eProcurement Software

What Is Procurement Software?

Procurement software manages the purchasing processes within a supply chain. After using sourcing software to analyze current spending and potential vendor performance, procurement takes over to finalize deals and initiate monetary transactions. As an important element of supply chain management software, procurement systems help organizations efficiently manage their purchasing cycle times and maximize profit on every purchase order (PO).

Procurement Software Features & Functionality

Procurement software can convert a well-researched sourcing process into successful purchase orders through user-friendly processes. This helps control non-payroll expenditures and thus support positive asset management over the long run. After reverse auctions, which can take place through public bids or multi-round private offers, the requisitioning phase begins. At this point, the supplies are bought via the procurement system’s electronic purchasing capabilities. Once the order has been completed, the software analyzes receipts for invoice approval and reconciliation.

One of the obvious benefits of procurement and supplier relationship management software in general is its ability to effectively manage the mass amounts of data that accumulate after an organization’s many purchases. Once purchasing terms have been agreed, procurement software submits the information to all necessary parties for immediate approval, ensuring that the procured products can be delivered as soon as possible. For future reference, the software also stores these approval documents as well as the expense figures for each purchase, which will be used in the next sourcing cycle when the organization once again looks to cut costs.

Specific features of procurement systems include:

Evaluating Procurement Systems

When purchasing procurement software, it’s a good idea not to get caught up in the individual features of each product. Rather, look for something that matches your current and past use, that will simply expedite decisions you’ve already made.

One of the main decisions you’ll make in purchasing this software is to go with a traditional installation-based system or a software-as-a-service “e-Procurement” system. Procurement software must handle compliance issues, including the Sarbanes-Oxley Act of 2002 which placed harsher regulations on accounting practices. That means you also need to ensure your procurement software is SOX compliant - maintaining full and reliable disclosure in financial reporting.

Ask the following questions when evaluating a procurement software system:

• What products do you buy? Does this software match those use cases?
• Is the software SOX compliant?
• How will this software support you in your commodity purchasing?
• What’s the PO approval and delivery process?