Using purchase orders (or POs) is standard at most businesses during the requisition and procurement stages of the operation. Although purchase orders are not technically contracts, the Uniform Commercial Code does consider it one. Regardless, purchase orders are usually accompanied by a legal document or another type of contract ensuring the payment is received in the amount for the bill of goods/services.
Purchase orders are a very useful and practical means of ordering services, goods, and raw materials. POs protect the company and the supplier from any potential risk, ultimately leading to improved operations. But they can be complicated at times. That’s why it’s sometimes necessary to set up a means to streamline your purchase orders. Here are five ways to accomplish that goal.
Tracking
Tracking your purchase orders is just as vital as ensuring all the information is correct on them. Tracking purchase orders and requisitions can be tough, especially for manual POs. Delays and communication problems happen when POs aren’t properly tracked. Increasing cost savings and making purchasing easier isn’t exactly easy when you can’t efficiently track your POs. The best workaround that solves tracking problems once and for all is using a procurement tracking solution.
Many requisition software packages offer this feature as part of the overall package. PO tracking systems let users see what’s happening with a purchase order/requisition in real-time. That means you can see if it’s been approved, note any issues, prevent inefficiencies, and take swift action in the event of an issue. It also improves storage and compliance (with contracts, regulations, and internal policies), so you don’t have to worry as much about the finer points of PO tracking.
Visibility
Visibility helps you get the most out of your existing processes. For purchase orders and requisitions, tracking items at the PO level gives you more leeway over knowing where your goods are in the delivery cycle. Demand is one of the most significant driving forces in running a business. Many managers and teams might spend 60% or more of their time trying to track down orders. That’s why the aforementioned tracking and visibility into purchase order management are so critical today.
Visibility into every cycle of the PO process—from production to delivery—your team should be able to see what’s happening at each stage. Using demand forecasting and purchase order management software to gain visibility is crucial to ensuring your purchase orders and requisitions are meeting standards while also being addressed in a timely manner. Visibility also helps prevent spending issues (including unauthorized, or rogue, spending) and guards against fraud.
Automation
The world is constantly evolving and changing. Technology plays a major role in these changes. As business and customer expectations change, so does the need for optimizing operations. Automating some procurement processes makes things more efficient, saves money, and empowers employees to get more work done. The key to automation is implementing purchase order management software.
With this kind of software, organizations are empowered to eschew traditional and manual methods for requisitioning goods or generating POs. Simplify your purchase requisitions with this kind of software solution, where requisitions with this kind of software solution, where organizations get the benefit of automatic routing defined by your parameters, GL code assignments, reporting, and visibility. In addition to streamlining workflow, procurement management lets you track POs, realize negotiated contract benefits, and receive keen insight from vendors about buying products.
Budgeting
Want keen insights into your budgeting while maintaining visibility and compliance with your procurement? Of course, you do! It goes without saying you need to understand your budget and how your requisitions affect it. Tracking and monitoring your POs/requisition forms with software can be beneficial.
But it can also help you avoid overspending. Because purchasing and requisitioning are directly tied into budgets, using budgeting software in conjunction with requisition software tools is a foregone conclusion. Real-time budgeting means you’re not waiting on profit and loss reports to see the impact your POs are having on the organization. This, in turn, validates spending and provides a benchmark for understanding where budgets may require adjustment down the line.
Guided Buying
Guided buying is critical for ensuring purchasing compliance and making more efficient use of company funds. It’s just another perk of a PO software solution. In guided buying, employees can make purchases via punchout catalogs ( basically just a catalog from one of the company’s approved suppliers) and check out through their organization’s software. Payments go out to each vendor while making it easier to get everything you need at once.
It’s like an open marketplace like Amazon.com but exclusively provides punchout catalogs from your approved suppliers and vendors. Teams can set up buying rules (approved, requires approval, unapproved, and so on) and employees can make small pre-approved purchases, send requisitions, or submit purchase orders. Guided buying saves time, reduces costs, provides better visibility—all while helping your company reduce fraud and third-party risk when it comes to procurement. As a procurement solution, guided buying is hard to beat.
