Procurement software is business software that helps to automate the purchasing function of organizations. Activities including raising and approving purchase orders, selecting and ordering the product or service, receiving and matching the invoice and order, and paying the bill is handled electronically, enabling the procurement department to see everything that is ordered, ensure that nothing can be ordered without correct approvals, and lets them get the best value by combining several orders for the same type of good or even getting suppliers to bid for the business. Buying organisation's choice can be driven by the particular strengths offered by each individual system and the number of vendors available through them. A multinational or otherwise large organization will use a shared procurement system to take advantage of economies of scale to drive down the cost of purchases. While traditionally most e-procurement software systems have been designed for larger organizations, there are now also systems available for the SMB market, such as the Free-Procurement Project by SpendMap and an open source alternative by ProcuMan. Whilst some services are available to purchase through automated systems, the key strength of these systems lies in the procurement of commodities that are much easier to standardise.
The key benefit for organisations using procurement software include ease of administration and potential long-term cost savings. Having a single interface for procurement related management information cuts down the time and effort required to monitor organisational spending. The use of such software also allows procurement managers to control the vendors used by the wider organisation so all employees take advantage of negotiated rates and other terms of service.
Common Features of Procurement Software Systems
Requisitions - Creation of a purchase order with line items to be fulfilled by a vendor. Automated Sending via Fax or Email.
Vendor Follow Up - Automated, or reminders to follow up with Vendors to Confirm Purchase Orders.
Receiving of Goods or Services - Maintaining a physical inventory of goods.
Financial Settlement - Creation of financial and/or inventory related transactions as goods are physically received.