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Purchase Order Process

Organisations that manage purchases centrally, uniformly and with a strict digital purchase order process in place, have a greater level of control over the entire procurement process.  They can reduce costly errors, avoid mistakes and enhance processes.

Organisations with no formal purchase order process in place should consider these questions:

  • How does your organisation currently manage and approve purchases?
  • Can anyone place an order? 
  • Are purchases tracked?
  • How are documents managed?
  • Can you ensure your team only orders from approved suppliers?

If the answers to these questions present more problems than solutions, look at implementing an automated Purchase Order Process.

Don't have time to read everything now? Download and take away our full guide on what a Purchase Order Process is, how a digital system will help, as well as further information on automating a 3-way match of invoices, purchase orders and delivery notes.

Understanding A Purchase Order Process

What Is A Purchase Order Process?

A purchase order process is a way of ensuring goods are ordered, approved, received and paid for in a uniform way, as designed by the business.

Having a process in place not only ensures employees know how to order what they require from the right suppliers, but it also stops them from making an incorrect order or ordering something beyond their agreed budget.

Purchase Order Requisitions

wasted time on document approvalThe process should start with a Purchase Order Requisition, which is an internal document used by an employee to request goods or services.  Ideally this should be done using a digital form.

This document may go through a number of approvals with the purchasing or accounts department to check accuracy.  It could be approved, rejected or adjusted.

An approved purchase requisition then gives the go ahead to create a Purchase Order.

 

Purchase Orders

A purchase order acts as a binding contact between a customer and a supplier.  It agrees the price and the quantity of a product or service and is sent out by the customer.  It is accepted by the supplier who is now obliged to deliver the goods.

Need to understand more? Read our blog on Purchase Requisitions vs Purchase Orders.

Invoices

When the invoice is received it should match what's listed on the Purchase Order and the two documents are linked by the same reference or PO number.  Once the invoice is approved and / or delivery note confirmed, the supplier is paid. 

The steps of a purchase order process are important, but they needn't be manual, time consuming or documented on paper.  Automating the entire process will make it quicker, streamlined and more efficient, whilst reducing the cost and risk of the process.

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Purchase Order Automation

Successfully implementing a purchase order process relies on staff being engaged with the changes and seeing the potential benefits to them rather than it becoming.

With our automation software the administration of completing paper forms or spreadsheets, sending them for approval and any follow ups are removed and replaced with digital workflows.  The whole process is transparent and defined by pre-agreed rules.

A purchase order requisition form can be created in the Purchase Order System eliminating the need for a physical piece of paper or excel template.  Information such as suppliers, price, reason for purchase, department required, budget etc. is readily available to select from, as the information can be pulled from a separate database into the system. 

P2P

This starts the process digitally, saves time and reduces the chance for errors.  Documents don't need to be emailed and paper doesn't need to be passed around.

At this point a notification will be sent to a manager in purchasing or finance who can approve or reject the request from anywhere with an internet connection.  Once approved the purchase order is automatically sent to the supplier or back to the employee who created the PO, depending on the workflow.

Once the goods are received and the invoice stored in the software, it will be matched to the corresponding PO and if all details correlate, authorised for payment. 

Any discrepancies will be flagged to the appropriate person, with all documents linked together and stored digitally.  A fully automated Purchase to Pay system manages the entire process, reducing the chance of errors and making it easier to manage approvals.

Our software can automate a 3-way match of a purchase order, delivery note and invoice saving staff valuable time compared with manual processes.  Read our blog on 3 Way Matching In Accounts Payable for more information.

With an ever-growing number of business transactions, digitally managing your purchase order process is more important than ever.

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The Benefits Of A Purchase Order Process

  • Complete visibility from order request through to delivery
  • Better collaboration and communication as all information is centrally available
  • A more efficient and structured ordering process
  • Greater control over what can be ordered and by who
  • No more reliance on paper, emailed documents or excel templates
  • Integration with existing finance systems
  • Set limits on spending according to departmental budgets
  • Improved inventory management
  • A full audit trail
  • Remove errors, order duplication or overspend

Perfect Solutions For Your Business!

We create digital workflows to meet an organisation’s bespoke requirements. We can provide an electronic system to track, edit, store and manage all documents associated with any existing or new process.

Document Management

With DocuWare all your documents are stored and shared digitally.  It’s faster, more transparent, and more efficient than traditional paper-based methods.

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We create digital workflows to meet an organisation’s bespoke requirements. We can provide an electronic system to track, edit, store and manage all documents associated with any existing or new process.

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Our document scanning software gives you full control of the flow of information coming into your business. No more lost documents and no more bottlenecks.

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Digital Signatures

Digital signature technology improves the speed of auditing, provides smoother turnaround on contract completions, as well as reducing the associated costs.

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Data Capture

Accurate data capture is vital, and some organisations have very specific needs. Our products help extract data for those with information in unstructured formats.

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