As the name suggests, purchase order automation refers to the use of software to automate the processes involved in a purchase order. Normally, a paper purchase order warrants a lot of work as it needs to be passed around from person to person. With purchase order automation software, the order is digitized and automatically follows the template set by you to go to the appropriate departments. If you’re considering an automated purchase order system for your business, you should know how it can help you grow.
How is purchase order automation advantageous to your business?
A purchase order automation system makes it much easier for you to place orders. You can browse through the approved products and place an order. If your business routinely requires a product, you can set up the system to automatically send the order out whenever required. It streamlines redundant processes while ensuring that everything runs according to standard.
A purchase order automation system helps you cut down petty costs like ink, paper, and labor costs. You save on necessary labor expenses like the hours employees spend creating, filing, and moving purchase orders around and unnecessary costs like document searching and processing. As a bonus, it can also boost productivity by helping employees focus on their jobs.
3. Transparency in processes
With purchase order automation software, the entire process is laid out before your eyes. You won’t ever have to wonder who has an order, how far along it has reached, or if it’s been approved and invoiced. This will not only clear doubts and make decision-making easier, but also help you realize the most time-consuming processes so you can figure out how to speed them up.
4. Reduce human error
Human errors occur, regardless of how experienced your departments are. Major errors might require more time and effort dedicated to solving. But with purchase order automation software, the process can be up to 100% error-free.
5. Control spending and budgeting
You can select which employees get to make a purchase, and what they’re allowed to purchase, so you curb unnecessary expenditure. You can also track where your money is being utilized to form a more accurate budget.
6. Track vendors
A purchase order automation system lets you keep track of your vendors and suppliers. You can keep a detailed account of what each vendor sells, set up policies that detail what items can be ordered from a vendor, and figure out the best ones to work with by tracking the number of accurate orders completed on time.
7. Increased accountability
A purchase order automation system keeps track of approvals and expenses, which encourages employees to make fewer mistakes and prevents fraud.
How to successfully implement an automated purchase order system?
1. Start by mapping the purchase order process
Before you move to a new system, it’s important to determine what problems are plaguing your current system so you can tackle them before the automated system goes live. Once you figure out who is doing what task, be sure to explain to them how their role will change with the implementation.
2. Define purchase limits
Each member involved in the purchase order system should be aware of what they’re allowed to buy, the vendors they’re allowed to buy it from, and the quantities. Also, mention the order amount that warrants approval from a superior to keep the process smooth and fast.
3. Design a purchase order template
Create or choose from a selection of purchase order templates to keep them even and provide all the vital information in one go.
4. Set up vendor portals
Although it’s not mandatory to set up vendor portals, you most definitely should because they help streamline communication to form better collaborations, view POs and easily submit invoices, and reduce the margin for error for a smoother experience.
Use Kentro for your vendor management. An ERP like Kentro can be a game-changer for your business by giving you greater growth opportunities. If you’re an eCommerce business looking for an ERP, check out Kentro. We provide the best-in-class ERP solutions for eCommerce businesses to help you streamline your operations so your employees can focus on what they do best.