Purchase order tracking is criticalPurchase orders secure a legal contract for goods and services between a vendor and your business. It covers the risk vendors and suppliers take when filling orders without payment upfront which is typical of vendor/supplier agreements. It provides assurances to the vendor that you, as the buyer, have a system in place to actually pay for the order, as well as telling the vendor when they should expect payment. POs also fulfil an important inventory management function. They ensure you get the right number of inventory stock by comparing what was originally ordered to what was shipped in the time frame you specify, and at the level of quality you expect, so allows you to plan your business’s activities with a level of certainty. They also provide a framework for contract negotiation and strategic supplier management. POs provide assurances to the buyer that the goods and services will be purchased at a certain price. If the price changes, the purchase order should be amended or cancelled and a new PO issued, to make sure that the buyer has agreed to any substitutions or price changes. All of this associated documentation is essential for businesses to maintain accurate financial records, make intelligent decisions concerning strategic spending and supplier management. Mastering PO tracking is crucial to stay organised in a complex process.
How your business can track purchase ordersAlthough the PO tracking process can be complicated, the good news is technology has improved the process of PO tracking and enables customers and suppliers to streamline the procurement process. Better procurement systems will automate processes, which provides a solution for all of the problems that are inherent in manual PO tracking. Automated workflows, purchase order templates, and hierarchy-based roles and approvals smooth out the purchase order process—along with reducing human error and rogue spending. Every PO number will be automatically connected and verified preferably in real-time against all related documents. Better systems will have automatic alerts notifying users of potential problems, approval delays, or changes in payment terms, while contract particulars are automatically populated from the centralised document library. To master purchase order tracking is using the right automated procurement solution that streamlines and optimises procurement processes. What once was wasted time and resources spent on outdated or manual and paper processes can now be applied to strategic tasks that have much higher value for your business. In turn, keeping your business and inventory stock organised, generating greater efficiency and significant cost reductions.
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.