A building is as strong as its foundations, and as such a business is only as strong as its back-end processes. One of the most important yet least appreciated of these processes is a business’s PR/PO system. These are often taken for granted as they have just become part of the daily grind, yet these can have huge ramifications on the quality of a business’s goods and services, bottom line, and efficiency.
Before we get too deep into the problems faced by businesses when it comes to PR/PO, let’s take a look at what it is.
PR/PO: What Is It?
PR/PO or Purchase Request/Purchase Order systems are processes that facilitate the conversion of purchase requests into purchase orders. Purchase requests are internal company documents that are used to ask permission to buy goods or services for business use.
These orders are vetted by a higher-up in the company who reviews the document and checks if the item being purchased is needed, not already under order, or priced too high. Once the purchase request is approved, a purchase order is created and sent to an outside vendor to begin the purchase process.
PR/PO systems are usually unique to each business as they are based on their size, organizational hierarchy, and target industry. However, these systems can be grouped into either manual or automated processes.
Manual PR/PO Systems: What, Why, and When?
Manual PR/PO Systems have been around for many years and lots of companies have such systems in place to handle their purchasing.
These systems usually consist of a process where employees fill out a paper form with the details of their purchase request which is then manually transported and submitted to the relevant supervisor, these supervisors review the order, and depending on if it’s accepted or not, these orders are sent back to the requester for amendment or converted into a purchase order form and delivered to an outside vendor.
Just by reading this description, you can guess that this process is very time-consuming and potentially involves many rounds of amendments, so you might be wondering, why go through all this trouble in the first place?.
The answer is a resounding yes, even though PR/PO systems can be slow, they cannot be removed as business purchases are often costly and hold great liability for both vendors and buyers, these long vetting processes ensure that orders are proper and final before money changes hands and delivery begins.
Business-to-business vendors prefer or will outright only work with purchase orders as they are legally binding and protects both parties in case one of them breaches the terms set before the order was accepted.
Now that you know why it’s so important, you might wonder if there could be a better way to do PR/PO. The good news is that there is such a way and it helps lessen or outright eliminate the issues found within a manual purchase order system, and that system is automated PR/PO processes!
Automation is a great way to speed up the slowdowns in a typical manual purchasing process
Automated PR/PO: How It Works And Why It’s Better.
Speed is the main downside of a manual system and where an automated system shines, this is because all of the points that cause slowdowns like delivering the request to the reviewer, giving approval, and converting it into a purchase order is done via software that can do what would take a human worker multiple hours in milliseconds.
Automated PR/PO systems work using a central cloud-based platform as a hub for all requests/orders and are available to every employee via the internet. This means that anyone can check on the status of the request without physically asking the supervisor and the supervisor can review these requests straight from the platform on their smart device from anywhere thanks to remote approval features.
This is just scratching the surface of what automating PR/PO can offer as it also provides businesses with an easy-to-search database of all requests and orders made so that file management is a non-issue and analysing business spend is made simple thanks to the analytics made available by the software.
Some PR/PO software like ADAM also comes with access to a vast network of pre-vetted buyers and sellers within the platform so that sourcing for an order is easier and making the purchases is as simple as consumer online shopping.
With all these benefits, businesses don’t have a good reason to hang on to antiquated manual practices, and while it might make sense for a small business with few employees, it’s still a good idea to update the PR/PO system to keep up with potential growth.
Give Your Business The Best Chance To Succeed With Automated PR/PO
As technology progresses, the world has become smaller and people value speed and efficiency more and more. For businesses to stay competitive in such an environment they must take full advantage of the advancements in business technology. Adopting automated PR/PO systems can be the first step towards a modern connected business philosophy.
PR/PO stands for Purchase Requisition/Purchase Order
Purchase Requisitions are internal requests made to seek approval for the purchase of goods and services
These are orders for goods and services that sent to vendors as proof of request when buying something that is business to business
Procurement is the act of obtaining goods or services, typically for business purposes. Procurement is most commonly associated with businesses because companies need to solicit services or purchase goods.
E-procurement is the process of buying and selling supplies and services over the Internet. It differs from e-commerce because it uses a supplier’s closed system typically available only to registered users.