Purchasing Software Key Terms

Learn purchasing software key terms to maximize productivity in your business transactions

Learn purchasing software key terms before you determine which software solution best suits your own personal business needs. Decide what attributes you need in a program for your business to run smoothly, then find software that meets these requirements.

When you understand purchasing software key terms, it's easier for you to use the program itself. It can also help you communicate with others regarding analysis and solutions determined through the software usage.

 

Spend management

Used mostly for larger companies, spend management refers to the way companies optimize spending money to control the money spent. The process involves analyzing business transactions and cutting costs wherever possible. Purchasing software often does the analysis for business professionals.
Try: Ariba claims to be a recognized leader in the area of spend management. It offers spend management solutions to businesses internationally and offers programming for small businesses and large corporations.

Purchase orders

Purchasing software keeps track of purchase orders (PO), which are commercial documents sent out to a seller from a buyer. The document indicates the amount of products ordered, the type of product and the price for the products.
Try: On its website, the University of Alabama at Birmingham defines a purchase order. It lists elements one might find on a typical purchase order.

Invoice

An invoice is another term for a bill. It tells a customer how much they owe a company. Purchasing software keeps track of invoices and also prints them out.
Try: Docstoc offers a visual example of what an invoice looks like.

Payments

Purchasing software keeps track of payments from a client. Sometimes clients pay a bill in the full amount, and sometimes they pay part of the bill over a period of time until they completely pay the bill off. Purchasing software keeps track of all the transactions.
Try: Technical Services Associates details the way its software electronically keeps track of payments. It also describes how it saves costs for businesses by doing this.

Request for quotations

The term requests for quotations (RFQs) refers to the process in which a business invites suppliers to bid on client products or services. This bidding includes not only the pricing of an item, but also information such as payment terms or length of contract. Purchasing software keeps track of all the bids and quotes.
Try: Go to 4hb.com for an example of a request for quotation. It shows the general template that your purchasing software might use.

Requisitions

Purchasing software keeps track of requisitions, which are formal, written requests for products or services.
Try: Microsoft offers a visual image showing a requisition form similar to one found in purchasing software programs.

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