A purchase order is an initial offer by a buyer to the seller, indicating the quantities, types, quality, and agreed prices for products or services. The purchase order is used to control spend, and provide an overview of all the requested supplies and their product details.
The Boston Consulting Group estimates that businesses gain a 10% cost reduction, and cut time spent by 30% by using an automated purchase system. However, despite the significance of purchase order systems, many enterprises are yet to adopt purchase order software, to help in their regular purchase and procurement processes.
In this post, we look at some of the purchase order software benefits;
1. Reduced Time on Procurement Processes
You can cut the time spent on procurement with a dedicated procurement system. An intuitively implemented purchase order software leads to less manual data entries. In addition, digital and secure approval processes are faster than manual ones.
Purchase order software guarantees a one-stop destination for all your purchase information, reducing time spent on confirming and validating purchase details. The time spent on invoice management and processing typically goes down. Implementing a dedicated purchase order software saves time on tracking commitments when conducting routine budget controls.
2. Getting Orders Right at the First Trial
Sending a purchase order is a legal and official offer to purchase particular products or services from a supplier. If the vendor accepts the offer, it usually forms a legally binding contract between you and your supplier. No contract exists until the supplier accepts the PO.
Purchase orders provide accurate documentation of what has been requested or ordered in case of a dispute. The purchase order details the purchase descriptions, costs, quantities, delivery instructions, discounts, and data of ordering. This detailed and comprehensive outline of products leaves fewer margins for error than a verbal request. As a business, you get your purchase orders right the first time and avoid unprecedented invoice disputes later after the settlement.
3. Good Quality Data
Using Word and Excel for your purchase requisition processes can be a great start but it will always be a vulnerable option in case you want to update your address changes, PO numbers, and other crucial information on the purchase order. A purchase order software will ensure that the correct purchase order numbers are registered and that all purchases utilize the same PO number.
4. Improved Procure-to-Pay Processes
With PO software, crucial information can be added beyond what is already provided to the supplier or vendor. The software allows users to add or include information related to the processing of invoices such as project, department, and account. Also, details about cost allocations or billing, and file attachments related to the PO (like quotes). With procurement software, all this information and files can be added as comments or fields related to the purchase order, which means you get all the relevant purchase information in one place.
Purchase order software can help you with budgeting processes while working on big projects. To generate accurate purchase orders, you’ll first need to calculate order quantities. By using the software, you can get a better idea of how much to invest in the project.
6. Real-time Cost Control
It takes a long time for an order to be executed, and the invoice to appear in the accounting system. A purchase order system sees all committed costs in one place. By using a purchase order system, you get full control of how much money is committed to a budget. This means that project managers can use the PO system to achieve real-time cost control on ongoing projects.
7. Access to History Data with a Digital Archive
A purchase order software provides a searchable archive providing information that helps your business in many ways. The purchase order software allows you to find previous orders, retrieve information about the goods ordered over a specific period, and retrieve reports on supplies related to a particular budget. Access to crucial historic data can help you control costs and optimize rates in inventory management processes.
8. Bolstering Business Engagements
A purchase order allows you to do business with local authorities and the government. Indeed, many governments and local authorities will only pay for invoices upon the receipt of an official purchase order. If you cannot do this, you are limiting yourself from doing business with top players. A business producing purchase orders means that it’s top of its cash flows and finances. It gains more confidence over enterprises without a PO software or system in place.
ProcurePort – Leading Partner for Customer-Deployed PO Software
There are other purchase order software benefits. These include;
- Internal approval – Approval of purchase orders via paper or email is time-consuming and strenuous. PO software provides a complete overview of which orders need confirmation, thus improving internal approval processes.
- Data security – The PO software extends digital access control, allowing you to determine who should have access to change, view, and approve data in the purchase system.
- Less dependence on IT staff – With procurement software in place, you are no longer dependent on internal IT experts. You are also no longer interested in knowing what is sent from the mailbox to the individuals. Everyone can find up-to-date information in the mailbox.
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You can also contact ProcurePort to enjoy these and many other purchases order software benefits.