Slow order processing coupled with manual intervention is where your business takes a hit. The more you rely on manual things, the more difficulties you face in managing purchase orders (POs), halting your overall business growth.
Let’s be honest, it feels like you’re driving a car stuck in first gear, which neither helps you with faster approval nor drives sales. That’s why leveraging the use of tools and software makes sense when it comes to optimizing your purchase order management.
Unlike managing spreadsheets, you don’t need to waste time updating the sheet manually when using automated software for purchase management. This eventually leaves no room for human errors and helps your business stay well organized. Alright, let’s discuss more on what the purchase order management process is, and how to optimize it.
What is Purchase Order Management?
Purchase order management refers to generating and tracking the purchase order process until its fulfillment. Efficiently managing purchase orders helps you track POs while keeping accurate financial records. It plays a crucial role in your procurement process by ensuring suppliers are notified as soon as an order is placed and assisting in managing inventory levels.
In case you fail to place a PO request properly, it may lead to inventory problems or late deliveries. This is why you should meticulously manage purchase orders and track them until they are fulfilled. Therefore, considering an automated process to manage POs can make a real difference.
Purchase Order Management Process
There are four main components responsible for PO management. Let’s understand how they collectively handle the lifecycle of purchase orders.
1. Generate POs
Firstly, you need to place a request for acquiring goods from third-party vendors. Prepare a purchase order outlining the details of the product along with the quantity. You can use several tools and purchase order software like Moon Invoice to generate POs in a professional way. With professional and polished PO, businesses can eliminate communication gaps and provide more clarity on their requirements, reducing chances of back-and-forth.
2. Keep Digital Records
Once the PO is generated, record it digitally in cloud-based software rather than keeping paper copies in archive boxes. Recording purchase orders using automation software can help you track POs in minutes. You can check out if the supplier hasn’t responded to your request and take the necessary steps to fulfill the order. Also, you can generate a purchase order report to analyze the sales pattern and find the scope for improvement.
3. Review & Authorization
If a purchase order is ready, submit it to the procurement department for approval. Ask them to review the purchase order before moving further. Following the approval from the concerned person, you can send it to the supplier. Make sure you send an original PO copy to the supplier and save a duplicate copy in your records.
4. Track Supplier’s KPI
When the purchase order document is delivered to the supplier, you need to closely monitor their performance. The time taken for delivery and the quality of goods received can make or break your purchase order management. Therefore, it’s important to choose a supplier who adheres to the contract terms. In case you aren’t happy with their KPIs, you can reach out to other suppliers.
Why is Purchase Order Management Important?
A purchase order, either made online or on paper, is a legally binding document no matter if it was issued intentionally or mistakenly. Once approved by the supplier, they need to deliver goods. This may seem to be easier, but following your business growth, you may have numerous purchase orders. For that reason, purchase order management is so important.
Managing purchase orders efficiently can not only reduce costly errors but also aid in maintaining financial records. Additionally, purchase order management can help your team review the POs quickly and submit them to suppliers, allowing you to reduce fulfillment times.
Manage Purchase Orders With a Breeze
Get rid of manual processes that compromise your efficiency. Switch to Moon Invoice and make managing purchase orders a breeze.
How to Optimize the Purchase Order Management Process
Here are some best practices to implement to enhance your purchase order management process.
1. Prioritize Paperless POs
Since paper-based purchase orders often have readability issues and strong chances of misplacement, considering paperless purchase orders makes a real difference. They are not only easily accessible but also offer a crystal clear view of requirements, helping the supplier to deliver the items quickly. Moreover, when you generate an online purchase order, it is easier to keep financial records because neither you have to make duplicate copies on paper nor you need to spend extra time.
2. Invest in the Right Software
Getting the right software for purchase order management is as important as improving your business cash flows. These modern tools and software automate your PO management in such a way that you can deliver the product on time and drive customer satisfaction. For that, you need to adopt the right software like Moon Invoice that pays off. The automation software ensures you create a purchase order in a professional manner without any manual calculations.
3. Standardize the Approval Process
Work on enhancing your approval chains because most of the time approvals are the reason for lengthy delays. The purchase order you prepared might not be easy to understand and that’s where things start getting delayed. So, make sure you create a crystal clear purchase order copy that gets quickly approved and you can deliver it to the supplier or vendor. As a result, simplifying approval workflows can significantly improve your PO process.
How Moon Invoice Can Help You With Purchase Order Management
A sophisticated software Moon Invoice comprises cutting-edge features that will make your purchase order management a breeze. From readymade PO templates to hassle-free online sharing, Moon Invoice is the perfect PO generator that aligns with your business requirements. Notably, Moon Invoice provides multi-layered security alongside cloud storage, allowing you to manage purchase orders more efficiently.
That’s not all, Moon Invoice can also help you track purchase orders seamlessly, helping you get approvals and required items from suppliers as early as possible. Importantly, you don’t have to deal with poorly written purchase orders that are so difficult to record and track. The online purchase order generator, Moon Invoice, assists in fostering healthy relations with suppliers, ensuring you stay on top of your business.
Moon Invoice – Your Trustworthy Purchase Order Generator
Forget lengthy paperwork and switch to Moon Invoice to create a purchase order that doesn’t take too long to convert into an invoice.
Conclusion
A purchase order is an important document for all sizes of businesses. Your success in supplier order management hinges on how well you manage purchase orders. Since the conventional method of issuing paper-based POs has failed to meet expectations, considering a reliable purchase order generator for your business can really transform purchase order management.
With an advanced PO generator, Moon Invoice, you can not only get your purchase order ready in a fraction of the time but also make sure you fulfill them on time, increasing overall customer satisfaction. So, why wait? Let Moon Invoice do all the hard work for you. Try using it for 7 days at $0.
Frequently Asked Questions
Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. He holds a degree in engineering. Since 2011, Jayanti's expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners.
