Vorteile von Einkaufsanträgen

5+1 benefits of working with purchase requests in your company

Celia Schweyer Finway SEO Manager

Surprisingly, there is no “textbook-term” for purchase requests, but whether we use this one, purchase application or order request, you’d probably still know roughly what we are talking about.

Perhaps the reason for the lack of clarity is that purchase requests are not (yet) the most popular method for managing spendings in companies? The status quo has a great need for optimisation here!

A look at your status quo

How is purchasing done in your company at the moment? Purchases here simply mean everything where money flows out of the company, for example:

  • Everything for the office and daily workflow (e.g. furniture, IT hardware and software, subscriptions, office supplies, catering).
  • External staff (freelancers, consultancy contracts, etc.)
  • Travel costs and expenses of staff
  • Materials/logistics for production
  • Expenses for marketing/advertising/PR (e.g. Google Ads)
  • Notary, lawyer or tax consultant fees
  • Insurances
  • and much more.

Perhaps you are like many other small and medium-sized (or large) companies: you do not have clearly defined processes for these individual transactions. Approvals for purchases are made by personal agreement, if necessary by mail or telephone.

What happens next when a purchase is imminent?

  • Do you compare different offers with each other if necessary?
  • Is there a (cost centre) manager who notes the planned sum somewhere for budget/liquidity planning?
  • Can he/she also make a decision on the basis of the currently available budget as to whether the purchase is currently possible or affordable?
  • Does the person making the purchase use the company credit card or buy on account? Who pays, and when?
  • Who checks invoices and approves them?
  • How does the invoice with all the necessary information (e.g. cost centre, G/L account, cost unit) subsequently get to the accounting department or the tax advisor?

Only few companies have defined workflows that cover all eventualities for the complete process from the initial idea of the purchase to the final booking in accounting. The conversion of processes always poses a certain challenge – this cannot be denied. But is it really an insurmountable task? Unfortunately, many companies still hastily opt for the tried and tested because the advantages of optimisation are not clear enough. And yes, there are also companies that will continue to do well with their existing purchasing structures for the next few years.

Therefore, you should know what makes your company tick, what your employees and your finance department need in order to work efficiently. Then it will become clear whether your internal purchasing processes could do with an update on purchasing requests. Because they are simpler than you might think and come with at least a handful of advantages.

What is a purchase request & how is it handled?

Veronika S., marketing manager, needs a 17-inch monitor for her home office to be able to work more productively. A possible purchasing process in this case would look like this if an intelligent business software solution is used:

 

  1. She searches for offers online and selects one or more offers to attach to the purchase request. This way, an approver (Veronika’s supervisor, for example) can choose from them. This should be optional. Maybe Veronika has already found the perfect offer?
  2. She submits the request and selects the correct cost centre (usually that of the department in which the applicant works). This makes the accounting department’s work easier!
  3. She also selects whether the purchase amount should be paid by bank transfer or via a virtual card, which is issued in her name after the application has been approved. Veronika chooses this option because the online shop only offers purchases by card.
  4. Depending on the amount of the purchase, an approver can now be specified. For example, an “auto-approver’ for purchases up to 100€, a ‘supervisor’ for amounts up to 1000€ and the CEO for everything above that.
  5. Veronika’s monitor costs 750€ – so marketing lead Annette P. has to approve the purchase. After Veronika has submitted the entry, Annette immediately receives a notification to check the request and then approve it, reject it or respond with a query first.
  6. Annette approves your application, the virtual card for Veronika is automatically issued and can be found up immediately in her account.
  7. Veronika visits the online shop again where she discovered the offer for the monitor. She buys it with her virtual card issued especially for this purchase by entering its data (name, number, end date, CCV) as she would for a “normal” online card purchase.
  8. Finally, Veronika submits the invoice of the monitor purchase in the smart business software.

Sounds excessive? No, quite the opposite – a “TL;DR” (internet jargon, standing for “too long, didn’t read”), would look like this:

  • Submit a request to buy a new monitor
  • Supervisor:r approves it
  • Applicant:in makes purchase
  • Applicant:in submits invoice

But what are the benefits of this approach for employees, supervisors and finance teams?

Benefit 1: Planned purchases are made visible in the budget in real time

Perhaps you asked yourself in the last paragraph why Annette, as a supervisor, should refuse to buy useful work equipment for her employees? A very good reason would be: The budget does not allow for that this month!

In a holistic financial management system, companies can set individual monthly budgets for all their departments – and every purchase, whether planned or already made, is shown in this budget overview.

When a new purchase request comes in, budget managers (like Annette, who heads the marketing department in this example) immediately see how the purchase will affect their budget and can make informed decisions.

blog-einkaufsantraege-budget

Benefit 2: Smart approval workflows for purchase requests

A major objection to the use of purchase requests is often the fear that every purchase, no matter how small, would first have to go through a complicated approval process first.
Ergo: the process would be made worse and cause more frustration and effort. Of course, that is not the intention here. And as a finance department, you won’t make any friends in the company if work would be slowed down by possibly unnecessary approval hurdles!

With intelligent approval workflows, on the other hand, you can cover all possible scenarios once they have been set up – individually and flexibly. By department, supplier and individually per employee.

