The evolution of technology is a boon for industries. It eases the operations of the business while allowing them to vitalize their brand recognition in the market.
At present, when the market forces keep fluctuating, it directly affects the purchase operations of the business, making it quite difficult for an organization to manage its purchase operations effectively due to this consistent fluctuation. To overcome this problem, technology brought to light on the Purchase management system.
What is the Purchase Management System?
Purchase Management System is an ERP that assists the organization in managing purchase operations while and maintaining its record properly. It helps in creating purchase orders, receiving goods, making payments, and permits you to return defective goods with financial instruments. It allows you to integrate it with the inventory control to determine exact stock quantities, seasonal trends, etc. It aids to fasten the operations and brings more transparency at an effective cost.
Why need a purchase management system when having professionals for this work?
Agreed, that you have a proficient workforce, but as an organization, we must be aware that in the age of this fierce competition, dependency entirely on manual work is not a rational way of doing business. Therefore, integration of manual work with technology is no more an option but has become a necessity to ensure that your business stands high in the market by keeping pace with the latest technical scenarios.
Purchase management system not only reduces the workload but also aids a business in many ways. The prime benefits of the purchase management system are:
Flexibility - It provides flexibility in the organization's activities by centralizing all the purchase-related information in one place for further analysis and utilization accordingly. In addition, if you want to make some changes, you can effortlessly navigate the ledger or database quickly.
Speed up the operations – Purchase management system consists of automatic tools which speed up the purchase operations in the organization and at the same time avoid making mistakes.
Reduces operational cost – Since the purchase management system is capable of executing multiple operations, organizations do not need to hire an additional workforce or maintain hundreds of files, thus reducing operational costs.
Improves quality – As humans carry out manual work, there are high chances of mistakes happening. Whereas, the purchase management system runs on the instructions of codes that are installed in it with the help of programming languages thus mitigates mistakes, and if by any chance it happens then it sends a real-time alert to the user.
Features of the effective purchase management system
Now that we know what purchase management system is and its benefit to the organization, let’s focus on what it takes to build an effective PMS software:
Purchase requisition – The PMS software must have a purchase requisition feature. It means to send a request from production or other departments to the purchasing department within the organization regarding the items and services they need within a specific period to execute their work. Along with this, it may also contain a budget to make the manager aware of the estimated cost before the purchase is made. With this feature, it becomes easy for the organization to facilitate internal communication within the department easily and to make sure that the items and services which are requested by the department are delivered within the time.
Purchase order – Purchase order means to place an order to the outside vendors on the basis of the purchase requisition. After sending the order, the PMS software assists the purchase manager to analyze the different quotations of the vendors and to select the best one by doing accurate investment analysis and applying methods of evaluation as per the organization’s policy. PMS provides accurate results, making it easy for the purchase manager to execute a negotiation process if required.
Purchase invoice – A purchase invoice refers to the document issued by the purchase manager stating that the order is valid and is fulfilled by the vendor. This document consists of all the costs incurred on the purchase. With the support of PMS software, it becomes quite easy for the purchase manager to create the invoice since the software already has the complete information from the beginning. It eradicated the chances of calculation errors and gave out a standard invoice to the manager.
Vendor management – Vendor management is a crucial task for the purchase manager. It includes the segmentation of vendors after analyzing their impact on the organization. PMS software contains information about all the vendors who work collaboratively with the business, and the vendor management feature makes it quite simple for the manager to analyze and segment the vendors based on specific business requirements.
Analytical feature – Without this feature PMS software is always incomplete. Business opts for ERPs to simplify the analytical process to eliminate the probability of errors. Analytical features in the PMS software aids managers to analyze the cost of investment for different quotations while applying different methods of evaluation like IRR, MPV, PBP, and so on and also in the analysis for vendor management. The software gives out the relevant result to the managers, supporting them to make a logical decision.
Project budget – This feature in the PMS software helps the purchase manager to create an annual budget for the potential purchase transactions based on data received from different departments and the organization’s future strategy. Besides, if there is huge machinery required, then also it aids the manager to formulate the individual budget for the machinery by doing analysis and making adjustments for the old machinery.
Document management – PMS software manages multiple documents for the organization such as purchase requisition, order, invoice, budget, graphs, ledger for the purchase, etc. It saves the organization’s expenses as now there is no need to maintain multiple registers and paper documents and also no need to appoint an individual to manage all those papers. That’s why PMS software’s cloud server should have storage space according to the scale of the organization.
Integration – PMS software should be able to integrate with the inventory control to make the operations more efficient. Apart from inventory control, if the business wants it to add with other software such as financial software, accounting software, they can integrate this software. But only if PMS software and other software have this feature. The integration combines the work and brings more efficiency while decreasing the time. So make sure that your PMS software has this feature.
Make Payment – PMS software must consist of a feature for making payments online. By incorporating this feature, your PMS software becomes fully automated, which can manage the complete management process, from the purchase requisition to make an order to make payment while managing documents and performing analytical functions. But confirm that proper security measures have been taken to protect your data.
It seems easy right!! Like just implement technology in every vertical in the organization, and your business will immediately start climbing up the ladder of success. But in the practical world, it is not the walk on petals, considering the fact along with you; other businesses are also incorporating technology. That’s why your PMS software must include all the above features and some additional auxiliary features too to make sure you always stay ahead.
Now if you are also planning to opt for Purchase Management Software, then who can be the best service provider than Hvantage Technologies!!
Our solution comes with a purchase module that is very flexible to handle the entire inward process. Inward can be in the form of Goods Inward Note(GIN), Goods Receipt Note(GRN), Transfer In, or Purchase Invoice. We offer the best in its class environment for you to manage all your purchase processes while maintaining all key information of your purchases and ensuring that each purchase order is legitimate and authorized.
Experience enhanced corporate environment with us!!