Monthly Archives

July 2018

How vendor management solutions can help you better communicate with vendors and suppliers

Introducing Vendor Management Solutions – Your Hotline for Communicating with Vendors

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How you communicated with vendors and suppliers plays a huge role on the overall success of your business. As such, this process needs to be smooth, uninterrupted and able to lead to a good relationship between the two of you.

Unfortunately, miscommunication happens every day and it’s no different when it comes to your vendors. However, you can make this process better for both you and the vendor by using vendor management solutions.

What are Vendor Management Solutions and How to Choose the Best for Your Business?

Vendor management solutions (VMS) is a service or software that allows companies to better manage projects and communicate with their contractors. It serves three functions:

  1. Project management – helps with work coordination, tracking and assigning tasks.
  2. Payroll management – you’ll need to pay your vendors and contractors, naturally.
  3. Vendor communication – think of VMS as a hotline for communicating with vendors.

What VMS you are going to use depends on your needs, size and type of your business, type of vendors, contractors and a number of other things.

So how do you choose the right VMS? A simple Google search won’t be of much help here, unless you want to end up even more confused. Here are a few things you need to consider when choosing vendor management solutions:

  • Is it easy to deploy and use? 

Why have something that no one knows or can’t use? Having a VMS and not using it is pretty much the same as not having one. It just sits there.If you are going to use a VMS, be sure that your team leaders are not ignoring it and are really working with it.

Of course, it could be that the VMS in question simply requires too much training and additional equipment and is not really worth the effort as such. There’s a fine line to walk between making a few adjustments and completely having to overhaul your entire system for the sake of one vendor management solution.

  • Are your vendors equipped to use it?

Communication is a two-way street, so ask yourself, can my vendors use this? If they can’t, that VMS will be useless and you will need to look elsewhere.

  • Are your other systems compatible with it?

Vendor management solutions don’t work isolated from the rest of your business systems. There are plenty of things that you’ll need to integrate your VMS with, so be sure that you will be able to before you implement the VMS.

  • Vendor qualification and onboarding

You probably already have an established vendor qualification and onboarding process. Consider how the new VMS will work with it. Will you have to make any significant changes to this or can you basically “plug-and-play” it?

  • Does it comply with local regulations?

You also need to consider if the VMS adheres to the local regulations and industry standards. Specific industries will have their own requirements when it comes to vendor management solutions, so be sure you can step up.

  • How secure is it?

Hackers can get access, steal or destroy your vendor data just because you were careless and were using an unsecure VMS. Don’t be the fool that thinks this won’t happen to him. Play it safe and look for the VMS with the best possible security for the sake of your business, vendors and your mental health.


Communication with vendors is what leads to a good and long business partnership and you can ensure this with the help of a good VMS.

Let me know if you have any questions about vendor management solutions in the comments below and don’t forget to sign up for a free Purchase Order Plus trial.

What does an accounts payable process look like

Understanding an Accounts Payable Process and What it Involves

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An accounts payable process is not a new or an unknown thing for businesses. A lot of organizations use it, in fact, but that doesn’t mean they all approach it the same way. This process can be very different, depending on the company in question. Because of this, I think it’s important to delve a little into the nitty-gritty of what a typical AP process may involve in this article.

The 3 Usual Steps in an Accounts Payable Process

The simplest accounts payable process includes 3 steps.

  1. It starts when the AP department receives an invoice. The important thing here is for this process to be centralized. You can’t receive one invoice via email, the next through a courier and then the next one via fax an expect it to run smoothly
  2. Next, the someone from the accounts payable department needs to roll up their sleeves and get to work on the invoice. This can be the AP manager or a member of the department
  3. The invoice then gets introduced into the company’s accounting system and perhaps scanned in order to create a digital record of it.

This, however, is the most simplified accounts payable process possible and it often requires that an organization has an enterprise resource planning (ERP) system in place. In most cases, the AP process will be more or less complicated.

The more steps an accounts payable process has, the more chance you’ll have to slip somewhere. However, some of these steps may be necessary and unavoidable.

For instance, how are invoices validated to know they’re genuine and not fake, or that they’re not duplicates? Who is responsible for approving an invoice? Also, does the company approve and pay invoices automatically or does it have a specific process of doing so?

Why Use an Automated AP Process?

This is where you need to learn to balance automatic and manual AP process. For instance, an automatic accounts payable process will work well if the invoice came from a known and already approved source. After all, why bother checking it all over again?

On the other hand, for a new vendor, you may need to appoint an employee to decide whether to approve the invoice or not. But, this creates another problem. Who made the order? In a large company, tracking down the order to its source can be a difficult task and it involves a lot of back-and-forth.

