Is your business still relying on clunky spreadsheets and ancient systems to manage the purchase order process? If so, you’re potentially wasting valuable time and money that could be better spent helping your business grow.
There’s no getting around the fact that purchase order processes are complex. But with the help of modern technology and some savvy strategising, you can quickly cut down the time you spend on it.
Here are our top three tactics for turning an outdated PO processing system into something streamlined and simple.
1. Identify the pain points
You’ll want to list out all the steps that currently exist in your purchase order process flow. We’ve put together an infographic that outlines some of the most common steps. However, yours may vary depending on your industry and the scope of your business.
Now, go through each step of the process and jot down how time-consuming the steps are. Bear in mind some steps, like the actual delivery of goods, will take longer due to their nature.
Specifically, you’ll want to look for steps in the process that:
- Require manual review
- Create bottlenecks or slow down the process
- Involve excessive communication from multiple parties
- Are bogged down by multiple or conflicting software platforms
- Cause confusion for those involved in the process
- Take an inordinate amount of time compared to other steps.
Once you’ve done this, you should have a good idea of what’s slowing things down. You can use this overview to prioritise your next course of action.
2. Streamline communication
Communication is a big part of the purchase order process. If you find you’re frequently typing out the same message, or chasing multiple people for information, you could be wasting valuable time with each order.
One way to tackle this issue is by creating forms and templates for your communications. For example, providing your suppliers with quality control checklists that capture all the necessary information will save you from going back and forth to get the insights you need.
3. Automate your manual processes
If you’re still manually recording PO numbers or approving invoices, here’s some good news—technology can automate these repetitive tasks for you.
There are many high-quality purchase order management platforms to choose from, and it’s likely you’ll be able to fit one that meets your business needs. These platforms are also customisable, meaning you can create your own workflows to suit your style of working and your unique purchase order process.
How does purchase order software boost efficiency?
If you’ve never used purchase order management software before, the idea of switching over to a new system can be daunting. But once you begin to examine the benefits of using an automation platform, it’s easy to see the long-term benefits.
Let’s take a deeper look at some ways purchase order (PO) software can save you time and take the stress out of the process.
Automated requests and purchase orders
Instead of having to manually send out your purchase requests to all parties involved, you can use software to automatically notify individuals and teams once you’ve entered the new request in the system. Once all approvals are submitted, the software automatically triggers the purchase order—no more chasing each person for their approval.
Simplified three-way matching and order closing
When it comes to three-way matching, PO software can automatically verify that the supplier is paid the correct amount for the goods and services based on the PO number. Once the funds come through, your software can also automatically record the payment and close the order.
Stay in the loop with real-time reporting
It can be frustrating waiting to find out whether an order has been shipped or received. With purchase order automation platforms, you can keep a much closer eye on every step of the purchase order process. You won’t have to twiddle your thumbs until you receive a manual update from the supplier—many software platforms will send you automatic updates as your POs progress.
Automation means deeper insights
There’s another benefit to automating your purchase order process: You’ll receive deeper insights about everything from the PO requisition to the PO closure. Many of these platforms will provide you with data visuals that everyone in the purchase order process can use to make faster decisions.
Wrapping it up
Take a moment to consider how these benefits might impact your daily job. By implementing a new PO platform, how much time would you save, and what could you accomplish with the new hours in your day? Would automating your systems create a better relationship with you and your vendors? The best way to find out is to give one of the platforms a test drive—and fortunately, many of them offer free trials.