Crafting a thorough procurement modules checklist is vital for successful software selection. Overlooking this crucial step can lead to more challenges than solutions. In this article, let’s navigate the procurement software landscape so you can make the best choices for your business.
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What This Article Covers
Essential Modules
Incorporating robust procurement modules is crucial to streamline and optimize outcomes. These modules offer a comprehensive set of tools and functionalities designed to meet diverse procurement requirements.
A requirements checklist serves as a guiding compass for businesses with varying procurement needs. It encompasses key considerations, such as integration capabilities, user-friendliness, customization options, reporting and analytics features, and scalability.
By carefully evaluating these factors, you can select procurement modules that align with your unique needs and goals.
1. Budget Management
Advanced procurement systems offer capabilities to help you streamline budgeting processes based on historical and real-time data, limits, timeframes, and more. These features enable real-time budget checks, purchase requisition validation, and budget reservations for taxes, charges and discounts.
With bulk budget lines upload and the option to manually change budgets, budget management capabilities streamline allocation processes and accommodate dynamic budgeting needs. Moreover, you can import budgets from external sources, ensuring data consistency.
These features can also track budgets by locations, departments or custom fields, helping you precisely analyze and optimize procurement strategies.
Avoid errors by maintaining a detailed record of your monthly spend on each supplier so you can budget for future procurement. Source
- Budget Check and Validation
- Budget Reservation for Taxes, Charges and Discounts on Requisition
- Bulk Budget Lines Upload
- Change Budget Manually
- Import Budgets
- Real-Time Lists of All Transactions That Impact Budgets
- Set Budget Limits
- Set Budget Periods
- Track Budget by Locations, Departments or Other Fields
2. Contract Management
From auto-selecting contracts for catalog and non-catalog items to modifying, closing and reopening agreements, procurement software empowers you to navigate contracts effortlessly.
Creating contracts becomes a breeze with customizable templates, ensuring consistency and saving time. Easily create contracts with customizable templates that guarantee consistency, save time, and help enforce pricing terms and legal compliance.
Contract management capabilities can help you precisely define pricing terms to minimize risks and digitize existing contracts to improve accessibility and data analytics.
- Auto-Selection and Application of Contracts for Catalog or Non-Catalog Items
- Changing, Closing or Reopening a Contract
- Contract Creation
- Contract Status Report
- Contract Template
- Defining Pricing Terms on Contracts
- Digitization of Existing Contracts
3. Dashboard and Reporting
Procurement analytics dashboards offer a visual summary of crucial insights on supplier performance management, spending, inventory management and quality metrics. With increased visibility, you can make informed decisions and propel overall business performance.
Also, procurement dashboards serve as essential resources for monitoring, evaluating and analyzing key performance indicators (KPIs) and relevant metrics.
Get a detailed analysis of your supplier compliance stats under your procurement reporting dashboard. Source
- Custom Reports
- Export Reports
- Pre-Built Dashboards
- Pre-Built Reports
4. Invoice Management
Invoice management is crucial to the procurement process. It involves tracking purchases and deliveries so you know you’re only paying suppliers for the products you receive. Although seemingly straightforward, it involves multiple stakeholders and can become complex with greater procurement volume, opening doors to potential errors.
This internal function is overseen by the accounts payable department and integrated with accounting systems.
Procurement software offers invaluable support in invoice management. Invoicing capabilities help you effortlessly locate and view invoices from search results, expediting access to critical information.
Procurement tools can help with invoice reconciliation by automatically converting invoice slips to receipts you can use to pay suppliers, helping you ensure accuracy and reduce manual errors.
These features often include predictive analytics to help you identify invoices at risk of late payment and take proactive steps to avoid potential disruptions.
These features can identify recurring invoices and assist in creating personalized payment plans. You can take this a step further with supplier invoice tolerance rate tools, which help you establish optimal payment terms ahead of time to strengthen relationships with your vendors.
- Find and View Invoices From Search Results
- Invoice Reconciliation
- Predictive Analytics To Identify Invoices at Risk of Late Payment
- Recurring Invoice Discovery and Creation of Payment Plans
- Supplier Invoice Tolerance Rate
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5. Product Catalog
A product or procurement catalog serves as a valuable tool for companies looking to streamline their purchasing process and ensure standardized product availability. They centralize purchasing information to give you an at-a-glance view of product details like price, supplier and delivery time.
Procurement systems let you personalize product catalogs — from adding punchout items and bundling products to comparing prices and availability, take control of purchasing processes directly within catalogs.
Configurable web forms make it easy to capture spend data. Moreover, you can access business policies during shopping, use the product catalog to efficiently search and purchase items, and create a shortlist of product favorites.
Lastly, you can update catalogs through imports to include suppliers and products you already purchase, if the catalog doesn’t include them already.
