It’s Time to Ditch Your Purchase Order Template

Last updated on May 17th, 2022 at 04:29 pm

The traditional purchase order process is rife with costly errors. Are you searching for a purchase order template, hoping it will help you streamline your process?

The success of your operation depends on the purchase order (PO) method you use running smoothly. Effective PO management shows that suppliers and retailers effectively communicate, any changes to POs are quickly acknowledged, and shipments are correctly filled and arrive on time.

However, many businesses still manage POs manually, meaning that they’re sent over email, acknowledged over the phone or via email, and tracked in spreadsheets. These manual processes make it difficult to have full visibility into your supply chain, which causes missed PO acknowledgments, late shipments, and costly fees.

What’s the answer? Purchase order automation. And the larger your business, the more vital it is that you have a fully automated purchase order process in place. Keep reading to learn why it’s time to ditch your purchase order template for good.

What Is the Purchase Order Process?

If you want to buy products from one of your vendors, how do you begin the purchase order process? Typically, you’ll create a purchase order request that includes information related to your order. Then, you send the PO to your vendor and await approval.

Your vendor will receive the order, ask questions if you need to clarify any details, and check that they have the required items in stock.

If the vendor can fulfill the order, they’ll approve the PO. Now, the purchase order actually serves as a legal document that acts as a binding contract between you and the vendor.

Next, your vendor will prepare your order, accept and clear any funds you attached to the order, and send you the items. They’ll include your PO number on the packing slip so you can reconcile what you receive. 

When you receive your products, you’ll check the invoice that will outline the funds paid—and if there are any due. This is when you’d pay your remaining balance if there is one.

Aren’t Purchase Orders the Same Thing as Invoices?

Not really.

Invoices and purchase orders are two separate documents, but they’re both included in the PO process. You, the buyer, issue a purchase order to your vendor, the seller, to initiate a purchase. It’s the first step in the process. The seller will send a bill—called an invoice—to the buyer once the product is delivered. The invoice signifies the end of the PO process.

What Are the Elements of a Purchase Order?

Each of your purchase orders should include most of the following information:

  • Purchase order number (PO number)
  • Purchase order date
  • Buyer’s name and details (including contact information)
  • Seller’s name and details (including contact information)
  • Billing address
  • Item description, SKU, unit measure, quantity, price
  • Shipping carrier, method, and shipping terms
  • “Ship to” address
  • Expected delivery date
  • Payment terms and details

Purchase orders provide vendors with legal protection in case a buyer doesn’t move forward with the transaction. It also protects the buyer if the seller can’t deliver on time, delivers the wrong order, doesn’t have adequate stock, or the order is compromised.

Purchase Order Templates to Avoid

Before we talk about automating purchase orders, we will discuss why it’s so essential to avoid purchase order templates. When you first search for tips on creating purchase orders for your business, you’ll be hit with a lot of information—which is probably why many people are afraid of or confused by the process. 

Here are three manual, outdated methods to avoid when creating a purchase order for your business.

Manual Paperwork

Many POs are template files that only require filling in the correct order details and product information. If you’re handwriting this or printing it on paper, you’ll be repetitively filling out documents for hours each time you need to place orders.

Paper documents are harder to access if you need to look back on one for something, can be easily damaged, lost, or destroyed, and make it difficult to track spending. Not to mention you’ll need a lot of space to store paper documents (you’ll need to hang onto them for legal and record-keeping reasons).

Excel Sheets

Paper is bad enough, but Excel documents don’t make the process any easier. To use Excel effectively, you must understand Excel worksheets, workbooks, and formulas. It’s essential not to leave room for human error when creating purchase orders, as there is legal risk involved. 

Each time you receive an order, you still must manually enter the information in Excel. This process can take up a lot of valuable time, especially when you’re a business owner that has better things to do.

Word Purchase Order Templates

Yes, people still use Word templates. If you search (don’t do it!), you’ll find a ton of pre-made purchase order templates to choose from online. 

However, this isn’t any better than the other two methods we’ve discussed because you still have to input information manually. Having information stored in multiple Word documents makes it almost impossible to track your spending and inventory levels. You’ll need to extract this data from a separate system, adding another step to your PO process. This won’t save you any money either. 

So, what are you supposed to do if you can’t rely on a purchase order template or any of the methods above?

Turn to automated purchase order creation.

Automate Your Purchase Orders Instead of Using a Purchase Order Template

Manually creating purchase orders requires your employees to engage in a complex “back and forth” workflow. Working this way makes it easy to lose track of orders and suppliers—or lose other information. Even so, many companies are still generating POs semi-manually and using templates to complete the process. 

Without consistent procurement processes in place, you could be making costly purchasing mistakes. Businesses that embrace purchase order automation can reap several benefits from implementing a centralized order management system.

Automation solutions like Flxpoint empower you to eliminate the risk of manual errors in purchase orders. By using an all-in-one inventory and order management tool, you can save time, cut costs, and eliminate many of the disadvantages of POs.

Here are the benefits of purchase order automation:

Reducing Human Error

It doesn’t matter how much you trust yourself or your employees—even great employees make mistakes. If you’re entering information manually, errors are bound to happen. 

Save Time

Manual processing of purchase orders is repetitive, exhausting, and time-consuming. Using automation, you can even accelerate communication. If internal staff discuss procurement issues, there may be a lag of days—or weeks. If one email goes unanswered, the entire PO process is on stand-by. An automated purchase order system has built-in alerts and communication processes to keep al channels of communication open and running smoothly.

Save Money

With an automated system, you can store your vendors’ information in a single location, so you’ll eliminate time spent looking for the PO information. You can save even more time by customizing and automating the PO creation process by vendor.

No More Emails or Faxes

You can reduce the steps in your PO process by automating. Your purchase orders can be sent instantly and automatically saved to your system with a modern automated process.

Better Security

It’s easy to find sensitive information inside of a filing cabinet. Automated tools can keep your records safe—only those with the correct permissions can access them.

Improve Your Green Credentials

All companies should be seeking to “go green,” and automating your PO process is one way you can achieve this. Less paper means less money, but also less waste, which helps the environment. 

While purchase orders can seem like a waste of time or superfluous for smaller orders, they offer several benefits to large ecommerce stores with extensive orders. 

Whether you currently use purchase order templates or you want to integrate them into your toolkit, the ultimate goal should be to automate and optimize processes. This way, you can reap the benefits of purchase orders without spending excessive resources and time managing them.

Let Go of Your Purchase Order Template Today

By now, you should know that creating the perfect purchase order process is more than simply using a template and filling it out with the appropriate information.

You have to utilize the power of purchase order automation to keep your business error-free, organized, and cost-efficient. Adopting an automated PO process is the only way to succeed in a highly competitive online retail environment. 

The Flxpoint app has everything you need to generate a purchase order and automatically send it to your vendor, whether it’s a supplier, manufacturer, or dropshipper.

To learn more about how Flxpoint can simplify your purchase order process—and your ecommerce operation as a whole—talk with an expert.

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