How can purchase order automation software improve life for procurement teams?

The task of managing purchase orders is no small feat. It is demanding, requiring careful attention to detail and great interpersonal skills.

It can be even more complex when procurement teams have scores of vendors to handle and numerous purchase orders to issue each month.

This is why purchase order automation software has come as a welcome reprieve in the world of procurement. The software has been widely adopted because of its proficiency, expedited functionality, and practicality.

Let’s dive deep to learn more about purchase order automation software and its role in procurement.

What is Purchase Order Automation Software?

Firstly, what is a purchase order (PO)?

Leading industry think tank, the Chartered Institution of Procurement and Supply (CIPS) gives us a comprehensive definition of purchase order:

“…a purchase is a commercial document issued by a buyer to a seller confirming the goods or services required together with the quantity and specification needed.”

Traditionally, purchase orders were manually written out and issued to vendors, but with the advent of technology, procurement teams began creating digital purchase orders.

They would still send this digital POs via emails which in itself isn’t ideal because of the lack of visibility and the email loops that are created as the purchase order goes back and forth between the various stakeholders supposed to sign off.

Now, this is where purchase order automation software steps in.

Purchase order automation software is a technology that allows procurement teams and vendors to use a centralized platform to create, issue, and fulfill purchase orders.

The best purchase order automation software generates purchase requisitions and sends them to the relevant team member for approval. Once the requisition has been sanctioned, the purchase order software automatically forwards the purchase order to the supplier.

This automatic purchase requisition and purchase order process eliminates the need for constant oversight from the buyer’s procurement team, saving both time and money.

3 Best Reasons to Invest in Purchase Order Automation Software

Perhaps you’re wondering why you should invest in yet another piece of software? It’s a fair question and we’ll do our best to show you why it’s in your best interests to do so.

1. Reduce purchase order bottlenecks

If there is one pain point within procurement teams its bottlenecks when requisitions need to be approved. Often times the cause behind bottlenecks is simply too many issues demanding the attention of the responsible person in charge of signing off on requisitions.

A solution to helping them gain visibility of what needs their attention is of course purchase order automation software. Instead of having to wade through emails to clear requisitions, they’ll have easy access to requisitions and approvals will happen faster.

2. Cut back on operational expense

There are some tasks within procurement teams that shouldn’t consume as much time as they do. Generating purchase orders is one of them.

Take a moment to evaluate how much time your team is spending on creating purchase orders manually. You’ll be surprised. Time is money. 

By investing in purchase order automation software, purchase orders are generated automatically, saving teams the laborious efforts associated with manually creating POs.

It also makes life easier when it’s time to generate an invoice and send it to the accounts payable department.

Learn more about What is accounts payable? What is the process and what is included?

3. Promotes centralized communication

If you’re still stuck using emails to communicate with your vendors, you could be wasting up to 15.5 hours per week.

Forward-thinking procurement teams realize the need for a centralized communication platform and hence turn to ERPs with inbuilt purchase order automation software or ERPs that can easily integrate purchase order automation software. 

Choosing Appropriate Purchase Order Automation Software

With so many different types of purchase order automation software on the market, how do you go about selecting the correct one? What criteria can you use to narrow down your options? Here are three things to look out for:

(a) Purchase Order Software Integration

Does the PO software you plan on using integrate seamlessly into your existing enterprise resource planning (ERP) system? Integration is so critical as it can decrease the learning curve for employees who will be using the purchase order automation software.

(b) Purchase Order Scalability

There is model purchase order automation software that provides a free or near-free service allowing you to issue a fixed number of POs each month. These options are great for companies that clear relatively smaller POs. 

However, major enterprises may need to pay a premium for unlimited PO creation. So, do your homework on the perks associated with the purchase order automation software you are thinking of investing in.

(c) Purchase Order Software Ease of Use

How difficult is it to teach your procurement team to master this new software you want to adopt? Because purchase orders are routine for procurement teams, you don’t want to introduce software that’s going to slow down your procurement team. 

The whole point of integrating this software is to improve efforts. Therefore, do keep in mind the software’s ease of use and learning curve. 

Conclusion

There can be no doubt about the advantages that purchase order automation software brings to the purchase order process.

From increasing efficiency, improving visibility, and cutting down on the time taken to generate and send purchase orders to vendors, to fostering stronger relations with vendors, this is one software that procurement teams should not shy away from investing in.

If you’re looking for an intuitive and trusted procurement solution with a purchase order management system look no further than ProcurePort. Our clients include enterprises and organizations such as UNOPS, HUD.GOV, and conEdison.

To discuss procurement software with a consultant or to schedule a demo of our solutions, contact us today.

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