Seamlessly create and manage local catalogs. Source
- Add Punchout Items
- Bundle Catalog Items
- Compare Price and Availability of Items
- Configurable Web Forms To Capture Spend
- Create and Upload a Product Catalog Using CSV Files
- Display Business Policies to the Users During Shopping
- Product Catalog To Search and Purchase Items
- Product Favorites Shortlist
- Track Product-Related Information
- Update Catalog Items Using Import
6. Purchase Order Management
Purchase order management is the backbone of efficient procurement, so you need a system that provides access to accurate and updated information for specific or multiple purchase orders. It plays a vital role in meeting procurement goals while maintaining a well-balanced budget.
You can forgo the traditional methods like emails and phone calls and instead use automated digital solutions that are specifically tailored to your organizational needs. This can enhance performance and mitigate unnecessary complications.
Procurement modules provide a comprehensive overview and detailed information on purchase orders, all in one centralized platform. This streamlines communication among supply chain participants and empowers efficient actions and decision-making.
Get real-time notifications on purchase order status and tracking. Source
- 3-Way Invoice Matching
- Adding Comments to Purchase Orders
- Automatic Purchase Order Creation
- Conversion of a Purchase Order to an Invoice
- Convert Requisition Price Into PO Price Based on a Currency Rate
- File Attachments
- Multiple eSignatures for Approval
- Purchase Order Creation
- Purchase Order Review and Approval
- Revising Purchase Orders
- Send Purchase Orders to Suppliers
- Shipment Schedules
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7. Receiving and Inventory Management
The strategic combination of procurement and inventory management aims to strike a delicate balance between demand variability and inventory holdings.
To achieve this, modern procurement software offers a suite of powerful capabilities. Advanced shipping notice capabilities help you plan and prepare by providing advanced information on incoming shipments. Through receipt approval and denial functionality, you can exercise control over received items, ensuring accuracy and quality.
With receiving capabilities, you can create return material authorizations (RMAs) within the system to streamline the process of handling defective or surplus items, reducing inventory waste. You can also track in-transit shipments to prepare for incoming orders.
Manual and automatic receipt creation capabilities help you quickly and accurately record received goods. Material inspection features help you guarantee that all incoming items meet the required standards, preventing potential disruptions. The ability to receive items as unordered receipts enhances flexibility and responsiveness.
Effective stock tracking lets you monitor inventory levels in real time, facilitating data-driven decisions. You can create stock transfers to facilitate the movement of goods between locations, optimizing distribution for multi-warehouse operations and reducing excess inventory.
Lastly, the ability to view inventory availability while ordering helps prevent overstocking or stockouts, enabling smarter procurement decisions.
- Advance Shipment Notice
- Approval or Denial of Receipts
- Create Return Material Authorizations (RMAs)
- In-Transit Shipment
- Manual and Automatic Receipt Creation
- Material Inspection
- Receiving Items as Unordered Receipts
- Stock Tracking
- Stock Transfers
- View Inventory Availability While Ordering
8. Requisitions
When it comes to procurement, a requisition serves as a formal request from an employee to the purchasing department, seeking goods or services. Upon approval, the purchasing entity generates a purchase order to the supplier. This pivotal document, also known as a purchase requisition, is a core part of procurement.
You can submit requisitions via automated eProcurement software, reducing duplication efforts. Procurement modules offer features like automated requisition creation, standardized templates and pre-approved catalogs, ensuring efficiency and consistency while minimizing manual tasks and repetitive data entry.
View order status and seamlessly create purchase requisitions. Source
- Approval Reminder
- Bid Management
- Capture Product Data From URL
- Conversion of Purchase Requests Into Purchase Orders
- Customizable Purchase Request Approval Workflow
- RFQ Creation
- Replicate Previously Ordered Items
- Request for Travel Budget
- Requisition Creation Notifications
- Requisition Templates
- Review quotes
- Select First Approval Manager
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9. Sourcing
Strategic sourcing in procurement is a process aimed at finding, evaluating and engaging suppliers based on specific criteria to achieve cost savings and obtain the best value for goods and services.
Procurement software enables the automatic sourcing of online requisitions through pre-established purchase agreements, ensuring swift and compliant procurement processes. You can request quotes from suppliers specifically for catalog items directly within these systems, fostering competitive pricing and vendor evaluation.
With the aid of a comprehensive sourcing dashboard, you can gain valuable insights through real-time analytics and data visualization to make informed decisions.
Sourcing repository features centralize and organize critical sourcing information so your teams can easily collaborate and share information.
Lastly, using supply market intelligence, sourcing capabilities helps you stay ahead by accessing crucial data and trends, fostering strategic partnerships, and optimizing sourcing strategies for sustainable growth.
- Automatic Sourcing of Online Requisitions With Purchase Agreements
- Request Quotes From Suppliers for Catalog Items
- Sourcing Dashboard
- Sourcing Repository
- Supplier Market Intelligence
10. Spend Management
In procurement, spend management is a strategic approach to optimize costs and reduce vendor risks. By analyzing transactions, vetting suppliers and negotiating discounts, you can achieve significant cost savings and improve cash flow.
