Purchase Orders: Why Your Business Needs Them

Purchasing For Businesses

What factors do you consider before you buy something for yourself?
Things like “Do I really need it ?”, “Can I afford it ?”, “Are there other options?”, “Can I get it using a credit card?”.

Purchasing for your business follows along these same lines of thought as well, however this time it’s the businesses budget instead of your own money and purchases can have potentially far-reaching effects on its employees and the products or services the business offers.

This is why businesses need extra accountability, this is why businesses have Purchase Orders.

What Are Purchase Orders?

A Purchase Order (PO), in simple terms, is an official document issued by a business committing to pay the seller for the purchase of specific products or services to be delivered at an agreed date.

Each PO has a unique number associated with it that helps both buyer and seller track delivery and payment. A blanket PO is a commitment to buy products or services on an ongoing basis until a certain maximum is reached.

Why Purchase Orders?

“Does a company really need Purchase Orders? Surely it’s less of a headache for everyone if employees just go out and buy what they need?”

This might make sense at a glance but once we delve deeper it becomes apparent that Purchase Orders are the way to go.

For one, Purchase Orders have certain advantages over just outright buying something like we usually do for personal purchases. Firstly, Purchase Orders provide the ability to order goods without paying in advance. Purchase Orders are legally binding once accepted so that means that once both parties agree they have to fulfil their terms according to the timeline provided.

For vendors, this means they have to deliver the goods on time and in the agreed condition, for buyers, this means they have to complete payment by a certain date. The legally binding nature of the agreement allows vendors to start fulfilling orders before a payment is made, this allows buyers to be more flexible about their payment schedule and have a set time agreed upon for delivery.

Purchase Orders also allow for better negotiating between vendors and buyers as both parties must agree to the terms and conditions before the order is fulfilled.

This is why most B2B vendors make creating Purchase Orders a necessity as they are often moving larger volumes of products at risk to themselves, having the legal backing of the Purchase Order gives vendors more confidence to fulfil otherwise riskier purchases

Finally, Purchase Orders help keep track of the businesses purchasing. This is helpful when it comes to budgeting for the next quarter and inventory management. This, in turn, leads to a better investment of company resources and a clearer overview of how the company is performing financially.

It’s Not All Good News…

Purchase Orders have a lot of advantages, unfortunately, there cannot be rainbows without rain and there are some clouds over the manual purchasing process that makes some people hesitate.

The main problem with Purchase Orders is that they are time-consuming and cuts into employees work hours, this is because each order must go through a process that involves filling out the details, liaising with different departments to see if the order is duplicated and finally taking it out for approval.

This is because Purchase Orders cannot be sent out without approval, so employees must seek the relevant higher up with the authority to sign off on the order. They must look over the order for any clashes or discrepancies. If any are found then the order must be remade, starting the whole process all over again.

The worst part is that there are no real ways to avoid these issues with manual Purchase Orders as these time consuming components are also the essential steps needed to make sure the order is done correctly.

But all is not lost, there are ways to skip these problems altogether and make them a non-issue by making one simple change.

Digital Purchase Orders: The Light At the End Of The Tunnel

What if we told you there was a way to get the full benefits of having Purchase Orders without any of the downsides? What if it could save you money while also saving time for your employees? This might sound too good to be true, but eProcurement software has made it a reality.

eProcurement software like ADAM makes creating Purchase Orders a breeze by automating and simplifying various processes in the chain so that it’s faster and more efficient.

eProcurement software makes the usual long approval process take a few minutes at most with innovative remote approval and multiple tiers of approval. Furthermore, you can track the progress of the process so you know where the order is at all times.

This means that Purchase Orders that don’t get approved within a certain time are escalated to the next person on the approval chain until it gets approved. Furthermore, this can be done from anywhere with an internet connection as the Purchase Orders are stored in the cloud.

It’s not only purchasing that is made easier with eProcurement software, platforms like ADAM are highly integrative with accounting software like XERO for seamless data sharing between purchasing and finance departments. For a more in-depth look at how this is achieved check out ADAM’s integration solutions.

And that’s not all eProcurement software can do, they can also keep track of all Purchase Orders made and allow for easier access to analytics and statistics about purchasing patterns and allow for easy review of earlier Purchase Orders.

There is no real reason for a business to not switch to an eProcurment model with all these advantages.

A New Era Of Purchasing

In today’s competitive business climate, every second matters, Digital Purchase Orders gives you those precious Seconds so that your business can get a leg up on the competition. Switch to an eProcurement software and take your purchasing to the next level!


What is a Purchase Order?

A Purchase Order, in simple terms, is an official document issued by a business committing to pay the seller for the purchase of specific products or services to be delivered at an agreed date.

What is a Purchase Requistion?

A Purchase Requisition is a request for goods or services for company purposes that is sent out for approval, when approved a Purchase Order can be generated from it.

What is eProcurement?

E-procurement is the process of buying and selling supplies and services over the Internet. It differs from e-commerce in that it makes use of a supplier’s closed system typically available only to registered users.

What are Digital Purchase Orders?

Purchase Orders made using special software designed to process requisitions and purchases.

What are the advantages of Digital Purchase Orders?

Faster processing, multiple approval tiers, easily trackable, accessible from anywhere.

Previous Post
Next Post