Purchase management is an important part of the production process in the manufacturing industry. If a business has improper purchase management systems, it can lead to several operational issues. Higher manufacturing costs, overstocking, stockouts, and weaker supplier relationships are some of them. Having an efficient purchase management process is the key to maintaining smooth operations and achieving your business goals.
With the right purchasing decisions, you can improve the supply chain and overall customer satisfaction. So, let’s go through the importance of purchase processes and a detailed comparison between the two best purchase order software: Odoo and TranZact.
Significance Of Purchasing Processes In Business Operations
Purchasing is considered the backbone of a business’s production process. It starts with purchasing raw materials, components, and services needed for production and delivering them on time. If you follow effective purchasing processes, it can help you reduce manufacturing costs while improving product quality.
Here are the top reasons why effective purchasing processes are important for your business’s growth:
- Inventory Management: With effective purchasing decisions like forecasting demands, storage costs, and ordering costs, you can make sure your inventory levels are optimized.
- Improved Cost Control: Bulk purchases with higher discounts can help you reduce manufacturing costs. Doing negotiations with suppliers can also minimize your production cost and sell them at a competitive price.
- Better Supplier Relationship: Treating your suppliers like partners can improve relationships with them. Better communication and faster response time can also lead to long-term reliability and business collaboration with your suppliers.
- Quality And Efficiency: Selecting the right suppliers and products while reducing delays can help you maintain high product quality. It also improves your efficiency in manufacturing those products.
Key Elements Of Purchase Management
For effective purchase management, there are certain key steps or elements, which include sourcing, order placement, payments, and more. Here are the key elements you need for effective purchase management in your manufacturing business:
1. Selecting A Reliable Supplier
Identifying and selecting a reliable supplier with quality products at lower prices is important for effective purchase management. The very first thing you do while selecting suppliers is to determine your business needs. Once that’s done, you look for suppliers who can fulfill those needs for products or materials at the best price.
2. Requisition Of Your Purchases
A purchase requisition is an internal document you can use to formally request the purchase of needed goods and services. In this document, you can mention purchasing needs and details, such as item descriptions, quantity, and budget.
3. Generating Purchase Order (POs)
A purchase order is an official document that you issue for a supplier. It includes the type, quantity, and agreed-upon price for your required service or product. As soon as your supplier accepts this document, it becomes a legally binding contract between both parties.
4. Product Receiving And Inspection
Obtaining raw materials on time is important for an effective purchase management system. During the process, you have to verify the quality of the raw material. Once you receive them, you have to inspect them for potential damages and document any form of errors, if necessary.
5. Invoice Approval And Payments
This helps you check if your supplier’s invoice is accurate and aligns with your purchase order. In this process, you have to check your purchase invoices and approval workflows to authorize and process payments.
Exploring Purchase Management Systems: Definition & Functionality
A purchase management system has tools for supplier management, purchase order creation, invoice processing, reporting, and more. Key functionalities of a purchase order system include:
- Automating repetitive tasks, such as purchase order creation, approval workflows, and payment processing.
- Providing a centralized database to store procurement-related information with easy access and management.
- Keeping track of supplier’s information, performance, and communication.
- Monitoring and controlling purchase budgets to prevent overspending in any department.
- Generating reports and analytics to provide you with insights into your purchase activities.
- Integrating with other business systems such as ERP, accounting, and inventory management.
Odoo Purchase Management Software
Odoo purchase management software is designed to help your business organize its procurement processes. It helps you keep track of your purchase agreements, purchase orders, and quotations. Odoo’s purchase management module helps you with better supplier sourcing, purchase requisition, and much more.
Here are some advantages of using Odoo’s purchase management software in your manufacturing company:
- It lets you create custom rules, compare product lines, and manage recurring orders.
- It lets you join all the important manufacturing processes to fit your production requirements.
- It helps you secure the best prices with alternative RFQs (Request For Quotes), compare product lines, and manage recurring orders with blanket orders.
- It provides features to create single or split vendor bills at any time and pay them based on the items you ordered or received.
- It automates bank reconciliation, manages orders and invoices, and easily shares data across departments.
- It is adaptable to all screen sizes and devices, allowing every employee and higher authorities to easily manage manufacturing information.
Despite all the features, Odoo has a few drawbacks as well. It has more than 40 integrated applications, like HRMS, Accounting, POs, Website Builder, etc. Having too many features cluttered can make it difficult to use.
TranZact Purchase Management Software
TranZact is a cloud-based software designed especially to simplify manufacturing for Indian SME manufacturers. This purchase management software also helps automate procurement processes and boost your purchasing decisions. Here are the quick reasons why you should choose the TranZact purchase management system.
- It simplifies all your approval processes while allowing permission to be routed through the key people within your company.
- It helps you with a real-time tracking feature, allowing you and your stakeholders to access all the important information in a place.
- It allows you to instantly manage and access the supplier database with order information while automating the purchase order processes.
- It improves data processing time, allowing approval to be routed automatically, and responds within seconds.
- It helps you with an automated reporting system that provides synchronized data on your tools.
- It helps you easily track purchase requisitions, making sure you buy the necessary raw materials on time to avoid manufacturing disruptions.
- It records all your transaction history, keeping an eye on your expenses.
- It lets you avoid misunderstandings during production.
The biggest advantage of TranZact’s purchase order management module is that it’s very easy to use. It’s designed to let you create your company’s profile with a few simple clicks and map your business processes. It allows your staff to create POs easily and manage historic POs at a centralized location.
