One of the biggest problems that procurement managers and supply chain executives are facing doesn’t lie in approving purchase orders, but in the time that it often takes them to create them. Creating a purchase order manually can be a tedious and repetitive process and this time the executives could use much better on some other tasks. That is why more and more companies are choosing to automate purchase orders and with good reason too.
In this article, we will give you five reasons why you too should stop creating POs manually and automate purchase orders.
1. Better Delivery Times
Thanks to automated purchase orders (and technology in general), procurement managers are much better able to answer any changes in their industry than they could ever if they were using traditional purchase orders. This is all because automated purchase orders allow them to adopt certain improvements in their PO process that their competition that doesn’t use it can’t follow.
Together, these improvements reflect positively in better delivery times for the company’s purchasing process.
2. Less Chance for Man-Made Errors
Manual purchasing orders, which tend to be repetitive, are prone to various mistakes. For instance, an employee could enter the wrong price or quantity in the PO. The risk for such a mistake only increases with the similarity of purchase orders an employee has to create.
However, organizations that choose to automate purchase orders don’t have to worry about making such errors as a computer system can not only create error-free POs, but also do them much faster than any human every could.
In turn, humans can turn to more creative tasks.
3. Better Efficiency
An automated purchase order system can also improves the organizations efficiency, at least as far as their supply chain goes. By automating most of the otherwise routine tasks that take up too much time to be done otherwise, such an automated purchase order system can greatly improve the efficiency of the organization that uses it and allow it to be more competitive on the market.
4. Better Inventory Management
In order to adequately respond to the strict requirements that the market puts before them, companies must always be one step ahead. Gone are the days when you could stock up a warehouse with your products and wait until you might need something from it.
Today, the game is won by those that are able to look ahead and anticipate what the market needs. Inventory management has become much more than neatly organizing boxes on shelves. An automated purchase order system allows businesses to streamline their inventory management and in doing so maintain high profit margins and low overheads.
5. Better Document Management
A traditional, paper purchasing order process usually invokes images of rows upon rows of folders and filing cabinets. It takes a true master to find something in these. Or someone with a lot of time on their hands and equal amount of patience.
On the other hand, organizations that automate purchase orders are able to take back their document management, speed up communications between different channels related to the purchasing process inside the company and outside (with suppliers) and review their purchase records with much more ease.
As you can see, there are several ways an automated PO can aid your company. These don’t just include the five we’ve listed here. The bottom line is that, in the ever-changing business environment of today, creating purchase orders the traditional, manual way, simply won’t cut it any more. Instead, you need to automate purchase orders in order to stay competitive.
Do you need help with your purchase orders? Purchase Order Plus is an add-on for Xero that allows your organization to streamline PO approval process on mobile. Join our email list to stay up to date on Purchase Order Plus and its updates.
Do you have any questions about how to automate purchase orders? Or would like to share another reason for doing so? Let us know in the comments below.