Streamlining Purchase Requisition Form Processing with Workflow Automation

Purchasing is universal in any business, from material requests to IT requests to equipment purchases. How purchasing is done is what matters in a business. Multiple departments need materials from time to time, some of them can be sourced internally while some require external sourcing. Irrespective of the source, every purchase requires a requisition form.

A requisition form contains complete information on the requirements of any business. A streamlined purchase requisition management process empowers line managers to manage orders efficiently and cost-effectively.

What are Requisition Forms?

Complete details on the material business requirements are contained in a business requisition. What is a requisition form? A requisition form is the official simple form that an employee uses to request supplies or services. Requisition forms are sent to whichever department or branch in the organization is responsible for acquiring material or making the purchase order, either from in-stock inventory or from external suppliers.

Whether it is office supplies, raw materials, or consumables, different departments cannot purchase directly from vendors. There is a separate purchase department that is in charge of finding vendors, overseeing the purchase process, and handing the invoices to accounts.

When an employee of an organization needs to order something on behalf of the organization, they need a formal document. The definition of a requisition form is a formal document that contains all the information on the material required by the department. The purchase requisition informs the purchasing department of the need for a product or service, which makes them initiate the procurement process.

The purchase requisition process involves making the application, tracking, and approving all the purchase requisitions made in the organization. Transferring the requisitions to those in charge, informing the finance and accounts department, and working with the purchase departments to ensure that the request is fulfilled, are the main points that the purchase requisition process focuses on.

The common reasons for submitting a requisition form are:

• Supply purchases
• Expense reimbursements
• Invoice discrepancies
• Change order requests

Importance of Requisition Forms

Why is it important to have requisition forms? A requisition form is a formal request for an item or service. Companies use specific requisition formats to request items pertaining to separate departments.

Stay updated – The purchase requisition helps companies stay on top of any items or services that are procured by the company. To kick off the purchase process, the requisition form must be submitted. The purchase request form also helps keep a record of the request.

Essential for procurement – Requisition forms are essential for smooth procurement processing. Having a streamlined requisition process prevents duplication and fraud, and also enables management to track and control employee purchases.

Audit trail – Requisition forms help maintain an audit trail of all the purchases by employees. Having an audit trail of the requisition form helps organizations streamline the process. Purchase requisitions are legal proof that a certain item was requested, approved, and purchased. Accurate records of purchase data are extremely useful during the audit of the organization’s accounts and finances.

Forecasting and budgeting – Documenting all the purchases help in forecasting and budgeting expenses for every department. It also helps in understanding the purchasing pattern of the department and projects the demand forecast as well.

Legitimate purchases – Without a proper purchasing requisition process, employees may tend to overspend or log requests for supplies already present in the organization’s inventory. A purchase requisition helps control costs by encouraging the company to make only legitimate purchases.

Improved communication – A purchase requisition is proof that a request was made and delivered. All the details of the request are clearly written in the form, which leaves no scope for conflict both internally and externally.

Centralization of purchases – By making the procurement department in charge of approving and purchasing the requests made, procurement becomes a lot easier since purchases are bundled. The negotiating power of the organization is also increased, which helps them get better prices from suppliers.

Manual versus Digital Requisition Forms

The paper-based requisition system is on its way out – along with the manual, error-prone forms. Manual requisition forms are being replaced by intelligent, dynamic digital forms that can be tracked effectively. Moving from paper/Excel-based forms to an electronic, web-based purchase requisition system provides several benefits to the purchasing department. Here is a comparison between manual and digital requisition systems.

The manual purchase requisition workflow may work reasonably well for businesses, especially startups and small businesses. Businesses that operate at small scales are able to manage the PRs manually, but as business operations scale up manual processes seem inadequate. The margin of error and inconsistency also increases proportionally as businesses scale up. The main reason for this is that the requisition passes through the hands of several individuals. Added to this, inevitable queries, potential rejections, and resubmissions further complicate manual processing.

Understanding the Purchase Requisition Workflow

The purchase requisition workflow varies for businesses of different types and sizes. Each step of the workflow is unique to the operational model of the organization. For example, some companies may work with a fully automated workflow, while others may follow a hybrid workflow. Irrespective of the type and scope of the business, there are some key components of the workflow that are common across businesses.

Creating a requisition

The first step is the creation of a requisition by the employee for the purchase of goods or services. The requisition contains all details on the quantity, type, grade, and other specifications related to the service or product. The date by which the delivery is expected is also mentioned in the requisition.

Review of the requisition

The requisition created by the employee is then sent for review to a higher authority, most likely the line manager. The details mentioned in the requisition are reviewed by the concerned person for validity, within the budget, and compliant with the company’s standards. In cases where the cost of goods and services is high, more than one reviewer is involved in the process. This being the case, the reviewing step is repeated at a higher level.

Approval/rejection

During the review, any missing information in the purchase requisition is pointed out by the reviewer. The requisition is sent back to the requestor with comments/queries on the missing or incorrect data. The employee that submitted the request reviews the comments and provides the required information and resends the request to the reviewer. In case the information conforms with what the reviewer expects, the requisition is approved. In some cases, the reviewer may be dissatisfied with the information on the requisition, in which case he/she rejects the request.

Stocktaking by the inventory department

The approved request is routed to the inventory department, where the requisition details are checked against the company’s existing stock. If the requested materials are not in stock, the request is forwarded to the purchasing department.

