Discover how a spend management solution can assist you to implement and track fundamental KPIs to future-proof your business.
The purchase requisition process is a key business function for every business; it ensures that purchases are authorized, necessary, and aligned with the organization's objectives.
It serves as a formal request for the procurement of goods or services, ensuring that managers have the necessary records and information to save costs, optimize their spending, maintain financial discipline, and make informed decisions while ensuring that business purchasing goes through a review and approval process.
However, without the help of automation, this process can be inefficient and difficult to maintain.
Manual processes can lead to costly errors, delays, and miscommunications, resulting in wasteful spending and reduced profitability. The absence of visibility, automated workflows, and centralized controls can lead to operational inefficiencies and longer purchasing cycle times that impact productivity and operations.
Requisition management software not only drives operational efficiency but helps businesses avoid potential pitfalls that can result in unnecessary expenses and financial setbacks.
In this article, we’ll explore how the right software can lead to substantial cost savings for your organization.
How requisition management software reduces costs
Choosing the right software for your company can introduce numerous benefits, the most significant include reducing costs, improving efficiency, and avoiding overspending.
1. It reduces errors
Requisition management software minimizes errors associated with manual processes. By replacing multiple paper or email threads with digital purchase requests that include supporting documents, accurate quantities, specifications, and an approved vendor, your company can avoid costly mistakes and rework that leads to wasted time and unnecessary expenses.
2. It streamlines processes
By simplifying processes using requisition management software, the entire procurement workflow is streamlined, from requisition creation to approval and purchasing. Delays and bottlenecks associated with manual processes are replaced by automated multi-level approval workflows and delegation of authority. By automating and standardizing processes, businesses can reduce cycle times, improve efficiency and minimize risk.
3. It improves vendor management
With easy vendor onboarding and approval processes in requisition management software, organizations can channel more purchases to preferred or contracted vendors. By leveraging vendor spend data, organizations can easily determine which vendors to continue working with, consolidate vendor lists, and negotiate better terms, discounts, and pricing to achieve cost savings.
4. It facilitates better decision-making
Requisition management software provides complete visibility into current and historical purchasing data. Deploying systems that offer Business Intelligence and artificial intelligence (AI)-powered analytics can provide valuable insights, analysis, and reporting that uncovers purchasing patterns, spending trends, and benchmarks operational performance. With access to real-time data, businesses can make informed decisions, maintain budgets, identify cost-saving opportunities, and optimize procurement cycles.
5. It ensures compliance
Ensuring compliance with procurement policies and audit requirements is paramount to avoiding penalties and mitigating financial risks. By implementing digital internal controls via requisition management software, you can promote transparency and accountability, prevent fraud, mitigate the risks of rogue spending, and empower your team to operate within your defined procurement policy.
6. It enables accessibility
Choosing cloud requisition management software offers agility benefits by enabling quick and scalable access to purchasing processes and data from anywhere, facilitating streamlined workflows, efficient collaboration, and adaptability to changing business needs. Additionally, this mobility allows users to access and manage requisitions on the go, ensuring flexibility and responsiveness in a dynamic business environment.
Leveraging purchase requisition software automation can help businesses enhance the efficiency, accuracy, and speed of their requisition processes, resulting in significant time and cost savings while maintaining a high level of control and compliance.
How to evaluate the ROI of purchase requisition management software
When it comes to the return on investment (ROI) of purchase requisition management, there are several factors to be considered:
One critical aspect is user adoption, which significantly influences the success of any software investment. By simplifying requisition processes through automation and an intuitive interface, employees can dedicate more time to strategic activities, boosting productivity and efficiency. Additionally, mobile capabilities enhance accessibility, making requisition management easier and more convenient for users across operating models. Taking into account the value of your employees’ time can help quantify the cost-saving potential.
Another factor to consider is the improvement in data accuracy and integrity. Having a centralized platform for data entry and analysis helps reduce the risk of costly errors, enables a holistic overview for informed decision-making, and identifies cost-saving opportunities.