An automated accounts payable process, that includes an ERP can start once the purchase order is given and an invoice matched to it. That way, a PO can be introduced automatically into the system.

This type of automated AP process has the following benefits:

  1. It saves money as it requires less people to work on accounts payables. Many companies don’t even have a separate accounts payable department, which means taking people away from other tasks. That’s not the case with automating AP.
  2. Improves and speeds up the payment cycles. As a result, the company can better optimize its cash flow strategy, avoid late payment fees and utilize early payment bonuses and rewards.
  3. Handles invoices better. While going through every invoice can be difficult with a manual AP, not to mention the chance for error such as paying twice for the same invoice is a lot greater, an automated accounts payable process makes this a lot smoother.

What does an accounts payable process looks like in your company? Let us know if you have any comments or questions below the article. Also, don’t forget that you can sign up to receive a free trial of our Purchase Order Plus software.

What is an accounts payable

An Introduction to Accounts Payable: What It is and What It Does?

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When buying goods for your company, you won’t always pay for those goods in advance, but will often receive an invoice from the vendor. You need to keep these invoices in check if you want to avoid double payment, being late on paying your suppliers and so on.  That is what the accounts payable is for.

An accounts payable, or trade payable, is only present in businesses that use an accrual accounting system. This type of accounting system means recording income and expenses as they happen and not when the cash changes hands. For example, an accrual would be an invoice received for the goods this month, but is due for payment next month. This will present a clear picture of the company in review, but has the downside of not always giving an accurate portrayal of the cash flow.

An opposite of the accrual accounting is cash-based accounting, which is used by businesses that have regular and instant cash dealings.

What is an Accounts Payable?

Simply put, an accounts payable is nothing more but a ledger that shows the invoices you still owe money for. These are short-term liabilities, meaning you need to pay them within a shorter period of time, up to a year, compared to long-term liabilities such as employee payrolls. These do not belong in the accounts payable.

You can record purchase orders, contracts, invoices from suppliers and agreements with vendors under accounts payable. When recording accounts payable, you should use double-entry bookkeeping, which means having two entries for every transaction in order to balance your books. One entry will increase the account and is credited and the other will decrease it and is debited.

The AP is usually recorded in the general ledger, under “current liabilities” and is credited when the invoice is received and debited when the bill is paid to the vendor.

Here is what the accounts payable typically contains:

  • The name of the creditor
  • Invoice number
  • Date of invoice receipt
  • Account number
  • Type of expense
  • Invoice payment deadline
  • Invoice status (paid, pending or past deadline)

Why is an Accounts Payable Useful?

Bookkeeping without an accounts payable can be overwhelming, so the AP allows the company to better track its finances. Moreover, the AP will:

  1. Help the company maintain its business relationship with creditors, vendors and suppliers by paying its invoices on time
  2. Prevent possible financial fraud due to bad bookkeeping
  3. Avoid overpayment as you can see the exact amount due for every invoice you have pending at the moment
  4. Help improve the company’s credit score. A business paying its debts on time will always be in more favorable light than one that is constantly late with payments.


Most importantly, however,  an accounts payable will show you if your company is profitable or not. If you keep having low cash at hand, but your AP is high, that means you owe more than you earn.

Are you using an accounts payable or have another system or keeping track of what you owe to creditors? Let us know what you think about this system in the comments below the article and don’t forget to sign up and try Purchase Order Plus for free to better manage your purchase orders.

best ERP systems for 2018

Top 7 ERP Systems to Use in 2018 and Beyond

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Your company may have many resources at its disposal. While this is usually  a good thing , sometimes it can be hard to keep track and manage them all. This is why you need to use a good enterprise resource planning or ERP system.  The problem, however, is often finding one that fits your company best. To make this decision a bit easier, here are the best 7 ERP systems you can use in 2018.

1. NetSuite ERP

Oracle’s NetSuite ERP is used by more than 40,000 companies, ranging from SMEs to large corporations. It can be found in a variety of industries. This cloud-based ERP solution allows you to automate and streamline both front office AND back office processes, including purchase order management, invoicing, billing, inventory management and financial management, among others.

NetSuite is not only an ERP system, but also a business management suite with applications for customer relationship management (CRM), e-commerce and finance, in addition to ERP.

2. SAP Business One

Managing the information flow between different businesses, especially if they are different in scale and size, are often daunting, especially for small business. SAP Business One, however, handles this task quite well. With it, businesses can much easier manage their resources.

SAP Business One allows you to manage sales, purchases, procurement, CRM, finance, as well as business intelligence reporting and has tools that will let you handle wholesale distribution, retail, machinery or consumer product with more ease.

