Top Purchasing Software

Purchasing Software

Automate purchasing operations and boost your business profits by leveraging the best Purchasing Software.
Purchasing software automates the purchasing process workflow and controls maverick spending, allowing the business to comply with the budget thresholds. The software keeps track of previous purchases to help predict trends and make informed decisions. Businesses can reap the benefits of automation, witness a rapid upsurge in profits, and gain a competitive edge by deploying the top purchasing software.

What Is Purchasing Software?

A purchasing system or purchasing software or set of automation tools on a unified platform designed to control purchase lifecycle management to acquire goods and services for businesses. The software facilitates versatile features to streamline various purchase-related processes, including placing purchase orders, managing orders, invoices, purchase records, maintaining suppliers’ data/communication, inventory management, forecasting purchase needs, etc.

How Does Purchasing Software Support Business Growth?

Purchasing systems help streamline business operations through enhanced management of purchasing processes and resources. It enables automation, time-saving, increased process efficiency, improved transparency, inventory optimization/elimination of wastage, overspending control, and enhanced customer/vendor relationship management. Modern online purchasing software tools automatically place inventory orders, generate required documentation/contracts, integrate with your existing accounting system for seamless linkage of purchasing and accounting records, and offer predictive analytics for informed decision making.

How To Choose the Best Purchasing Software?

The task of finding the ideal purchasing software can be extremely time-taking and confusing. Hence, the researchers at GoodFirms have critically analyzed every aspect of purchasing management and formulated the following list of the top purchasing software for you with prominent features, reviews, and pricing information of each software. Explore this list and handpick the best purchase order software for your business by leveraging the filters for required features, business size, pricing model, deployment type, and more.

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List of Purchasing Software | Best Purchase order software
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List of Purchasing Software | Best Purchase order software

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Buyer’s Guide

Introduction to the buyer’s guide for Purchasing Software

In any organization “Purchasing Process” is at the core of the business process. It assists the underlying business operations in achieving the goals set by the organization in a given timeline.  A consistent “Purchasing Process” adds value to the organization’s product and improves business performance.

In simple terms, the objective of implementing a robust purchasing process is to;

  • Purchase goods in the right quantity and quality
  • Purchase at the right price
  • Value for money
  • Identify unnecessary spend and reduce the cost of business operation
  • Build long term relationship with suppliers
  • Reduce market delivery time to market

In the current era, the business cannot bear the expense of a mismanaged purchasing process. The excess ordering of goods may block organization funds, which can be otherwise used for marketing or other business-related tasks, while a scarce amount of goods can make an organization fall short on their commitments.  But there are other bottlenecks as well that might obstruct the smooth purchasing process; it could be incomplete paperwork, lack of equipment, delay in transporting goods, etc.  It is essential for business organizations to overcome these bottlenecks first to keep the business up and running.   By streamlining the purchasing process, the business owner can resolve these issues and facilitate the smooth transition of business processes.  However, streamlining the purchasing process with the traditional method may not be as simple as it seems, especially when business is expanding.

The organization has to adopt a better approach that is counterproductive, intelligent, and fast. This buyer guide for purchasing software is intended to help business owners, inventory managers, and purchase managers to get a better understanding on purchasing software and discuss some important aspects to consider before buying the software. It further elaborates on how business can benefit from a robust purchasing software and some future trends that will further enhance its capabilities.     

What are the steps involved in the purchasing process?

Step 1) Purchase requisition:  A purchase requisition is a formal document informing managers or purchasing staff about the decision on purchasing goods or services so that they can initiate the process of purchasing the requested products or services.  The requisition will go through an approvals process whereby the authorized person will approve the request.

Step 2) Invite suppliers and evaluate bids: After the purchase requisition, the organization will inform suppliers about the suppliers' purchase requirements. If the suppliers have already worked for the organization, they can send a direct message; if not, then they can invite suppliers for the proposal. Once they receive the quotations from suppliers, they evaluate them for the best prices.

Step 3) Dispatching purchase orders:  A purchase order is dispatched to the supplier to inform them about the company's intent to purchase. The purchase order will list the product’s quantity required and the price being paid. It will also mention the terms and conditions that relate to the order.

Step 4) Advance shipment notice: The advanced shipment notice is sent to the company by the supplier.  It is a notification sent to the company about the upcoming delivery. It consists of information like quantity of items, date and time of the delivery, weight, type of packaging, etc.

Step 5) Receiving and checking goods:  On receiving the goods, the authorized person checks the goods to ensure that they match what was ordered and that there is no damage.

