Purchasing systems are ways for companies to efficiently purchase goods and services at optimum terms and the best prices. Many companies use computerized purchasing systems and even the smallest company can find a software program that will manage the more common elements that are found in the more complex purchasing systems.
A method used by businesses to buy products and/or services. A purchasing system manages the entire acquisition process, from requisition, to purchase order, to product receipt, to payment. Purchasing systems are a key component of effective inventory management in that they monitor existing stock and help companies determine what to buy, how much to buy and when to buy it. A popular purchasing system is based on economic order quantity models.
Purchasing systems makes the purchasing process more efficient and helps companies reduce supply costs. Computerized purchasing systems can cut companies' administrative costs, shorten the length of the purchase cycle and reduce human error, thereby minimizing shortages. They can also simplify order tracking and make it easier to manage purchasing budgets by quickly creating expenditure reports.