Automated approvals for smaller amounts or regular necessary expenses

With automated approvals, requests are released immediately if the purchase amount is below a predefined limit. In our example, Veronika does not need additional approval for purchases under 100€. For regular expenses, unnecessary approval hurdles also make no sense – e.g. the same monthly supply of office materials.

Approvers according to the amount of the purchase

A new photocopier for 20,000€? That on the other hand, should perhaps not be able to be ordered without further coordination. For such cases, you can define whose OK must be obtained for which amounts of money.

Multi-level approval processes

Similarly, it can be advantageous if a purchase needs to be approved by more than one person. Many companies have corresponding requirements for their spending processes. Intelligent software solutions also offer the possibility of defining corresponding workflows for this.

Special rules by cost centre/cost unit or per supplier

Should every purchase in marketing be approved by one person or is one manager the main contact person for a supplier? Approval rules can be customised according to your needs. Depending on the purchasing volume of the departments or supplier structure, you can flexibly determine which purchases must be approved in advance and by whom.

Purchase Requests Click Graphic

Benefit 3: Faster invoice approvals

Time-consuming invoice approvals are one of the biggest and most frequently mentioned “pain points” in companies. It is hard to believe, but the processing of a single invoice can take weeks. Missing or non-optimised processes are to blame – and the “human factor” also plays a role. (How often do people forget to reply to an email, for example?).

With purchase requests jowever, a large part of the approval process is already covered, provided that the budget actually spent was within the scope of the budget specified in the request. After all, minor deviations can always occur. After the approved purchase has been made, all that remains is to submit the invoice, which then has to go through the usual formal checks.

Benefit 4: Individualised (virtual) cards instead of a corporate credit card

In the above example, a virtual card was used, which was issued by a financial software immediately after the purchase application was approved. You may have asked yourself what the advantage is here? Why shouldn’t you continue to make purchases with your usual corporate credit card?

There is actually quite a bit to be said against this tried and tested means of payment. A single corporate credit card not only poses an increased security risk, but also comes with blockers (for SMS confirmations) and does not provide clarity on who has made purchases. Read more about the advantages of virtual cards in particular in this article.

Let’s stick with our example of Veronika’s monitor purchase. The virtual card created in her name is loaded with exactly the budget she needs for her purchase and the purchase is clearly attributable. Confusion is excluded, misuse is ruled out. In addition, this results in another advantage for the accounting department, which also applies if the purchase is made by bank transfer:

Benefit 5: Three-way Matching

Does your finance department, accountant or tax advisor still spend time matching receipts and transactions and finding out (through searches and queries) to which cost centre or G/L account an expense needs to be booked?

These are all tasks of the so-called preparatory accounting. An intelligent finance operating system relieves finance managers of this work almost completely by seamlessly integrating software and staff into the purchasing process. Cost centre or G/L account can already be specified in the request or added by the application approver. Later, the system recognises which invoice and transaction match which purchase request and transfers the invoice data to the accounting software. So nothing gets lost any more! In short:

 

Three-way matching means that software automatically matches the purchase request, invoice and transaction with each other. The pleasant consequences: Less time required and errors are reduced to a minimum. 

The last point was also a very surprising one for us:

Bonus benefit 6: Buying less, but more sensibly?

It sounded surprising to us as well, but we hear from some finance departments that by using a finance software you also save money by purchasing less than before.
And this is not because the purchasing process has become more complicated, but because the handling with a software probably leads to more financial responsibility than the short email/conversation in the meeting (“Should I buy that?” – “Why yes, go for it!”).

So often, before the tool was introduced, purchases were made far too excessively and frivolously. These were also purchases of items that were either not really needed or where a purchase in the next quarter would have made more sense – but no one had the real-time data on budgets necessary for this decision. With intelligent software, savings of up to 10% were achieved, but without any employee missing out on important things.

Unimagined positive aspects sometimes result from the use of a tool! To conclude with internet jargon: purchase requests FTW! (=”for the win”)

Einkaufsanträge mit finway

Purchase requests with finway - How your business can profit from introducing them

Learn more

Read more

Celia Schweyer Finway SEO Manager
Celia Schweyer

Celia Schweyer works at finway as a content expert for financial topics. She writes about the topics that really interest finway’s target group – small and medium-sized enterprises in Europe. She provides advice and clarifies how important and value-adding digitalization in the business environment is for all players.

Related articles

e-invoicing
Accounting
Everything you need to know about e-invoicing: Electronic invoicing will be mandatory from 2025

The federal government has decided that e-billing will be mandatory from 1 January 2025. What does this mean for your accounting? We tell you everything you need to know about electronic invoicing

  • 18.06.24
  • 13 min read
smart subscription management
Cards
Smart subscription management: How CFOs keep track of things

Do you know what your company spends money on? It's not easy to keep track of all software subscriptions. We give you tips on how to set up your subscription management.

  • 17.08.23
  • 7 min read
KPIs and data-driven work in finance
Accounting
Data-driven work: Why finance teams need their very own KPIs

Instead of looking at overall business goals, finance teams should also define operational KPIs for themselves. Here we provide 5 suggestions for accounting ...

  • 03.01.23
  • 9 min read