Efficient software for purchase order management allows procurement teams to cut sourcing and procurement costs, improve vendor relationships, and ultimately the company’s bottom line.
To increase competitiveness and ease operations, businesses are turning to software for purchase order management for help, stepping away from manual purchase management practices.
But what exactly is purchase order software and how can it improve purchase order management? Let’s explore.
What is Purchase Order Software?
A purchase order (PO) is a business document generated by a buyer and delivered to a vendor that details the goods, raw materials, or services required and in what quantities.
Traditionally, purchase orders were drafted manually in Word documents or Excel spreadsheets, and when approved, faxed, emailed, or physically delivered to the vendor.
Today, thanks to technology, there exists purchase order software to replace this old way of making formal requests for goods and services.
Furthermore, this software for purchase order management is generally easy-to-use and intuitive. Contemporary solutions are also often cloud-based and designed to integrate easily into existing ERPs.
And speaking of utility, how exactly does software for purchase order management work?
How Software for Purchase Management Works
Firstly, it’s good to know that purchasing management is the process concerned with the procurement of goods and services from external vendors.
This involves the management of requisition orders, purchase order generation, receiving the goods, and reviewing them before inviting the vendor to bill the company.
As can be seen, there are numerous steps involved in purchase management and each one requires careful consideration in order to have the best sourcing and procuring experience.
Software for purchase management becomes the platform through which communication is carried out by internal parties as well as with external resources.
Integrating seamlessly into your ERP, software for purchase management features an intuitive dashboard into which teams may carry out the different purchase management functions.
The software keeps communication central, organizes requisitions and purchase orders, and helps you stay on top of things while also lending a hand in managing your relationships with various suppliers.
Now with an understanding of how software for purchase order management works, here are some of the top benefits of using it.
Benefits of Purchase Order Software
1. Strategic spend management
Procurement teams are always on the lookout for ways to keep sourcing costs at a minimum. They have to be strategic about spending.
One of the biggest advantages of switching to purchase order software is the cost-saving associated with processing individual POs.
As it stands, manual PO processing hovers around $506.52 for each purchase order. It doesn’t take a lot to see how this can compound very fast if you’re working with scores of suppliers. Thankfully, purchase order software significantly helps you reduce this processing fee.
2. Streamline purchase order creation
Having purchase order templates means once initial requisitions have been given the green light, purchase orders may be generated with speed.
Any errors can be amended quickly as well. And visibility is granted to all necessary stakeholders.
That’s not all but once purchase orders are fulfilled, they can also be converted into invoices almost immediately.
3. Easier storage and retrieval options
One of the major problems companies have faced for years now is the storage of documentation – think purchase orders, invoices, and contracts.
Fortunately, purchase order software has simplified this aspect tremendously. Moving everything to a central repository in the cloud or internal servers, it’s made life more manageable for procurement teams.
Retrieval of any document, even purchase orders from months or even years back can now be done with far fewer hassles. Plus, cloud storage is an environmentally friendly practice.
With benefits clear for us to see, what steps can you employ to choose the best software for purchase order management?
Choosing Software for Purchase Order Management
How do you know which software for purchase order management to choose? Here are some tips on what to look out for.
1. Consider who is the target company
It’s worth noting that software for purchase order management isn’t one-size-fits-all. This means there are solutions tailored for small businesses, medium enterprises, and large corporations.
This is often the reason the price points are different between solutions. If you’re a small business opt for solutions marketed for your company size.
2. Read reviews and go by reputation
Don’t overlook the important step of reading reviews as part of your due diligence process. In addition, some companies may be happy to let you know who some of their bigger clients are.
Some even post them on their own websites. If the software is used by well-known and reputable companies, then one may assume that the solutions provided are worth considering.
3. ERP integration and ease-of-use
What’s the learning curve associated with the software for purchase order management? Software isn’t created equal. This is one aspect that you will need to carefully consider as you don’t want to waste valuable employee time teaching them how to navigate their way around a new piece of software.
Also, factor in whether the software can easily assimilate and integrate into your existing enterprise resource planning system.
The Bottom Line
Software for purchase order management can assist procurement teams following requisition approval to easily generate purchase orders, get them approved, and send them out to vendors. It can boost visibility, cut back on sourcing costs, and improve overall procurement efficiency.
For reliable, robust, and innovative purchase order software solutions look no further than ProcurePort. Our software is trusted and used by businesses and organizations such as UNOPS, HUD.GOV, and conEdison.
To discuss purchase order software with a consultant or to schedule a demo of our solutions, contact us today.