Screening by purchase department

The request is processed by the appropriate officer in the purchasing department. The officer identifies the business need for the requested products/services to check the legitimacy of the purchase and confirms that the requisition is duly signed and authorized. Even at this stage, the form may be sent to the requestor for lack of details.

Requisition to order

When all the stakeholders are happy with the contents of the requisition, the requisition will be approved and the corresponding purchase order is raised to be sent to the external vendor.

Order delivery and assessment

Once the purchase order is fulfilled, the receiving department checks the order for quantity and quality. The 3-way matching process is used to confirm the accuracy of the order.

Requisition Form Templates

As mentioned in the preceding sections, requisition forms can be raised for multiple purposes. Construction order forms, property maintenance requests, IT requests, Information requests, and Purchase requests are some of the types of requisitions raised by various departments of the business.

How to create a requisition form?

There are several templates available for requisitions of various departments. For example, the purchase request form template will provide the framework to provide all the details of the purchase order. The usual details that are provided in the requisition are:

• Name and department of the requestor
• Date of the request
• Products and services requested
• Item description, price, and quantity
• Reason for purchase
• Legal name of the supplier

By using a purchase request form template you can handle all purchase requests while ensuring compliance and eliminating time lag.

How does Automation Streamline Requisition Workflow?

Leveraging technology to improve the efficiency of business workflows is among the top priorities for any business. Automating the requisition workflows saves time and money for the business. Using a digital purchase requisition system or e-procurement software, users can raise a purchase requisition online by choosing from a range of pre-populated and customized templates.

They can submit the purchase requisition to the next reviewer at the touch of a button. Users can also set up workflow rules within the requisition form templates based on select information. Once these rules are set, a preview of how the rules work may be done by the users. End-user workflows can be simplified greatly by creating requisition forms.

The simplest and the most effective way to streamline the purchase requisition workflow is to use an e-procurement solution. An e-procurement solution automates the entire procurement workflow, from purchase requisition to PO closure. Here are ways in which automation streamlines the requisition workflow:

Faster approvals

Automating the purchase requisition process ensures that they are reviewed and approved on time. An automated system issues notifications and alerts to stakeholders concerned with the approval of purchase requisitions so that they do not miss out on the approval deadlines.

Elimination of paperwork

Processes that involve a lot of paperwork tend to be slower and are prone to data errors. Manual entries on paper are subject to human error and inconsistencies. Moreover, loss or damage to important paper documents causes delays in procurement workflows.

Minimal errors

Automating the requisition workflow eliminates the human intervention in repetitive data entry steps in form creation and data validation. When errors are minimal, less time is spent on validating and correcting data.

Better employee productivity

Automation streamlines the requisition process by relieving employees from having to work on repetitive steps. When employees are freed from repetitive steps, they get more time to focus on productive and high-value tasks. More focus on productive work, in turn, increases the overall productivity of the team, and eventually the organization.

Improved vendor relationships

A streamlined requisition process ensures consistency and transparency in vendor relationships. Establishing clear and straightforward relationships with vendors helps build strong long-term vendor relationships.

Improved spend visibility

Automating the requisition workflow provides deeper visibility into the expenditure of the department. The managers are well aware of the spending of their department so that they can make informed decisions on purchases. Real-time visibility into the status of the requisition also increases the transparency of operations. Each stakeholder is aware of the status of the requisition and spends less time on follow-up.

Shooter procurement cycles

A streamlined requisition workflow accelerates the procurement cycle. Shorter and more efficient procurement cycles pave way for better vendor relationships.

Benefits of Automating Purchase Requisition Process

Using web-based purchase requisition forms provides various benefits for companies that are looking to improve and streamline the requisition process. The main benefits of automating the purchase requisition process are:

Improve compliance and process standardization –

Automating the processing of requisitions improves the compliance of the purchasing process. These forms are available 24/7on any device. Errors in data entries with required fields and validation are eliminated by automating the process. Approval errors and rework with required fields and pre-fills are eliminated by automation.

Reduces purchase request cycle times –

Automation of requisition processing helps route requisitions to appropriate staff based on business rules. The automated system creates alerts, reminders, and escalations that avoid bottlenecks. Digital forms reduce the cycle time for processing requisition forms. Tracking and reporting trouble spots in the process can be done effectively by automating the request processing.

Keeps control of spending –

Automation of requisition processing helps track requisition status in real time. The routing of the requisition can be customized based on the cost, project, department, etc. Elimination of paperwork and associated costs bring spending under control and optimizes the procurement process.

Cflow is a cloud BPM solution that can automate key business workflows quickly and effectively. The visual form builder in the software makes workflow creation a breeze for the team. Procurement, finance and accounts, HR, CapEx approvals, and IT operations are some of the business workflows that can be automated using Cflow.

Conclusion

While requisition forms may seem like additional work, they play an important role in business processes. The requisitions definition includes all those forms that gather and document information about processes and material/service requirements of the organization. A digital requisition form enables businesses to streamline the procurement process and accelerate the procure-to-pay process.

Requisition forms simplify the procurement process by eliminating redundancies and repetition. Investing in workflow automation software like Cflow, provides several benefits for your business streamlined, error-free requisition process, faster approvals, and improved productivity. To explore Cflow, sign up for the free trial today.