisition on the Spendwise website.

So we are assuming that Spendwise doesn’t have a purchase requisition feature. The tool supports purchase order setup, but there is no requisition process.

Purchase Order Management

The purchase order management feature allows purchasing teams or employees to create a purchase order quickly.

You can type in the items that you are planning to purchase.

The solution is straightforward and would work for a small purchase order volume.

There is a mention of Amazon integration, so you might be able to set up a punchout with Amazon and enable a better purchasing experience for your team.

With the approval limits, you can set up a purchase approval process. The purchase order request can be routed for approvals before the PO gets issued to the supplier.

Buyers can customize the purchase order workflow to meet specific approval needs.

You can also create a receipt to receive a purchase order. That enables the AP team to check if the invoice is ready to be paid.

Inventory Management

Spendwise allows you to capture the stocking information and help track the inventory.

Once you define the item as inventory, you can start keeping track of that.

You can also create inventory adjustments to adjust the quantity, price, and inventory valuation.

There is support for multi-location inventory tracking, so it is easy to track inventory across all locations.

Supplier Management

Spendwise offers a basic supplier management feature where you can track the basic supplier information like name, address, tax id, etc.

You can also import suppliers into the system using a CSV so that you don’t have to create suppliers one at a time.

There is no advanced capability for advanced scorecard tracking or vendor ratings.

Cost Control Dashboard

There is no central cost control dashboard. However, Spendwise offers around 25 canned reports. It allows you to get a complete view of your spending and helps you make better purchasing decisions

Purchase Requisition Management

Precoro purchasing requisition module allows employees to create purchase requests quickly.

Employees can create purchase requests by entering the information manually, or you can select an item from an internal catalog.

When writing this article, there is no capability for punchout catalogs. That means you have to spend more time creating and managing catalogs.

The purchase request is sent for approval, and once it is approved, you can issue a purchase order for the vendor.

Purchase Order Management

With the purchase order module, you can create purchase orders from a purchase requisition or create a purchase order without a purchase requisition.

There is support for budgets so that employees can assign the budgets to a purchase order request.

You can also set up recurring purchase orders.

Inventory Management

Precoro supports basic inventory management features. You can set up new items for which you want to track the inventory.

Once the inventory item is set up, you can track inventory across multiple warehouse locations.

The users can then request an item from the inventory or purchase from the vendor.

The system also provides granular access control on who can order and request the release of inventory items.

Supplier Management

Precoro offers supplier management capabilities that include:

1. Creating and managing supplier information.
2. Inviting vendors for self-onboarding.

You can create suppliers one at a time or simply import the suppliers in bulk.

With the self-service, it is easy to onboard new suppliers.

The system also allows you to gather supporting documents like insurance certificates.

Cost Control Dashboard

The tools lack detailing reporting and a cash control dashboard.

However, there are three reports that a user can customize.

There is a purchase request report, order report, and a Bills report.

You can then filter and customize the report to find what you are looking for quickly.