A Surefire Way to Spruce Up Purchase Requisition Approvals
What is the purchase requisition approval process?
The purchase requisition approval process is used to request approval for purchasing goods and services. Supervisors use it to grant or deny a purchase requisition based on organization policies, the legitimacy of the purchase, and business needs. A manually administered purchase requisition approval process can be expensive and error-ridden.
Purchase requisition approval process steps
In a manual requisition management process, once a need is identified, a paper-based purchase requisition is created and attached to supporting documents such as quotations and product specifications. This purchase requisition document is then forwarded through an approval loop. Once the request is approved, a purchase order is generated.
While every organization has its own processes unique to its operating style, there are a few basic process steps that are relevant to all companies. Here are four key steps involved in the purchase requisition approval process:
1. Needs identification
The purchase requisition approval process begins with the identification of a purchasing need. To ensure the genuineness of the need, it is critical for organizations to recognize both the scope of the need and corresponding stakeholders. These questions can be used to understand critical business requirements:
- Why is the product/service necessary?
- What factors will impact this purchase?
- Is the purchase value within or equal to the approved budget?
- When are the goods/services needed?
- Are there any key approvals necessary? Who must provide this approval?
- Can this requirement be fulfilled using an existing contract?
- Do the approved suppliers offer the necessary goods/services?
2. Raising a request
Once a valid need is identified, the request or the procurement professional needs to prepare and submit a purchase requisition form along with other necessary documents, including specifications, to conduct a thorough solicitation. p
Requisitions that are submitted for approval must list all adequate details about the product/service required, requester information (name, department, location), allotted budget, vendor details, and all other information pertinent to the purchase.
3. Review requests
Once a requester submits the purchase requisition form, the request will be assessed and reviewed for completeness and necessity. Every purchase requisition form template must pass through certain approval checkpoints before a purchase order (PO) can be generated.
The purchase requisition approval workflow route will change depending on the organizational hierarchy, purchasing policies, and item value. Purchase requisitions usually just need the approval of the immediate manager and the finance team. If the purchase value crosses a certain threshold, additional approval may be necessary.
4. Generate a purchase order
Stakeholders with the approval authority can either approve or reject a purchase request. If the approval process is complete and the purchase requisition form is approved by all levels, a purchase order is generated with the information available in the PR form.
In case an approver rejects the request, the purchase requisition approval workflow will send the form back to the initiator with specific remarks as to why the request was rejected.
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A surefire way to spruce up purchase requisition approvals
Faster procurement cycles
Cloud-based procurement software can speed up the time taken between placing a request and receipt of products with automated workflows. It helps minimize approval delays and prevent errors.
Smoother workflows enable better resource allocation and elimination of redundancies. This minimizes cost of operation.
Procurement software features analytics and reporting tools that provide insight into process performance. It provides visibility into aspects such as costs, time, quality, vendor performance, and more.
When cloud-based procurement software is used to manage purchase requisition approvals, it facilitates sourcing of products and services from anywhere in the world. Procurement solutions make this possible by supporting multiple languages, currencies, and logistical options.
Lack of mobility can significantly hinder any purchase requisition approval process. Cloud-based procurement software allows you to approve requisitions on the go through intuitive mobile applications.
E-procurement systems allow companies to put together electronic catalogs with competitively priced products from an approved list of suppliers. This helps buyers gain greater visibility into their purchases and eases purchase requisition approval processes.
A compelling procurement solution
If you’re seeking to make your purchase requisition approval processes more efficient, Kissflow purchase requisition software can make it happen.
The intuitive drag-and-drop form builder allows you to customize workflows with ease.
Kissflow enables visibility into the status of purchase requisitions along with instant updates. Powerful analytics and reporting capabilities provide in-depth insight to improve spend control. You can access product catalogs instantly with cloud storage. What’s more, the entire process can be routed effortlessly without manual intervention.