A purchase order (PO) is a commercial document that a seller issues to a buyer, outlining the type and quantity of products or services that the buyer has agreed to buy at a particular price point.
Purchase orders give buyers the ability to vividly communicate their intentions to sellers.
It is also a legally binding document between the buyer and the seller. A purchase order protects the seller in case the buyer refuses to pay for the goods and services.
Purchase order processing begins when the purchaser creates a purchase requisition and sends the document to the procurement department for review and approval.
Once the procurement department approves the purchase requisition, it then goes ahead to issue a purchase order to the vendor to examine the prices and quantity of goods or services, as well as the terms and conditions.
When the purchase order is approved, the vendor prepares the goods or services to be delivered to the purchaser. The whole process is completed when the purchaser remits payment.
Unfortunately, one of the major obstacles that many businesses face in the purchasing cycle is getting purchase order approval. This is because the manual routing and paper shuffling are slow and error-prone.
Purchase order automation can convert that manual process into a fast and efficient automated system, making the purchase order process streamlined.
Efficiency is very critical to the success of any business in today’s business world.
Automating your purchase order processes allow you to complete your orders on time.
Easily save all the processes and configurations that you may need in the future to make an order, which will lead to a seamless execution of purchase orders.
While the manual system of the purchase order will expose your business to errors which may lead to financial losses, an automated purchase order system makes it easier for you to manage your cash flow.
The reminder feature enables you to make payments on time by making sure that you don’t miss any due payments. And this can go a long way in enhancing your reputation and the relationship that you have with your suppliers.
With an automated system, perusing boatloads of files just to find the information that you need becomes a thing of the past.
The system stores all your data and files in the cloud, where it will be safe and seamlessly easy for you to locate.
Also, this makes your document accessible from anywhere around the world.
Additionally, you can access the history and review records of your supplier with a single click, thus speeding up communication and the whole transaction process.
An automated purchase order system allows you to see and keep track of important events in your PO process such as the purchase requisitions that have been approved or rejected, and which purchase orders have been sent.
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