Step 6) Recording invoice:  At the time of product dispatch, the supplier generates an invoice. The invoice may be either sent attached to the goods or separately.

Step 7) Three-way matching:  Once the invoice is received, the organization confirms the payment is made for the ordered goods, and it does not pay twice for the same goods.  They conduct the three-way matching, which involves matching three documents- the purchase order, receiving report, and invoice.  Note that some businesses may not prefer using three-way matches for small or recurring purchases.

Step 8) Payment to the supplier:  After verifying goods and prices, the finance department will proceed with the supplier’s payment.

Some users often interchangeably use purchasing with procuring, but there is a difference between these two.  

What is the difference between purchasing and procuring?

Procurement: Procurement is an umbrella term that includes purchasing as one of its components. It is a multi-process stage that includes sourcing, negotiation, and selection of goods and services.  It delivers an end-to-end solution for all procuring related tasks and usually takes longer to complete. The procurement process is more focused on value than price.

Purchasing:  The purchasing process is a small subset of the broader procurement process. It includes activities like ordering, expediting, receiving, and fulfilling payment. Purchasing is a simple transaction when organizations pay for and receive goods or services. It is the process of how services and goods are ordered. The purchasing process is more focused on price than value.

Purchasing as a standalone or as a part of procurement is an important segment for business. However, many businesses are still far from identifying the purchasing process’s true potential due to underlying challenges.

What are the challenges in traditional purchasing methods?

  • Overspending: Overspending is the common scenario with the traditional purchasing method; it does not give a clear picture of the company’s requirement. Generally, the working staff place orders based on their personal estimation, which may sometimes go wrong, leading to excess order of goods and extra money.

  • Unnecessary delay: Manual approval of purchase requisition is a time-consuming process and may lead to unnecessary delay.  It is possible that the authorized person may not be available all the time; in such a situation, the purchasing department has to either wait or take the approval request to the next authorized person. The purchasing process often gets complicated when the approval process is not consistent.

  • Documentation: with a traditional process, documents are printed out and filed away to obtain signatures for approval purposes.  Managing approvals, purchase orders, and invoices this way could be costly and prone to errors.

  • Improper supplier management: The traditional purchasing method focuses more on fulfilling the business objective with suppliers’ services rather than building client-vendor relationships or supplier management. Not having a centralized supplier management system, the business may struggle to locate the right vendor when the need arises.

  • Human error: With the traditional purchasing method, human errors are inevitable. The error could be misplacing the supplier’s contract, sending the wrong quotation, or ordering the same item twice.  Without a proper purchasing order system, human errors cannot be tracked, and it could happen repetitively.

  • Risk mitigation: Risk mitigation is an important aspect of the purchasing process.  If the supplier is violating the business policy and if there is no way to track those risk factors, it could lead to a business downfall. 

  • Prolong market release: Delay in acquiring goods and improper supplier management can slow down the product release in the market.  It is not an ideal situation, especially when the business is surviving around stiff competitions.    

Can the purchasing process be automated? If so, to what level?

Yes, with the help of purchasing software, the purchasing process can be automated.  It is astonishing, but there are purchasing management software that can automate the entire purchasing process.  Once the purchasing workflow is fed to the purchasing automation software, it takes charge of the entire process.  The purchasing management software can automate the requisition approval, supplier profile management, order verification, and payment process. There is no need for partial manual control; everything could be done through automation.  The purchase order automation software can bring benefits to both large as well as a small business.  It allows users to eliminate the extra steps of the process that needlessly drag the purchasing process.

What is Purchasing Software?

The purchasing software is essentially a system that enables businesses to streamline the entire purchasing process efficiently. The advanced purchasing manager software may even help to automate ordering inventory, integrating with other software, and managing supplier contracts. Besides that, the purchasing system software can be used for;

  • Managing invoices and orders
  • Placing purchase orders
  • Manage a list of suppliers
  • Forecasting future spending
  • Updating inventory stock levels
  • Maintaining accurate records of purchases

The purchasing manager software can help organizations decide what inventory to purchase, how much quantity to buy, and when it needs to be purchased.

How can Purchasing Software benefit businesses?

  • Controls excess spending: Several times, businesses tend to overstock the resources without any proper estimate. This primarily can be to avoid lack of supplies, and somewhere in that effort, they fail to comply with the budget thresholds. Generally, it is difficult to get a perfect estimation of the purchasing budget, but with purchasing software, it is quite possible.  

