Upon approval of the requisition, the purchase order can be effortlessly sent to the vendor through automated processes facilitated by purchase order management software. For those with a purchasing team, reviewing various requisitions becomes efficient for identifying potential cost-saving opportunities. The supplier quote module lets you swiftly gather quotes from different vendors, facilitating easy cost comparison. For instance, here’s an example of comparing the cost of servers from two different vendors. Once you have completed the quote process, you can convert the quote to a purchase order and issue the purchase order to the vendor. Here are a couple of ways ProcureDesk helps you manage the purchase order management lifecycle.
Related: How To Select A Simple Purchase Order Management Software For Your Business
No need to stress about converting purchase requisitions to purchase orders—automated purchase order creation has got you covered. This time-saving feature benefits those without a dedicated purchasing or buying team. Identify suppliers that accept purchase orders and let the system handle the rest. Below is an example of a purchase order automatically generated by ProcureDesk. You can customize the purchase order template to include additional fields.
Related: FREE Purchase Order Template Excel [Ready To Use]
Vendors often set a minimum order threshold for free delivery, and some offer tiered pricing, providing discounts for larger quantities on the same purchase order. To take advantage of these benefits, reviewing open purchase requisitions and considering merging them into a single purchase order is beneficial. This can optimize costs and maximize discounts. You can save delivery and cost of shipping by merging the purchase requisitions into a single order. The other thing to consider is negotiating free shipping with the vendor. The vendor might offer you free shipping if you have a higher purchase volume.
ProcureDesk enables you to monitor your order’s delivery status without visiting individual carrier websites. The vendor can electronically send the Advance Shipping Notice (ASN), or you can input the shipping information on their behalf. Here’s an example of how you can track the advanced shipping information: Once you have the tracking information, the system can send you an email notification as and when the status of the package changes.
Upon receiving the product, a supplier invoice follows. The Accounts Payable team can match the invoice and proceed with vendor payment. However, without a receipt for a purchase order, the AP team lacks confirmation of product receipt, requiring invoice approvals before payment. Therefore, it is crucial to generate receipts to communicate that the product has been received. Here’s an example of a receipt: You can create partial receipts and enter the serial number and asset tracking information. You can also track the expiration of items, for example, for different chemicals or other similar products. The above features give you a complete order management system.
Purchase orders are documents issued by a buyer to a seller. It outlines the details of the product or services the buyer wants. On the other hand, an invoice refers to a document that a seller issues to the buyer after the goods and services is delivered.
There are different types of purchase orders. Let’s quickly run through what they are and how they are used:
These are the most common types of purchase orders used in business transactions. Standard purchase orders specify details such as the quantity, description, and agreed-upon price of the products or services. They are typically issued for one-time purchases.
These purchase orders are created before the actual need for goods or services. Planned purchase orders help forecast and plan, allowing businesses to anticipate future requirements and ensure timely procurement.
Blanket purchase orders are used for multiple deliveries of goods or services over a specified period. Instead of issuing separate purchase orders for each delivery, a blanket purchase order consolidates multiple transactions into a single agreement. This streamlines the procurement process for recurring needs.
Contract purchase orders are used for long-term agreements with suppliers or vendors. These purchase orders establish a contractual relationship, often detailing terms, conditions, and pricing for an extended period. They provide a structured framework for ongoing procurement needs.
These purchase orders leverage electronic systems for the creation, approval, and tracking of purchase orders. By using digital tools and platforms, businesses can automate the procurement process, reducing paperwork, enhancing efficiency, and improving overall accuracy in managing purchase orders.
Although service and purchase orders are important in business transactions, both serve a different purpose and are typically associated with different types of transactions. Purchase orders are used for the procurement of goods and tangible products. A purchase order specifies the details of a purchase, including the quantity, description, unit price, and other terms related to the acquisition of physical items. On the other hand, service orders are used to procure services rather than physical products. A service order includes information about the services to be provided, such as the type of service, the scope of work, the agreed-upon rate or pricing structure, and any other relevant details about the service agreement.
We look forward to your feedback on how you drive the adoption of purchase orders within your company – leave a comment!
Published By ProcureDesk Categorized as ProcurementWhat you should do now
Whenever you’re ready… here are 4 ways we can help you scale your purchasing and Accounts payable process.
