Guide to SaaS Purchase Requisitions

Managing software acquisitions efficiently is crucial for maintaining operational agility while staying within budget. This comprehensive guide will provide detailed insights and practical advice on navigating the purchase requisition process, from identifying software needs to obtaining necessary approvals and ensuring seamless procurement: 

• The purchase requisitions procedure in SaaS.
• Benefits of using purchase requisitions in SaaS.
• Difference between purchase requisitions and purchase orders.
• 5 tips for simplifying and improving the purchase requisition process.
• Why purchase requisitions are crucial for software procurement.
• Purchase requisition FAQs.

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The purchase requisitions process in SaaS

The workflow and approval process for a SaaS purchase requisition typically follows a standard pattern. Team members identify a SaaS need and create a requisition — an internal document initiated by an employee or department to request the acquisition of goods or services — for a new tool or service. They then gain approval for the request and convert it into a purchase order before receiving and activating the service. 

Identify the need and create the purchase requisition

Imagine you work at a software company that’s scaling rapidly. You’ve onboarded many new employees over the past few months and are having trouble collaborating and keeping track of projects in progress. To mitigate communication issues, you identify a need for a new project management tool to enhance team collaboration. 

Once you identify the need, you need to fill out a purchase requisition form to formally request a software purchase. In the requisition, you will include items such as:

• Date of the requisition request.
• Your name.
• Requisition number.
• The name of your department.
• A description of the SaaS tool needed.
• Subscription type, user licenses, price, and any other relevant metrics.
• The reason you need the tool (e.g., improving project tracking).

Gain approval for the request

Once you complete the request form, you submit it to your manager for approval. The manager reviews the request to ensure it aligns with departmental goals and budget, then forwards it to the finance team or purchasing department.

The purchasing department receives the SaaS purchase request and forwards it through the appropriate approval workflows.

Convert the purchase request to a purchase order

Once a requisition is approved, the procurement team creates an official purchase order (PO). Similar to requisition forms, PO forms include:

• PO date.
• Purchase order number.
• Company address and contact information.
• Billing and shipping information (if applicable).
• Purchase order terms.
• Delivery date (activation date for SaaS).
• Items with their description, quantity, and unit cost.
• Total cost for that purchase order.
• Any taxes.
• Special notes or instructions.

The procurement team then submits the PO to the SaaS supplier. Once the supplier agrees to fulfill the order according to the outlined terms and delivery dates, the process moves into fulfillment.

Activation and delivery of the SaaS tool

The purchase requisition form has led to its intended outcome. The SaaS tool is activated and delivered as requested. The cycle starts anew whenever a new SaaS request is made.

Benefits of using purchase requisitions in SaaS

Purchase requisitions streamline the software procurement process and ensure that SaaS investments align with strategic priorities and fit within an organization’s budget. They reduce unauthorized spending which helps improve budget control and facilitate a more organized and efficient procurement process, allowing teams to track software needs, approvals, and purchases systematically, ultimately leading to better resource allocation and operational efficiency.

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Difference between purchase requisitions and purchase orders

Purchase requisitions and purchase orders are distinct stages in the procurement process, each serving a unique purpose and requiring different levels of approval. 

A purchase requisition is an internal document initiated by an employee or department to request the acquisition of goods or services, such as SaaS tools, and must be approved by a department manager before being forwarded to the procurement team. The purpose of the document is to identify the need and obtain initial approval for a new purchase.

In contrast, a purchase order is an external document created by the procurement team after the purchase requisition has been approved. It formalizes the request by outlining specific terms, conditions, and costs and is sent to the supplier for fulfillment. The purchase order represents a commitment to purchase and requires final approval from procurement and finance departments, ensuring compliance with company policies and budgetary constraints.

5 tips for simplifying and improving the purchase requisition process

1. Use technology for automation

Software like Vendr automates the requisition process, routing requests to the appropriate approvers, tracking the status in real time, and reducing manual paperwork. 

2. Standardize forms and create templates

Use standardized requisition forms with clear fields to ensure all necessary information is captured consistently. This reduces errors and the need for follow-up clarifications. For frequently purchased items or services, create templates to simplify the requisition process. This can include pre-approved supplier lists and standardized product descriptions.

3. Train employees

Regularly train employees on how to properly fill out requisition forms and understand the procurement process. Well-trained employees will make fewer mistakes, speeding up approvals.

4. Set clear approval hierarchies

Establish and communicate clear approval hierarchies to ensure that requisitions are reviewed and approved by the correct managers without unnecessary delays.

5. Monitor and analyze the process

Regularly review and analyze the requisition process to identify bottlenecks or inefficiencies. Use data analytics to make informed decisions about process improvements.

Why purchase requisitions are crucial for software procurement

Software procurement can be a challenge due to the rapid pace of technological advancement and the complexity of licensing agreements, payment terms, and pricing models with SaaS tools. Plus, organizations are using more SaaS tools than ever before. If not tracked properly, this could lead to redundancies and overspending on unnecessary tooling. 

Vendr’s platform simplifies the procurement process, making it easier to manage and approve purchase requisitions. Plus, with a vast trove of data about SaaS suppliers, Vendr offers transparency into pricing benchmarks and commercial terms that can help organizations achieve cost savings and negotiate more favorable contract terms. 

Purchase requisition FAQs

Can multiple items be included in a single purchase requisition?

Yes, multiple items can be included in a single purchase requisition, allowing for the consolidation of related needs into one request. This approach streamlines the approval and procurement process, reducing administrative overhead and ensuring more efficient order handling.

What happens after a purchase requisition is approved?

After a purchase requisition is approved, it is forwarded to the procurement team, which creates an official purchase order (PO) based on the requisition details. The PO is then sent to the supplier to formalize the purchase agreement and initiate the fulfillment of the requested goods or services.

How can I ensure my purchase requisition is approved quickly?

To ensure your purchase requisition is approved quickly, provide complete and accurate information, including detailed descriptions, justifications, and cost estimates. Follow standardized forms and procedures, and ensure the request aligns with departmental budgets and policies. Additionally, submit the requisition through automated procurement software to expedite routing and approvals.

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