Comparison Of Odoo And TranZact In Terms Of Key Features, User Experience, And Pricing
When comparing Odoo and TranZact, it's important to consider their key features, user experience, and pricing. Here's a side-by-side comparison of these two.
Key Features
Both Odoo and TranZact offer effective features to improve your business’s purchase management processes. Let’s have a look at the detailed comparison between Odoo and TranZact purchase management software below:
Odoo Purchase Management Software
Odoo offers a flexible and customizable purchase management system. It includes all the basic features, such as managing purchase orders, suppliers, and inventory. In addition, Odoo has advanced features, like tracking expenses, automating complex workflows, and handling purchase agreements.
It supports different currencies and can be accessed from mobile devices. Odoo can be easily integrated with many other applications, especially within its own ecosystem. This makes it a powerful tool for managing various business functions. However, it has a few drawbacks, like complexity in learning, higher costs, implementation time, and support quality.
TranZact Purchase Management Software
TranZact is great for frequent purchase management tasks like handling purchase orders, managing suppliers, and keeping track of inventory. It also helps you automate reordering when your stock is low. It makes it easy to request receipts from suppliers and provides useful reports on your purchases.
TranZact supports your business transactions in different currencies, which can be accessed remotely. It can integrate well with your accounting systems and allows you to set user permissions. There's also a vendor portal to make dealing with suppliers easier. It is designed mainly for small to medium-sized manufacturing. TranZact is a cloud-based solution, so you don't need to install it on your own servers.
User Experience Comparison
Odoo: It is known for its highly customizable interface. Various features and integration with other Odoo applications make it a popular choice for businesses of all sizes. However, Odoo offers too many integrated tools with its package, which can be confusing for some users.
TranZact: It is designed especially for Indian SME manufacturers. It offers a clean and straightforward interface that is easy to use. The guided setup process and customer support make it accessible to businesses without deep technical knowledge. TranZact also offers you the flexibility to choose on-demand features to help you make better purchasing decisions in no time.
Pricing Comparison
If it comes to pricing and implementation costs, take a look at this detailed comparison of their pricing:
Odoo Purchase Management Pricing
Odoo's purchase management pricing can be quite high compared to other software. It can affect your cost-cutting efforts within the manufacturing business. Have a look at the Odoo pricing plans.
- It offers a paid subscription starting at INR 1 Lakh per year per company for 10 users, which will cost you Rs.2073.44 per month.
- In Odoo, you must purchase all 72 apps, even if you just want the purchase management module.
- The implementation charges for Odoo are quite high. It is approximately 3x of a 1-year subscription.
- Additional monthly charges are applied to keep your systems running.
- Pricing may also change depending on the customer field number you use.
TranZact Purchase Management Pricing
TranZact offers flexible pricing plans that allow you to choose one that fits your business requirements. With TranZact, there are no usage-based charges, and you only pay for what you want. Have a look at these plans in detail:
- Free-of-cost Micro Plan: This plan comes with features like advanced lead management, inventory tracking, and 30 transactions/month.
- Small Plan: It is priced at Rs.3,999/month, with features like delivery and payment reminders, advanced lead management, batch tracking, WhatsApp/Tally/Zoho integration, etc.
- Medium Plan: It is priced at Rs. 9,999/month, with features like multi-level bills of material, e-invoicing, document approvals, Google Sheets MIS integration, etc. This plan allows up to 10 users to operate the software.
- Enterprise Plan: It is priced at Rs. 29,999/- per month with features like advanced business intelligence and reporting tools, easycomm integration, batch tracking (Barcode), etc. With this plan, at least 15 users (if not more) will be allowed to operate purchase order management software.
Factors To Consider When Making Purchasing Decisions For Software Solutions
Making purchasing decisions for your manufacturing industry requires a lot of consideration. You need to look for factors ranging from your business needs to total ownership costs and ease of use. Here are some important factors to consider before investing in the right purchase management software:
- Business goals
- Manufacturing needs
- Functionality and configuration
- Easy to use
- Positive user experience
- Vendor Choice
- Customer support
Make Your Purchasing Management Decision Easy With TranZact
Both Odoo and TranZact offer effective purchase management solutions. Odoo’s strength lies in its various features and integration capabilities with other Odoo apps. On the Other hand, TranZact excels in real-time analytics, easy interface, quick implementation, and 24*7 customer support, making it a strong choice for Indian SMEs.
TranZact has a notably lower implementation time of only 14 days and is done 100% online. With TranZact, you can access live chat and free lifetime support on all plans, including retraining at regular intervals. Choose TranZact today for a reliable and user-friendly solution to all your purchase management needs.
FAQs
1. What are the 5 steps of purchasing process?
5 steps of the purchasing process include:
- Identifying your business requirements
- Selecting and evaluating your suppliers
- Creating and submitting purchase orders
- Inspecting goods receipts
- Processing invoices and payments
2. What is purchase in Odoo?
Purchase in Odoo is the procurement process that is managed by its ERP system. It includes activities like supplier management, purchase order creation, and invoicing.
3. What is purchase in TranZact?
Purchase in TranZact refers to the procurement process managed inside the tool. It includes features like real-time analytics, automated status on Purchase Transactions, invoicing and billing, and improved collaborations.
4. What is purchase management software?
Purchase management software is a tool that helps you optimize your procurement processes through advanced technology. It usually includes activities like supplier management, purchase order creation, inventory management, invoicing, and reporting.
5. Which is better, Odoo or TranZact, as purchase management software?
As a purchasing and inventory software, TranZact is a better choice for Indian SMEs than Odoo. It has better real-time analytics, it improves collaborations, and is easy to use.
