Many people admit that automation technology is not being used enough in the purchase order process. This is posing a huge problem since many are using a manual purchasing process. Not only are manual purchasing processes slow, but they are also error-prone. This can result in uncertainties in procurement, poor dealer relationships, and additional costs. Purchase order process automation helps balance these manual processing issues. Purchase order automation is Faster and more efficient. Purchase order automation can simplify your purchasing processes.
What is a purchase Order Process?
First, let us see what the purchase order process looks like. A purchase order is the authorized document that is sent from a buyer to a dealer to request an order of goods. The purchase order process is part of your overall procurement workflow. While the procurement workflow refers to the end-to-end process from ordering a purchase to order fulfillment to vendor processing, the acquisition order process starts once an employee creates a purchase petition for approval. The purchase order process can be as basic or as complicated as necessary, but it generally has the same flow.
What is the Purchase Order Process used for?
There are some of the ways that using purchase orders will benefit your business. It is used where there are constant streams of revenue and expenditure flowing through the finance departments, purchase orders are essential to ensure that there are no surprises when invoices come in. Purchase orders are a set in way of deciding on these expectations at both ends of the collection workflow, so the suppliers understand what they will be supplying and can prove that it is what was asked if there are any disputes. The purchase orders automation process demonstrates a healthy flow of orders and managed expenditure and is an excellent way to prove to auditors that your company is doing things the proper way.
Why you Should Automate your Purchase Order Process?
Simply, manual purchase orders are clunky. Not only are they naturally slow, as paperwork is filled out by hand, but holds in support can also hold up the entire workflow. On top of that, manual purchase order processing is inclined to error. Whether it is incorrect data entry or bad handwriting, mistakes slow everything down even further. Errors can also lead to duplicate or wrong purchases. These errors often result in extra costs that go toward producing more team hours to remedy these issues. Purchase order automation can streamline your purchase order system faster. This should enhance the efficacy and efficiency of your purchasing process. Automated purchase order software will race up repetitive tasks.
Below, we will look at a step-by-step approach to automate your purchase order process. Let us get started.
Step 1 – Create a PO template
Your first step is to complete the purchase order form. There are a few reasons why you need to get your Purchase Order form right. Convenience is the most prominent benefit here, as users spend less time documenting supplier details and the company address. A purchase order form includes all details needed to support and pay for the order when the moment comes. By automating this purchase order process, you can establish rules that need specific fields to be filled before the charge is approved, and include auto-fill so that dealer information and product details can be filled in automatically. A standardized form also ensures that details don’t change as they move through the different stages in the ordering process, like some kind of Purchase order process-based game of telephone. Every person that touches the record sees the same information, decreasing the likelihood that accounting enters a different record than the person who submitted the requisition. PO templates contain the following Company details, logo, point of contact, business address and phone number, Date the PO was created, Expected delivery date and ship-to address, Billing address, Vendor contact information, and Line totals, plus any discounts.
Step 2 – Design your workflow on the purchase order
Some organizations prefer to keep the purchase order workflow process simple, requiring a sign-off from a single procurement manager before it is sent to the vendor. Others design workflow orders as something a bit more complex, adding in rules, conditions, and multiple approvers. We get that some demands account for a huge part of your budget and that many individuals might be involved in the decision-making process. Stick to the essentials, so that you can move things through the pipeline quickly, with minimal back and forth involved. Some system allows you to set approval flows based on various roles. There are few designations, but you can set rules within each of these categories. These categories are Admin, and Team Member who can create Purchase Order process but has limited admission to the account. They can review the Purchase Order process they have created, as well as relevant projects or budgets, approvers are budget owners or those authorized to make purchasing decisions and can approve or reject incoming POs. The purchases method offers a dashboard view of all pending orders. Each line item fits with a budget, department, and the individual who placed the order.
Step 3 – Integrate with accounting software and other apps
With purchasing order process you can connect with various applications, offering a direct line between procurement and accounting. This is a huge advantage for both teams. One of our case studies is a good example of this. You can create your own set of triggers and actions that connect your procurement software to inventory management tools, project control apps, and more. The point is, that integrations open up more opportunities to break down data silos and gain an understanding of how ALL internal operations come back to the procurement team.
For instance, procurement can see when stock is running low, and they’ll need to set a new deal in motion to get the best price on raw materials.
That connectivity has tremendous implications for the entire supply chain; you will always know what orders are pending and which invoices are past due.
Step 4 – Check purchase order history
As we mentioned earlier, automating the purchase order process does more than you might imagine. The purchase order process can track spending against goals and forecasts, and identify methods to improve. From there, teams can make modifications and track the process again.
It also applies the groundwork for an amazing record-keeping system because you will keep your purchasing records electronically. This means the order is automatically factored into the business budget so businesses can get a clear sense of how much money goes in and out regularly. The Purchase order process teams must get used to their role as a strategic part of their organization, and access to records, purchasing data and allows them to focus their energy to negotiate favorable terms with vendors and determine possibilities to deliver the best potential value at the best possible price.
Step 5 – Generate PDF documents
Sometimes it is necessary to generate PDFs for the purchase order process. Vendors will want custom PDFs for their documents. Equally, you may want to save PDFs to Google Sheets for record-keeping. You can generate PDF documents with information from your workflow process.
While PDFs are manually editable, these documents will pull relevant data into the forms automatically. Calculations will occur automatically to reduce errors and accelerate completion.
Dynamic PDFs fully support electronic signatures to make permissions easier.
Step 6 – Integrate with SQL databases to auto-populate forms
To access the full capability of the automatic purchase order system/software, you need to connect your SQL database. With the Database Connector, forms will automatically pull information from your databases. Not only does this improve data entry significantly, but it also helps decrease data entry errors.
Step 7 – Create an automated audit trail
To avoid compliance issues, your audit trail should be correct, and complete at all times. The problem is that if you are updating your records manually, you may miss information, or add duplicate records. The purchase order automation process will automatically integrate with your record-keeping systems to keep your audit trail updated and correct.
Key benefits of purchase order system/software :
Automating purchase orders means a lot more than removing the paper PO for good. Approvals happen faster and the entire process suddenly seems a lot shorter.
Perhaps the biggest advantage linked to the purchase order process is the boost to your decision-making capabilities. You will now have access to insights and analytics that can inform your subsequent move by adding a standardized way for maintaining track of orders, suppliers, and products. Purchase order process automation helps in the reduction of manual processing issues. Whether it is better to budget planning for the next quarter, automation changes the game. You can think of all of those benefits apart from automating the Purchase Order process.
Now that you know how to automate the purchase order process, there’s no excuse for using manual purchasing processes. Purchase order automation can simplify your purchasing processes. Instead, improve efficiency, reduce errors, and cut out delays by automating the purchase order process.