A purchase requisition is a form of a request made by the employees of the organization to the procurement department to purchase materials or merchandise on behalf of the organization. This request is then passed on the superior managers seeking their approval. On approval, it then goes to the procurement team for further processes.
Why Purchase Requisition Is Needed?
The purchase requisitions file maintains all requests raised by various departments & cost centers till date which can help organizations to strategically source goods & services & to understand where to cut costs. It documents every request raised by the employees and allows the finance team to generate reports on information as and when required.
The importance of Purchase Requisition can be enumerated are as follows:
- Simplifies budgeting across departments
- Helps businesses plan sourcing of goods & services and negotiate better deals
- Enforces the governance policy for business spend across the organisation
Enabling Spending Culture Across Your Organizations
Organizations need to bring in a healthy culture of spending and empower their employees to do more. However, before allowing employees to spend, there has to be a proper purchasing guideline so that the organization doesn’t go overboard and lose control of its business spending.
A Company purchasing policy establishes clear-cut guidelines on the amount & type of purchases that can be done by the teams giving complete visibility for the finance & procurement department on expenses made by the organization through this policy. The efficient purchasing policy can help organizations reduce cost and enhance team productivity. The cost of purchasing might unnecessarily increase in case there is no proper attention given to it.
Why purchasing policies are important?
- A company purchasing policy addresses the objectives and provides guidance and support to the purchasing department.
- It defines the responsibilities of various buying levels and also has budgetary restrictions.
- Maintains a healthy relationship among the various stakeholders involved in the purchase leading to a positive spend culture.
Streamline Your Purchase Requisition Process
Finly, a centralized procurement system can streamline and automate the purchase requisition process. The robust system will guide from an employee raising a request for a purchase to the type of product being purchased, getting approvals, adding vendor details into the system, managing multiple POs, sales orders, invoices, etc. It also helps in sending an automated notification to all stakeholders involved in the transaction regarding payment, product delivery and hence improving visibility, control and auditability of any purchase being made.
- Multi-Level Approval: The platform is highly flexible & configurable allowing you to customize multiple levels of approval-flow based on the organizational hierarchy. Multiple levels of approval stages can be configured involving various stakeholders to approve the request raised by an employee and be notified via email. The system can also be configured to automate the notification reminder to approve or disapprove any pending requests.
- Establish Governance & Compliance – Setup advanced approval hierarchies and multi-stage approval workflow to process any purchase requisitions or purchase orders. Implement robust protocols and accounts payable procedures to categorize and automatically approve certain types of requests made by specified people to streamline the approval process.
- Budget Restriction – Control your business spending by enforcing a strict budgetary policy on each of the purchase requests raised. In case of a policy violation, notify the employee via email. You can also set up a budget limit on each of the users and track the number of requests being raised. Upon reaching the limit, the system can automatically block the user from raising any more requests.
- Audit Trails – Get the complete transaction details right from the purchase request being raised till purchase orders are processed. The events are recorded that occurred in the execution of any purchase order or payment transaction and get instant access to complete budget and spend details.
- Enhanced Communication – Increase your team efficiency by allowing them to communicate and collaborate more effectively. With LIVE chat system, procurement teams can interact with user raising the request for any quick clarification required and address any purchase related issues.
The benefits that the procurement and finance teams see after moving to FinlyFinance are the streamlined processes of purchase requisition, total control on budget spend, increased productivity, effective collaboration, and most importantly, building a positive spend culture in the organization.