Selecting a purchase order software for your company is an important decision and one that should not be taken lightly. There are so many PO softwares out there and each of them offers their own purchase order features. Individually, they all have their own advantages and disadvantages, some are better for small business, some for large ones, but in the end, it all boils down to what your business needs.
So, before you make the decision, be sure that what you are going to select has at least the majority of these 9 main purchase order features.
1. Vendor Database
Without a vendor database, it will be much harder for you to track different informations about the vendor. Most importantly, a vendor or supplier database will allow you to track vendor order histories and payment and service terms. Selecting the best vendor out of many is something you need to carefully consider and this will help you a lot in that decision.
2. Automated Purchase Orders
Automation is a purchase order feature that your employees will especially be happy about. Instead of creating every purchase order from scratch, this will allow them to automatically create purchase orders when certain conditions are met.
Automated or recurring purchase orders can lift a big burden from your team, which will no longer have to authorize every single PO.
3. Purchase Order Document Creation
This is probably the most important characteristic a PO software should have. Purchase order software should be able to create documentation that will enable seamless communication with your vendors and track procurements inside your company (who ordered, who approved and so on).
4. Purchase Order Status Tracking
Speaking of tracking, another important PO feature you need to consider is status tracking. This will help a number of your teams, including production, service and job teams, to better plan their activities for the future in preparation for the next purchase order. In addition, your sales team will also be able to better communicate with your customers about when they can expect to fulfill their orders.
5. Blanket Purchase Orders
Let’s say you need to make ongoing and repeated purchase orders. How would you do that? One of the purchase order features you need to keep in mind is blanket purchase orders. This is basically a document that authorizes repeated purchases until specific conditions have been met. For instance, a blanket PO can run until a certain dollar amount has been reached.
6. Matching Purchase Orders with Invoices
Whereas purchase orders are created by the buyer and delivered to the seller (vendor or supplier), invoices are in turn created by the seller and delivered to the buyer (you). One tells the vendor what goods, in what quantity and for what price (among other things) are expected to be delivered and by what date, while the other is more or less a reminder by the seller to the buyer to pay for the goods he has delivered.
As you can see, one can’t work without the other (although they are different, as you can read here: Purchase Order and Invoice: What Makes These Documents DIfferent?).
However, they need to match. Therefore, a purchase order software you are using should have a tool that allows this.
7. Supplier Lead Time Management
A good way to select the best supplier is to see what their lead time is. By capturing start times for POs (when they were initiated) and when the order was received, you can discover that vendor’s average lead times. This is an important decision as a vendor with a low average lead time will probably not be able to meet many of your demands and can often only slow you down.
8. Managing Approvals and Requisitions
It is vital to control your costs when it comes to purchase orders. However, this is often easier said than done, especially if the purchase order requisition and approval process is not clear in your company and all over the place. A good PO software will have a more refined and formalized purchase order approval, requisition and review process that will help you control your costs.
9. Receiving Management
Have the goods you’ve ordered been properly delivered, in quantity and quality you asked for? What if they have not been? What if your goods are late, in poor condition or not there at all? This is where you will be thankful if your PO software has a receiving management functionality. This will allow you to put workflows in place and resolve these issues.
No business decision is simple and the same goes for what PO software to use. Hopefully know that you know what 9 purchase order features to keep an eye on, this decision will be at least a bit easier.
Are there any more purchase order features that you think we should include? Let us know in the comments below and be sure to take our survey. Finally, if you haven’t already, sign up for early access for Purchase Order Plus to be the first to get updates about our software.