Most organization believe that Negotiating the Prices with the Vendors is the best way to reduce expenses. With Smart Purchase the organizations will find different ways of reducing and controlling the Expenses.

The Smart Purchase System will help in the following way:

• All Purchases will have to get approved before the expenses are incurred. This itself provides huge savings to the organizations are unnecessary purchases are not made.
   

• The Purchase Department can collate the requirements across multiple locations for the same Items and place consolidated orders on the Vendors. This ensure the organization get Bulk discounts and save money.
   

• Since Goods Received Notes (Delivery Challans) are entered online by the receiver of the Goods - there is no delay in reconciling the material ordered and received and hence in processing the vendor payments. This means the organization can offer better payment terms and get better prices. This not only helps the organization save money, it also helps them build better relations with the Vendors.

Organizations in the Services Business use ERP solutions for accounting purchases would benefit by implementing Smart Purchase. It would streamline the entire Purchase Management process, create Visibility of the Expenses for the CFO and reduce Expenses.

Organizations using ERP Solutions for Procurement Management, also find this system useful. How? The ERP solution helps these organizations create Purchase Orders and Make Vendor Payments. However, the processes related to Purchase Requisitions, Approvals for Purchase Order, Approvals for Vendor Advances and Payments are missing from the ERP solutions. More often than not the Goods Received Notes (Delivery Challans) are not entered in the ERP system by the receiver of the Goods - the receiver actually couriers these GRNs to the Head Office, where they are entered into the ERP; lot of time gets wasted.

Most of these organizations use the ERP for procuring Inventory Items; non-inventory item purchases are made in isolation by local offices. The non visibility of these expenses to the centralized Finance Team creates Cash Flow problems and at the same time increases the expenses of the Company.

The system will Remind the Users of regular payments like Electricity Bills, Rent, Telephone Bills, Corporate Credit Cards, etc.

The system will help the CFO get Visibility into the Expenses BEFORE they are incurred and ensure Rule based Approvals. It will help organizations Improve Vendor Relationships.



 

Vendor Database

Smart Purchase allows you to build stronger relationships with your vendors, by ensuring that there is a turn around time that you can commit to them, and when they call up to enquire about the status of a payment, you can accurately, and transparently inform them.

To start with, you need to build a database which lists not only the statutory information about your vendors, but also other information like who are the key persons, what items or services do they supply, rates for the same, and so on.

This database ensures you make payments to vendors only if like PAN card, TIN number is recorded with you.

You can search out which vendors are closer to a specific office of yours. You can find out which vendors offer printing services for your brochures. You can find out which vendors have the lowest rates for specific kind of machine.

You can also record payment modes to be used for different vendors, which enables you to automate payments for the vendors. You could have arrangements with your regular vendors to do a electronic fund transfer to their bank account, thus saving you time and effort.

If your vendor master already exists in another system, our system is able to pick the data from there.

Service and Item Master

If you have an ERP you probably already have codified items into a master database. Smart Purchase can read that data.

You can create item master here in Smart Purchase for regular items which you need to purchase for your inventory, or for ad-hoc items which you purchase only as and when you need to. For example, laptop and post-its.

You can also store services which you expect you will purchase at anytime. For example, you could codify services like HR Training, Management Consulting, Repairing Services, IT Support Services etc. This helps you track expenses against these items, and also compare rates.

You can also define tax rules if they are specific to any items.

When procuring any item of service, be it CAPEX or OPEX, you can refer to the item code from this master list.

Purchase Requisitions

The best place to control expenses is right at the start, i.e. from the time of the request itself.

In many organisations, the challenge is that Purchase Orders are given out without an approved Purchase Requisition. You can now enforce the process of having Purchase Requisitions filled out and approved before purchases are made.

When you authorize managers all across the company to raise electronic Purchase Requisitions, you bring in visibility into what possible purchases are in the pipeline. You make it easier for line of business managers to approve possible purchases after due considerations. You make is easier to know which cost centers will bear the costs.

A manager can raise the Purchase Requisition (PR) by specifying the details of what is required to be purchased, as well as the justification.

The approval rules for the Purchase Requisition are as per your matrix which you define.

