Having a purchase order system in place is a powerful tool to manage your business. Here are the top benefits of using a PO system, along with the most popular purchase order software out there. Most businesses, at some point, will have to purchase products or services from other companies. Smaller businesses start these transactions with verbal agreements, but as the company grows or collaborates with a more high-profile partner, you will need more official documentation of the exchange of goods in the form of a purchase order.
A purchase order is a legally binding contract or document used by a business to procure products or services from a supplier. Purchase orders allow companies to track and manage spending and monitor the influx of goods such as raw materials and supplies.
Purchase orders are an important way to create and maintain accurate financial records but understanding how to use them can provide numerous benefits for your business, big or small.
Save Time
Having an excellent purchase order system in place helps you and your employees save time. Once the initial setup is complete, most systems are user-friendly and allow you to find products approved for purchase and place orders quickly. PO software will also enable you to create an autogenerating purchase order that automatically generates purchase orders streamlining your business. When orders arrive, you will be able to quickly check the invoice against the purchase order to ensure accuracy.
Performance and Budget Planning
Purchase orders allow you to look at your business financials quickly by reviewing the price and quantity fields for larger projects before they begin. You can also review records of purchases to allow you better plan knowing spending trends that have occurred in the past.
A purchase order software provides key insight into trends, market cycles and monitor company spending through providing detailed reports. These systems store all information in purchase orders that allows you to view detailed records and track budgets, receipts, invoices, and more.
Manage Unexpected Expenses
A purchase order system can be used as an early warning system for any unexpected expenses that may arise. Use purchase orders for most purchases. The system will produce a record for the expense as soon as the need arises and helps with planning and budgeting, especially with communication between departments.
Eliminate Mistakes
Purchase orders create records of all products and services ordered at what price and clearly communicate all purchase details. This documentation is essential to protect you and your business from mix-ups when ordering or misunderstandings. Having a record allows you to reference the order in the instance of a dispute.
Legal Protection
Purchase orders are a legal document protecting the prices and quantity of your orders. POs provide a legally enforceable record of transactions and protect you if you were charged incorrectly or provided an incorrect amount. POs also protect the seller, and many vendors and service providers prefer to work with purchase orders.
Controls and Tracks Spending
Purchase order systems allow you to control who has access to the system and who can place orders. The system will enable you to prevent any unauthorized spending without authorization.
With purchase order systems, it is easy to track where your money is going, and most systems provide updates in real-time, including email alerts set up to notify you of crucial details.
Improves Inventory Management
User-friendly purchase order systems usually have a built-in inventory management system. When you place an order, the product is easily trackable through quantities and keeps track of what you are expecting to arrive at your business. The PO system allows you to check for accuracy for orders received quickly.
Track Vendors
Your vendors are stored in purchase order systems and provide tools to track and sort the vendors you need. You can also assign policies to each vendor to indicate what your business should order products or services from each. You can easily monitor your relationships with your vendors through these programs, identify any issues, and solve problems before impacting your business.
Top Purchase Order Software and Systems
Purchase order software should provide you with all you need to help your business run smoothly. When it comes to purchase order management, you will need to evaluate your companies’ unique needs. Here are some of the top purchase ordering systems and software available.
Spends – Spendwise is a web-based application to optimize spending and manage your purchase orders quickly and efficiently. This software is built to help you reduce time and effort by tracking orders, managing bills, and run spend reports all on one platform.
Procurify – Procurify provides an easily customizable purchase order system that offers a unique look into the procurement process allowing for more reports, communication, and reconciliation. Procurify offers real-time data that keeps you informed at every step in the process. Quickly pull invoices and review purchases at any time.
Xero is an all-in-one accounting software that manages bookkeeping, purchase orders, document management, and invoicing. The online software is highly customizable to fit any business needs and branding.
This platform provides a user-friendly experience that can help businesses take control of their spending and purchases. In addition to an entire purchase order process, Coupa Procurement has inventory management, contract management, security against spending and fraudulent activities, and budgeting software. The purchase orders allow full transparency to all departments while allowing full administrative oversights.
Precoro prides itself on helping businesses automate their purchase order systems to help you save time, money, and resources. Precoro can be programmed to create and send purchase orders to suppliers automatically.
Beanworks offers insight into the spending and approval process to help businesses better manage their money. Beanworks sets up automated systems to quickly match purchase orders with invoices for easy payments and reconciliation. Users can quickly move through approvals and set up automation in the purchase order process.
