A purchase order (PO) represents a legal contract between a business and its suppliers for the purchase of goods and services. POs help to ensure that the right quantity of goods or services is delivered in a specified time frame and at the level of quality expected.
They also provide a framework for accurate inventory control because POs use a single number to link each stage of every transaction related to a company’s purchase spend. By implementing a user-friendly, smart and reliable online inventory control system you can achieve total control and transparency to monitor and track purchase orders as they move through the procurement lifecycle.
Online inventory control
POs fulfil an important inventory control function and suppliers use them to compare the original order to what was shipped. In instances of standing orders, it allows suppliers to plan for future orders they will need to fill. For the buyer it allows them to plan business’ activities and operations with the confidence that certain items will be delivered within a certain timeframe.
Significant cost savings, greater efficiency and more productive procurement activities result from the implementation of online inventory control. It connects all the dots between purchase requisitions, approved purchase orders and the numerous other documents related to a given purchase, including contract terms and conditions, pricing, vendor invoices and delivery documentation.
This online inventory control ensures that a business maintains accurate financial records, improving strategic spending and supplier management decisions to ensure that budgeting and forecasting are both based on total inventory spend.
The automated nature of online inventory control workflows, PO templates, hierarchy-based roles and approvals removes the repetitive manual tasks and potential for human error from the PO process. Every PO number is automatically linked and verified in real-time to all related documents. While automatic alerts notify users of potential problems, approval delays or any changes to payment terms.
Purchase order tracking
Today, most companies manage their purchasing systems, sales orders, invoicing and payment processes electronically. One of the many improvements this technology has brought about is the simplification of the purchase order tracking process. Eliminating unnecessary paperwork, making purchase order tracking more streamlined and easier for companies to keep track of the many stages of ordering and paying for the items their operations or consumers require.
With today’s online inventory control technology, the PO order is still referenced on all documentation using a PO number the same way it is in time-consuming manual processes.
Online inventory control software like Unleashed Software automatically enters, as a field on each piece of documentation, an electronic copy of each PO number and this is usually saved and associated with every stage of the order. If there is a need to look up details of the purchase order, it can be done in the order management, inventory control or purchasing system by referencing the PO number. This improves accuracy throughout the entire purchase order tracking process.
Technology has significantly improved the process of purchase order tracking and enables both customers and suppliers to streamline the entire procurement process. Systems easily integrate with accounting and eCommerce software, ERP and point of sale systems.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.