In the finance department, once you review all the approved Purchase Requisitions, you can raise a Purchase Order.

To get better rates you can club together requirements from more than one PR.

If your financial planning does not allow for it, you can procure part of the items requested, and procure part of them later.

While procuring you can ensure you allocate the right budget codes and cost centre codes. This makes your MIS very useful.

In future, when you look at any Purchase Order, you will be able to trace it to the right PR, which will why the item was purchased, and where the costs is to be allocated.

Purchase Order

This is a critical process in the finance team. You need to ensure thatthe purchase is justified, the timing is correct, the cost centre codes are clear, and that you are getting the best rates.

Smart Purchase supports you in manyways in this process of procuring.

First of all it helps you ensure that the request or justification isapproved before you start the purchase process.

It helps you allocate the cost centres and budgeting codes so thatlater on MIS is available in a jiffy.

It helps you search for the vendors who can supply you the products orservices you are looking for.

It helps you ensure that whatever is being purchased is against acodified list of items and services, which again, is essential for MIS.If an item or service does not exist, you can enter it into the itemmaster.

You can specify the details of the purchase and the vendor. You canalso specify expected taxes. All kinds of taxes can be captured - VAT/Service tax/ Surcharge/ Octroi, etc.

The Purchase Order needs an approval before it can be issued out. TheWorkflow Configurator helps you define all the rules related to who canauthorise what kind of purchase and upto what amount.

You can set up budgeting codes so you know how much has already beenprocured under a particular budget.

Smart Purchase offers you a 360-degreeview of a Purchase Order. From tracking to the P R, to issuing it out,to advances given, to vendor history, to vendor bills, deliveries andpayments.
 

Advance Payments

For many of your purchases you would need to give advance payments tovendors. Subsequently these payments need to be tracked, and settledagainst the bills which the vendor raises.

Smart Purchase enables you to capturedetails of advances which need to be paid, and ensure authorisedapprovals. After approval, you can make payments through the system.Detailed MIS gives you breakup of the total advances given, by vendor,by time period, etc.

Once the vendor invoice reaches you, an easy interface is available toyou to settle the advances against the invoices.

GoodsReceipt Note

After the vendor receives the Purchase order, he delivers the goods andservices often, directly to the line of business managers, rather thanthe Finance team. This makes it time consuming for the Finance team tocoordinate with business users all across locations to find out if theitems have been delivered.

It is important for the Finance team to track deliveries for 2 reasons.

One, once the deliveries are made it is time to provision for payments,since the vendor bill will soon follow.

Two, the record of a satisfactory delivery is a primary condition forapproving the vendor bill as and when it reaches the Finance team.

Coordination on services rendered or products delivered becomesseamless, thereby saving time of all concerned, and ensuring thatvendor bills are passed only after this stage.

Integration with your Accounting System / ERP

NEXSTEP Expense Management provides an integration layer which makesit easy to integrate with your accounting system.

You could integrate with various systems like SAP, Oracle Financials,or SUN Accounting,amongst others.

This offers you the benefits of:

• you savetime in creating accounting entries

• you leverageyour investments in the Accounting System you own

• you ensurethat data is not re-entered, if it exists in the Accounting System,thereby simplifying the management of master data.
  

MIS

In Smart Purchase, you get an end to end MIS, which isinstantaneously updated, and available to you real-time.

So the minute a branch manager enters a new vendor bill, you see it onyour system as a new bill for approval.

You can view and analyse past expenses – for any location,person, month, account code, etc. This gives you insights which helpyou to reduce expenses.

The 360 Degree View of the Purchase Order is a powerful tool forcontrol and decision making for any vendor. You can minimise fraud andprevent double payments through this.

The MIS offered through the system offers you these benefits:

• you savetime in pulling out information about expenses from the system

• you gaininsights on spend patterns, which helps you reduce expenses and getbetter rates from vendors

• you managecash flows better due to visibility on pending payments

• you saveeffort of handling cash and cheques due to the automation of paymentsthrough fund transfer

• you minimisefrauds and payment mistakes

• with fewerteam resources you can now process more payments

• payments aremade only after due approvals, and hence accountability from themanagers concerned.