  • Improves client-vendor relationship: The purchasing software allows users to match the items ordered and received.  If any discrepancies are found, they can quickly verify from which end the error was made and take the precautionary step before it gets worse. The purchase ordering software plays a bigger role in improving the vendor-client relationship.

  • Enhance transaction speed: Since the purchasing software simplifies the purchasing process, the business's transaction speed excels. The purchasing software eliminates all unnecessary activities and enables users to focus on valuable tasks.

  • Better document management: As the business expands, the number of vendors and trading partners in the process also increases, which adds more documentation like signing the contract, purchase orders, invoices, and so on. The purchasing software makes document management easy and quick by sharing the documents with the corresponding person. Some purchase order applications also operate on the cloud, which further empowers its efficiency, and allows users to store their documents from anywhere and access any time.

  • Access from any device: The purchasing software supports mobile devices, making it easy for business owners to access purchase-related queries from anywhere and get a full view of staff requirements in real-time.

  • Guided buying:  AI has taken the purchasing process to a new horizon with its “Guided Buying” ability. The buyer or seller simply prompts the purchasing software about their requirements, and AI will scan the company’s stock. Based on available stocks data, the AI-driven tools guide users to purchase the appropriate products or services from the preferred suppliers.

  • Support audit trail: The purchasing software supporting the "audit trail" feature allows viewing detailed audit trails in the system and extracts information as per the auditor's query.

  • Global purchasing process: There are purchase management systems that support multiple languages and currencies that allow a business owner to source goods easily from anywhere in the world. 

  • Automated purchasing: Most of the purchasing management software facilitate automated purchasing by routing documents to the right channel, and when the right approvals are made, the order is placed to the right vendor under the current contract terms.

Essential Features of Purchasing Software

  • Supplier management
  • Spend management
  • Requisition management
  • Mobile notifications alert
  • Purchase order generation
  • Generate Reports
  • Track vendor contract
  • Email orders to the suppliers directly
  • Order approval
  • Define access rights for user groups and roles
  • Block unauthorized use
  • Support charts, filters, and pivots for convenient analysis
  • Check the status of purchasing requisitions
  • Instant access to product catalog
  • Integration with accounting software

How efficient is a Purchasing Software?

Reports indicate that the market size of procurement software applications is likely to cross 6 billion U.S dollars by 2023. It means that more and more businesses are into automating the task related to purchasing, receiving, and paying for commercial goods. 

The purchasing software has speed up many complicated tasks for the organization, which initially demanded a lot of manpower and resources. It allows users to focus on an important task and transferring manual workload on the software. But that alone was not the reason why business owners are adopting the purchasing software. The purchase order management system has been upgraded to modern business trends; it is designed to improve the client-supplier relationship, track KPIs, visualize dynamic data, risk analysis, and mitigation. It provides users to tap on important metrics, which was not possible earlier. There are also web-based purchasing management tools or online purchasing software that gives the flexibility to process the purchasing on the go. 

The ability of purchasing software to cut unnecessary costs has attracted many business owners to invest in them for their organization. This adoption rate is likely to grow as the software is ready to embrace some ingenious technology for better performance. It is interesting to know what the future holds for purchasing software.

What trends can we see in the future purchasing process?

  • Predictive analytics: The purchasing software with predictive analytics would enable the business enterprise to have a broad view of the cost fluctuation, market demand, supplier risk, and so on. The purchase order software capabilities would further enhance with machine learning and artificial intelligence.

  • Improved Robotics Process Automation: Though automation is already used by some purchase order management software, there is immense scope in the purchasing process.  In the future, the RPA can be used for contract renewal, demand forecast, vendor selection, managing supplier’s risk, etc.

  • Enhanced OCR:  Optical Character Recognition, along with learning algorithms, can read unstructured documents such as bills of material, contract PDFs, pricing tables, and termination clauses. It will make it possible to extract important information from the document, which may otherwise take days or weeks.

  • Multi-functional 3D Printing: 3D printing enables rapid prototyping, and the organization can use them for producing low volume items.  It will eventually help them to eliminate some kinds of stocking items with on-demand productions.

  • Effective Wearables and IoT: The sensors and wearable may play a critical role in detecting, capturing, and recording physical data. These devices also allow audit tracking during site visits.

  • Blockchain:  There is a strong admiration for blockchain from supply chain management. Because the transaction occurs on a peer-to-peer network, the business owner can opt for automated payment without worrying about fraud.

