Do you want to avoid all sorts of mess around your purchase orders created by poor administration? If your company still needs to implement the tracking of purchase orders, begin now to help your business scale.
Research has demonstrated that purchase order tracking not only improves performance of the organization but is also vital to effective procurement.
But here's the catch: if not done correctly, purchase order tracking can quickly become a nightmare, mainly if you still use outdated methods. Fear not, because we're here to share some tips with you that can be used to implement this year.
Streamline your business's procurement operations by reading this article! We'll cover features that your purchase order tracking must have along with tips to automate it.
Purchase order tracking is crucial for ensuring an effective procurement process. The purchase order is a vital document that guides buyers and sellers throughout the procurement process.
It is considered a legally binding document that provides critical inputs for inventory tracking software and protects both parties. Maintaining a purchase order log is essential for the procurement team to keep track of purchase orders efficiently.
Purchase order tracking involves monitoring a purchase order's entire lifecycle, starting with issuing the approved purchase order to the vendor. The purchase order is assigned a unique PO number, which helps to identify it throughout its lifecycle.
The procurement process includes the purchase order as a critical step. It comprises all the information about the order, the day and time of delivery, and the rules and regulations that must be followed when fulfilling the order. It's equally crucial to keep track of the progress of purchase orders.
Following are the pain points on the importance of tracking purchase order for the businesses:
1. Tracking the status of the PO throughout its lifecycle is crucial to ensure that it reaches the appropriate person for approval within the set deadlines, avoiding any delays or bottlenecks in the process.
2. By monitoring the purchase order, the procurement team can enhance transparency and gain better visibility into the organization's expenses.
3. A purchase order tracking system offers a centralized platform for accessing all POs and related information.
4. Keeping track of the changes made to PO data is essential as the information can vary during processing. Tracking these changes enables the procurement team to stay up-to-date with any modifications.
5. Real-time tracking of PO data changes and centralized access to PO data enhance compliance and audibility of the purchase order process.
6. The procurement team can save valuable time and effort by automating the creation, routing, and approval of purchase orders, which reduces delays and streamlines the entire process.
Purchase orders offer streamlined record-keeping and procurement benefits but can also introduce complexity. In the past, purchase orders were mainly paper-based, requiring businesses to create two copies: one for the supplier, typically sent by mail, and another for internal record keeping.
This paper-based system often led to confusion and disorder, with numerous copies of the same purchase order circulating within the company. As a result, keeping track of purchase orders and their corresponding documentation became a time-consuming and inefficient task for businesses.
Nevertheless, the emergence of digital purchase order systems has solved this issue by offering a more efficient and organized way to manage procurement processes through technology.
One of the pros of manual purchase order tracking methods such as Excel spreadsheets is that they are effortless. They are easy to use and understand, and data entry and validation are simple to perform, especially for businesses with a low volume of POs.
Another benefit is that working on Excel spreadsheets requires minimal employee training. In an excel purchase order tracking system, data accessibility is quick and easy.
One of the cons of manual purchase tracking methods is that there is a high likelihood of misplacement or damage to several copies of the purchase order required for manual processing. Keeping track of multiple copies, attaching them to the appropriate documents, and filing them can be a cumbersome process prone to mishandling.
Another disadvantage is that traditional purchase order tracking is handled by humans, which leads to a need for more accuracy and consistency in PO data, from data entry to validation to PO approval, as each person has their working methodology.
Traditional purchase order tracking must be standardized, making it difficult to comply with and audit. Manual purchase tracking workflows are prone to human bias and errors, resulting in poor compliance and audibility.
Finally, manual purchase tracking processes need to provide visibility into the purchase order status. The procurement team needs to learn about the reasons for delays and bottlenecks in the process due to the lack of visibility.
Based on the above discussion, the drawbacks of a manual purchase tracking system outweigh its advantages. Growing businesses should adopt more efficient purchase tracking methods to handle higher purchase orders.
Electronic tracking of purchase orders is possible in a few different ways. They consist of Microsoft Excel systems and specific programs for purchasing and inventory control.
Introduction of Excel to Purchase Order Tracking
One option for tracking purchase orders is to utilize Excel. Purchase procurement tracking Excel templates can be purchased or downloaded. The advantages of using Excel include minimal calculation errors, secure digital storage, and the ability to track and retrieve POs sent via email.
However, Excel POs have downsides, such as the risk of being sent to the wrong recipient, potential tampering, and the need to print for approval signatures. Excel also needs the automation and organization of dedicated PO applications, and its use is declining.
By updating existing inventory levels when goods are bought, or orders are received, inventory control can aid firms in maintaining ideal stock levels.
Additionally, they can offer perceptions of demand and inventory consumption, enabling companies to make data-driven choices regarding inventory management.
Further features of specific inventory administration systems include batch recording, scanning, and cloud accounting integration.
Introduction to Procurement Systems
Alternatively, businesses can use procurement systems, which are comprehensive applications that generate and track purchase orders, integrate with other methods, and handle all procurement administration tasks.
These systems automate a large portion of the PO tracking process and streamline workflows, with cloud-based options providing real-time tracking from any location and device. Additionally, procurement systems link POs with corresponding invoices, eliminating payment confusion.
The market is swamped with workflow automation software for automating important company operations. The capabilities offered by these solutions are geared towards enhancing the organization's productivity and efficiency. It's crucial to pick the ideal workflow automation program for your company's needs.
A tracking system for purchase orders must include the following features:
Creation Of Purchase Orders
Efficient Purchase Order (PO) creation is made possible with an automated system that collects data from the corresponding purchase requisition. It populates it onto a pre-designed PO template based on the company's requirements. A high-quality PO tracking software should enable the creation of purchase orders quickly and effortlessly.
Automated alerts and notifications are essential to prevent delays in PO approval. The software should automatically notify approvers and managers of approaching deadlines for PO approval, allowing them to take prompt action. The software can help ensure that the approval process runs smoothly and efficiently by issuing automated alerts.
Access to Cloud Base
Cloud-based access to PO software allows for seamless storage, access, and approval of POs from any location, making it easier for employees to work remotely.
Automated 3-Way Matching
An automated 3-way matching process ensures that the purchase requisition, PO, and invoice data match before the invoice is approved. The PO software should perform this matching process automatically to avoid errors and streamline the approval process.
Real-time updates on POs are crucial, as multiple employees in various locations modify the data. The software should consolidate all changes in real time and present a single, updated version of the PO. This feature allows for real-time reporting of the PO status to approvers and managers, helping to identify bottlenecks and derive actionable insights from reports.
Accesses Based on Roles
The procurement data must be handled securely, and the software should provide role-based access to data and permissions to modify and approve POs. This feature ensures that sensitive information is only available to authorized personnels.
Are you tired of looking for the ideal procurement solution to track your business's purchase orders? Don't worry; as per the features mentioned above, BusinessBid is an effective solution for tracking purchase orders, offering comprehensive features that help streamline the procurement process, ensuring that purchase orders are approved promptly and efficiently.
Based on its customer orientation, it allows users to create purchase orders using customizable templates that comply with the company's purchasing policies. Once a PO is made, the software automatically assigns it to the relevant department and initiates approval.
The real-time tracking of POs, providing updates on their status at every stage of the procurement process, enables managers to monitor the progress of POs and identify bottlenecks that may cause delays.
To ensure timely approval of POs, BusinessBid sends automated alerts and notifications to approvers and managers when a PO is ready for review or approval, eliminating the need for manual follow-ups and ensuring that POs are approved promptly.
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