3. Microsoft Dynamics AX

Microsoft Dynamics AX  is an ERP system that works both on premise and on the cloud and features multi-language, multi-currency capabilities. Of course, the ERP is with Microsoft’s other business applications, which is a big plus, not to mention that it’s relatively easy to customize and has good support.

4. BatchMaster ERP

BachMaster ERP is primarily made for businesses in the manufacturing industry. In particular those in the pharma, chemical and beverage industries. It’s main promise is that it enables organizations to handle their sales, distribution, purchasing and other tasks much faster, while at the same time giving them a clear view of their data.

5. FinancialForce ERP

Sometimes an organization will want to move from CRM to and ERP solution. Unfortunately, this is often not an easy task and there can be a number of problems along the way. FinancialForce ERP enables mid-market companies do that by aligning sales, finance, human resources and other apps and organizes them to be more visible, perform faster and flexible.

6. Odoo

Odoo is a cloud-based ERP solution that offers sales & project management in one place for organizations of all sizes. The software not only has a myriad of e-commerce, point-of-sale (POS) and MRP applications and functions, but is also capable of integrating the organization’s sales channels with inventory management.

7. Brightpearl

Few ERP systems can boast the sheer range of business processes that Brightpearl can handle in just one platform. This includes inventory, customer data, purchase orders, reports, accounting and more. Brightpearl also includes tools for cash flow, inventory, customer purchase behaviour and more, in real time. Thanks to Brightpearl, multi-channel retailers can have a reliable ERP system that allows them to better manage their retail and increase their profits.


Finding a good ERP can help your business grow, handle a variety of tasks and maximize profits. These 7 ERP systems here are our choice for the best ones to keep an eye on in 2018. Which other ERP systems would you recommend? Let us know in the comments below and don’t forget to sign up and try Purchase Order Plus for free.

How to write a PO cancelation letter

How to Properly Write a PO Cancelation Letter and Politely Let the Customer Know You’re Unable to Complete Their Order

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Canceling a customer’s purchase order isn’t really the best-case scenario, but sometimes you just have to do it. You may have to cancel a PO due to your organization’s inability to complete it on time, not having the required goods, or a suspicion you have about the customer and their PO. Whatever the reason, you need to let the customer know by sending them a PO cancelation letter.

What Should a PO Cancelation Letter Look Like?

Whatever the reason for the cancelation, a PO cancelation letter is not something you should use to “give the customer what for”. Be polite. Apologize for the inconvenience. Even if you don’t consider the cancelation to be your fault. Clearly state the reason (or reasons) why you can’t fulfill the purchase order.

Don’t forget to list the items on the order you are canceling. Make sure to also remind the customer about any action they need to do and provide a contact to reach you on with questions.

A PO cancelation letter should contain:

  • Customer’s company information (name, address…)
  • Name of the person taking purchase orders
  • Your company’s information
  • Name of the person in your company canceling the order (if you are canceling the PO, it’s your name)
  • Order number for the items you are canceling
  • Order placement date
  • What items are you canceling
  • What items you are not canceling (if for instance, you are able to only partially complete the order)
  • Description of the items you are canceling (quantity, size, inventory number, etc)
  • When the cancelation will take effect
  • Why you are canceling the order
  • A request for confirmation of the cancelation by the customer (usually in writing, but email is often acceptable)
  • Contact information that the customer can reach you on with any questions (email, phone number)
  • Copies of purchase orders, invoices and receipts used for the order.

That’s a lot to consider, so to make it clearer, here is an example of how a PO cancelation letter should look like.

PO Cancelation Letter Example


Name of your company

Company address

City, State, Zip Code

Company representative canceling the order



Name of customer’s company

Customer’s company address

City, State, Zip Code

Person responsible for taking orders


“Dear (insert name of the person responsible for taking purchase orders within the customer’s company):

I am writing to inform you that my company will have to cancel the purchase order NUMBER you placed on DATE for AMOUNT.

Unfortunately, due to time constraints, we are unable to complete your purchase order by the required date.

I apologize for any inconvenience. We are offering a REFUND within 7 working days, as per our agreement.

If you have any questions, please reach me at or phone number 000-123-4567.

Thank you for your understanding.

Kind regards,”


Your full name and signature

List of included documents (receipts, invoices, POs…)


Canceling a PO is not the end of the world. Sometimes, you just have to do it. If that’s the case, we hope this article can help you let your customer know.

Need help with  creating, approving or sending purchase orders? Try Purchase Order Plus for free.

Do you have any questions about PO cancelation letters and how to write them? Let us know in the comments below.