A Purchase Order (PO) is a commercial document issued by a buyer to a seller indicating types, quantities, and agreed prices for products or services. Purchase orders can be an essential part of enterprise resource planning (ERP) system orders. Companies use purchase orders for several reasons. Purchase orders allow buyers to communicate their intentions clearly and explicitly to sellers. They may also help a purchasing agent to manage incoming orders and pending orders.
Purchase Order Tracking
Purchase Order Tracking is important aspect of purchasing processes. It ensures that goods are received in time and in accurate quantity. It also ensures that you pay only once and in time for the goods that you purchase. In addition, you should be able to put controls like beyond a predefined amount, a PO needs approval, and define the approval process. You can also assign PO budget for each department or account so that it can be properly monitored and controlled.
Purchase Order Tracking provides a better visibility of your supply chain. You understand when your items are arriving, so you can plan your order fulfillment or manufacturing processes accordingly. It also helps you manage your vendors and source items in a competitive pricing.
An ability to track and easily report on all types of purchase orders, including blanket purchase orders, is a must to get full visibility on spend. It also enables finance departments to streamline the purchase order reconciliation and payable process. Visibility on the entire process, including an automated open purchase order report, will ensure time is saved and nothing is missed when invoicing.
Digital transformation is a key goal for many businesses and procurement transformation is a key part of that larger goal. An online PO system will track electronic purchase orders through the entire process. You don’t need a dedicated purchasing department to feel the benefits of digitization.
Purchase Order Approval
Purchase order approval is a common way of controlling expenses in a company. Usually, there are one or more than one approver is assigned to approve purchase orders. In some cases, a particular type of purchase order or a purchase order under certain values is auto approve. A purchase order approval system is a feature in a purchase order management system software, which allows you to configure approvers and approval conditions for purchase orders. Once it is configured, all purchase orders go through this approval workflow. And if workflow determines that approval is required then it will start the process by alerting 1st approver. If approval is not required, then PO is auto approved. Most of the purchase order systems designed for small businesses do not provide this feature. So, make sure to discuss this with your vendor before your start subscribing to a purchase order application.