What is the approximate cost of Purchasing Software?

The price of purchasing software depends on the number of users and how many purchase orders users want to generate.  The price also varies as some purchasing software comes bundled with other software solutions like CRM, warehouse management, supply chain management, procurement management, etc. Companies with a strict budget can choose purchasing software like Order MS with $0.75/month or Tradogram at $15/month.  Both tools also offer a free version and clearly qualifies as the Purchasing Software for Small Business.  For those who want slightly better features than basic versions, mid-range software like Precoro with a price range of $29/month, is an ideal option.  Businesses dealing with complex transactions can choose premium tools like Knowify with a price range of $54/month and Zahara with a price range of $65/month.

Interestingly, for a startup company or a beginner, the better option is to explore free and open source purchasing software.  

Why refer to GoodFirms’ list of top Purchasing Software?

GoodFirms is rated as one of the best review and rating sites for IT solutions that help various organizations streamline their business processes. It strengthens its associates by suggesting them with the best software system filtered through stringent review guidelines.  The platform has maintained transparency in sorting the software solutions in order to fulfill the consumer’s quest for a genuine product.

Do not miss to check the list of best purchasing software prepared by GoodFirms to fine-tune the purchasing process and minimize the product delivery time.

Frequently Asked Questions

  • What Is the Best Purchasing Software Available in the Market?

    The perfect purchasing software for another business may not be the best purchase order software for yours. The right purchasing system for your business offers all purchasing management tools to fulfill your industry and business needs, is easy-to-use, fits in your budget, and proves profitable with time. To select the best purchase order software tools, you can leverage GoodFirms’ list of the top purchasing software that details the features, reviews, and pricing of many reliable purchasing solutions. For best search based on your business type and specific requirements, filter the list on business size, features (needed), pricing model, deployment type, and more.

  • What Does a Purchasing Software Offer?

    A purchasing system typically covers extensive tools to automate and manage numerous purchasing and related functions for businesses, including audit trails, invoice processing, spend management, supplier management, sourcing management, purchase order management, request & quote, inventory management, compliance management, contract management, vendor management, and more. A reliable purchasing software must also enable easy integrations with other systems like accounting, ERP, CRM, etc. The software thus helps streamline the purchasing process, increase efficiency, and enhance profits for businesses.

  • What Factors Must Be Considered Before Investing in a Purchasing Software?

    The top purchasing management systems offer comprehensive automation tools that can enhance your business profits at a nominal cost. Before buying one, it is necessary to ensure that the chosen best purchase order software is the right fit for your business or feasible. The software must offer all the features needed to streamline the purchasing process management for your business. The software’s cost should fit in your budget, and the expected profits with its deployment must outweigh the costs. It must support scalability for business growth. It is also vital to confirm whether other companies in your industry have profitably leveraged the software.

    The purchasing system you choose must allow third-party integrations with your other existing systems; for example, purchasing software typically needs accounting integration. The software vendor must offer customizations as needed, need-based user training, and customer support.

  • How Much Does Purchasing Software Cost?

    Purchasing system vendors generally offer multiple plans or packages to suit businesses of different sizes. The advanced or higher-priced plans of purchasing software typically offer additional features and allow more users or orders. Some software vendors also provide customization as needed, at additional cost.

    It is possible to get reliable purchasing tools for less than $20 per month; for example, Flectra costs $9 per user per month, and Tradogram costs $18 per user per month for unlimited purchase orders. Top purchasing software that cost a bit higher include MRPeasy costs $49 per user per month, Knowify costs $54 per month, and Zahara costs $108 per month.

  • Are There Any Free Purchasing System Tools Available?

    Yes, there are free purchasing software solutions available for startups and businesses with budget constraints that cannot spend on costly solutions for purchasing process management; for example, Order MS offers a free version for 1 user, and Tradogram allows a free version covering 1 user and 10 purchase orders per month. Please refer to the GoodFirms blog on Best Free and Open Source Purchasing Software to find many more free purchasing tools.

  • Are Purchasing Systems Secure?

    The top purchasing software vendors typically ensure robust, multi-layer security features in their software solutions. Thus, it is essential to check the vendor’s market reputation and compare reviews, ratings, and feedback for different purchasing tools before buying one. For relevant insights, you may leverage the list of top purchasing software by GoodFirms. Besides, do confirm the security offerings related to data backup, data storage, data integrity, data sharing, encryption, and vulnerability scanning, with the vendor.

Resources for Purchasing Software