Seamless integration with business systems such as ERP or accounting software eliminates manual data entry, reduces duplication of efforts, and enhances data accuracy and consistency across different functions, so it’s important to factor that in when calculating ROI.
When evaluating purchase requisition management software, deployment speed plays a crucial role in achieving a rapid time to value. Opting for a solution that offers swift cloud deployment allows organizations to quickly implement and start leveraging the benefits of purpose-built requisition management software. This accelerated deployment timeline ensures a faster return on investment (ROI) by minimizing downtime, accelerating process efficiency, and enabling teams to swiftly adapt to the new system and optimize their requisition processes.
Lastly, scalability and flexibility should be taken into account. As businesses grow and evolve, their procurement needs may change. Systems with cost-effective software as a service (SaaS) licensing models enable scalability and flexibility, can adapt to changing requirements, accommodate increased transaction volumes, and support organizational growth without compromising efficiency.
To evaluate ROI, it is essential to calculate the potential savings in time, resources, and costs that the software can deliver. Consider both the tangible cost savings and the intangible benefits, such as improved productivity and reduced risk. A thorough evaluation of the ROI will help organizations make informed decisions about the deployment of purchase requisition management software.
Key features to look for in purchase requisition management software
When evaluating a purchase requisition management system, it is important to look for key features that contribute to cost savings.
Here are some efficiency and cost containment-enhancing features to consider:
1. Purchase requisitions and approval workflows
The software should provide a streamlined process for creating purchase requisitions with multi-level approval routing, ensuring efficient and accountable spending practices from any device or location.
2. Budget control and budget-to-actuals
The software should offer budget control features that allow businesses to set and track spending against multiple budgets with real-time visibility into available and committed spend at decision points. This can ensure that spending stays within defined limits. Having budget-to-actuals visibility and reporting provides real-time visibility into expenditure against budgeted amounts.
Automation capabilities allow for the simplified creation and processing of purchase orders from approved requests with automated emails to associated vendors, reducing manual effort, and improving accuracy and risk management.
4. Quoting capabilities
An effective purchase requisition management software should incorporate quoting functionality, which effectively mitigates risk associated with high-value purchases and guarantees procurement at the most competitive prices.
5. Analytics and reporting
Embedded AI-enhanced analytics and reporting tools provide valuable insights into spending patterns by employee, vendor, budget, and transaction, enabling real-time proactive decision-making and identifying opportunities to save.
6. AP workflow
To streamline the purchasing process from requisition to payment, look for time-saving and risk-mitigating features such as invoice approval, 2 or 3-way matching, electronic receiving, and ERP / accounting system integration for end-to-end efficiency.
7. Mobile app
A mobile app allows users to access the requisition management software on the go, enabling quick and convenient requisition creation, approvals, and access to information from any location.
The ability to host internal vendor catalogs or integrate vendor catalogs simplifies the procurement process by providing access to approved vendor catalogs directly within the software, ensuring requisition management and approval processes, budget and policy compliance, and ease of ordering.
By leveraging these capabilities, organizations can realize substantial financial benefits, enhance operational efficiency, and achieve a return on their software investment.
How Fraxion can help your organization save money
Fraxion’s requisition management software is trusted by diverse companies worldwide to efficiently manage and reduce operational costs. With a comprehensive suite of features including automated purchase requisition-to-PO processes, expense management, and approval workflows, PunchOut, and Catalogs, Fraxion ensures that all spending activities are tracked, approved, policy-compliant, and on budget.
Our mobile-friendly and easy-to-use cloud platform enables users to request, review, and approve transactions from anywhere, improving accountability, auditability, and internal control. The software provides powerful AI-enhanced spend analytics and reporting capabilities.
With Fraxion, you can achieve complete spend visibility, unlock the potential for increased savings, and drive responsible and efficient spending practices throughout your organization.
Ready to experience the cost-saving benefits of Fraxion?
We understand that no two organizations have the same business requirements. We’d like to understand your purchase requisition management software needs. Get in touch to arrange a needs analysis, followed by a customized demo.