Using AI, spend management features can detect and prevent fraud and errors in business spend, fostering financial integrity. Through spot-buys, you can quickly execute purchases.
With streamlined forms for SOW-based services and provider timesheet submissions, these capabilities simplify contract management for seamless collaboration. Real-time spend dashboards offer invaluable insights, empowering data-driven decision-making for better financial control.
Additionally, travel and expense report management helps you better track spend and reimbursements.
- AI-Based Automatic Fraud and Error Detection Across Business Spend
- Execute Spot-Buys
- Forms for SOW Based Services
- Provider Timesheet Submission
- Real-Time Spend Dashboard
- Travel and Expense Reports
11. Supplier Management
Supplier management features help you identify, qualify and onboard suppliers. They also facilitate transactions and collaboration. These capabilities allow you to respond promptly to unexpected supply chain management events, emerging alliances and changing market demands.
Advanced supplier analytics help you identify and qualify the right partners, ensuring a robust supply chain. Supplier management features also help expedite onboarding by digitizing documentation and verification procedures.
With integrated transactional features, you can seamlessly conduct transactions with suppliers. You can also centralize supplier communication, fostering efficient information exchange.
Additionally, real-time data insights enable agile responses to unexpected events and market demands, allowing proactive decision-making.
- Contract Management
- List of Existing Suppliers
- Message Suppliers
- Supplier Email Notifications
- Supplier Performance Overview
- Supplier Portal
- Update Supplier Information
12. Mobile Capabilities
Mobile capabilities are revolutionary in regards to how you manage your purchasing and procurement processes. Using smartphones, tablets and wearable technology like smartwatches, mobile procurement offers a variety of advantages that enhance efficiency and productivity.
Flexibility is a key perk, enabling on the go access to the system from any location. Other than this, speed is another vital aspect. Mobile procurement offers real-time transactions and approvals to reduce delays caused by personnel being away from their desks.
Moreover, mobile procurement grants improved visibility into inventory levels and pricing information. Real-time updates enable you to make informed decisions, avoid stockouts and negotiate better deals.
Approve or reject purchase orders on the go using mobile procurement. Source
- Approval or Rejection of Requisitions Using Mobile Devices
- Mobile Photo Uploads
- Mobile Receipt Management
- Mobile-Optimized Platform
- Native Mobile Application
- Push Notifications
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Purchasing Considerations
In addition to determining your procurement requirements, it’s crucial to consider various factors that impact the total cost of ownership (TCO) of the overall solution. These factors range from industry-specific considerations to training options, covering all essential aspects in between.
What is a procurement module?
A procurement module is a specialized software component integrated into an ERP system or as a standalone solution that streamlines and automates various aspects of the procurement process.
It facilitates the management of purchasing activities, supplier relationships and contract administration. It also reduces manual intervention and helps ensure compliance, leading to cost savings and improved procurement strategies.
What essential features should a solution have?
A procurement module should offer features such as automated approval workflows, real-time spend visibility, supplier performance evaluation, contract management and electronic sourcing to fulfill unique procurement requirements.
How secure is the module in protecting sensitive procurement data and maintaining compliance?
It’s crucial to choose a procurement module that prioritizes data security, incorporates encryption and adheres to industry compliance standards to safeguard critical procurement information.
What level of customer support and training does the vendor offer?
Consider a procurement module from a provider that offers excellent customer support, regular updates and comprehensive training resources to ensure successful implementation and usage.
Choosing the Right Procurement Software
Choosing the right procurement software requires a systematic and efficient approach that aligns with your organization’s unique needs and objectives. Our Lean Selection methodology streamlines the process into nine straightforward steps, making your decision-making better and more effective:
- Establish: Define your organization’s procurement needs and objectives.
- Collaborate: Engage relevant stakeholders to gather insights and requirements.
- Define: Clearly outline the specific functionalities and features needed.
- Distribute and Validate: Share RFPs with potential vendors and validate their capabilities.
- Justify: Evaluate vendor proposals based on alignment with your requirements.
- Prove: Conduct demos or trials to verify the effectiveness of the module.
- Rank: Prioritize vendors based on their suitability and offerings.
- Negotiate: Engage in discussions to finalize pricing and contract terms.
- Sign: Formalize the agreement by signing a contract with the selected vendor.
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Next Steps
Finding the perfect solution hinges on understanding your unique business needs. A comprehensive requirements template serves as your compass. It guides you to prioritize essential procurement modules and features that align with your objectives.
If you’re in the market for a solution tailored to your procurement goals, grab our free procurement requirements template to quickly and easily define what you need from your procurement solution.
Have you used any procurement tools before? Which procurement module is the most important to you? Let us know in the comments below!