It’s estimated that more than a fifth of all retail purchases will be made online this year. For retailers, this surge doesn’t just signal an opportunity to increase sales and revenue. It highlights the growing importance of their purchasing processes, given the number of purchase orders they need to place, track, and manage increases exponentially as demand for their products grows.
This rapid shift underscores the importance of efficient and agile purchasing processes, where Purchase Order (PO) software plays a pivotal role. In this blog, we’ll uncover the top five benefits of integrating Purchase Order software into your workflow. From heightened accuracy and cost savings to improved vendor relationships and data-driven insights, we’ll explore how you can revolutionize the way you manage and track your purchasing activities using purchase order software.
First, let’s clarify what a purchase order is and what purchase order software does.
What is a Purchase Order?
A purchase order (PO) is a formal document issued by a buyer to a seller, outlining the details of a purchase transaction. It specifies the products or services to be acquired, quantities, agreed-upon prices, delivery dates, payment terms, and other relevant information.
Getting ready to issue your first purchase or just want to optimize your PO document? Download Anvyl’s free purchase order template here.
What is Purchase Order Software?
Purchase order software is a technology that’s designed to streamline and automate the procurement process within businesses. It’s a crucial component of the purchasing workflow, enabling organizations to create, manage, and track purchase orders electronically.
Why Do I Need Purchase Order Software?
Purchase order software can help you improve your purchasing operations and overall business performance. Here are 5 key benefits of purchase order software.
1. Enhanced Accuracy and Reduced Errors
Purchase orders serve as binding agreements between a buyer and a supplier, outlining the terms and details of a transaction. Any errors or discrepancies in these documents can lead to delays, disputes, and even financial losses.
Purchase order software can significantly reduce the risk of human errors and inconsistencies, since it eliminates the need for manual data entry and paper-based processes. For example, PO technology automates the creation of POs, pulling information directly from a centralized database. This ensures that product names, quantities, pricing, and other details are accurate and consistent.
It also often provides standardized templates that include all the necessary fields, such as product descriptions, unit prices, and shipping information. These templates prevent omissions and inconsistencies, ensuring that each purchase order follows a structured format.
PO software also enhances accuracy and reduces errors by:
- Validating information: Many PO solutions like Anvyl’s have built-in validation mechanisms. This means that the software can cross-reference information against established data to identify any discrepancies. For instance, if a product code doesn’t match an existing inventory item, the software will flag the error for correction.
- Offering real-time updates: Changes to a purchase order — like adjustments to quantities, prices, or delivery dates — are instantly reflected in the system. This prevents confusion caused by outdated or mismatched information.
- Leaving audit trails: Purchase order software maintains a digital audit trail of all changes made to purchase orders, providing a historical record of modifications and approvals. This trail can be crucial for compliance, transparency, and resolving any disputes that may arise.
2. Streamlined Workflow and Efficiency
Efficiency is a cornerstone of any successful business, and optimizing the procurement process can lead to significant time and resource savings. Purchase order software offers a range of features that streamline the entire procurement cycle, from creating purchase orders to receiving goods and making payments.
For example, purchase order management software allows organizations to set up automated approval workflows. When a purchase order is created, it can be routed to the appropriate stakeholders for review and approval. This ensures that every purchase is authorized by the right individuals before being sent to suppliers, preventing unauthorized spending.
Additionally, PO tools enable faster communication between departments involved in the procurement process. Approvals and changes can be made digitally, eliminating the delays associated with physical paperwork and manual routing.
Furthermore, for recurring orders, purchase order software can store templates or previous purchase orders, making it easy to reorder items without starting from scratch. This saves time and ensures consistency across similar orders.
3. Cost Savings and Budget Control
Managing costs and adhering to budgets are critical aspects of effective financial management within any organization. Purchase order software plays a crucial role in promoting fiscal responsibility by providing tools and features that enable better cost control. These include:
- Centralized spending: Purchase order management tools centralize purchasing activities, providing a comprehensive view of all procurement-related expenses. This visibility allows organizations to monitor and analyze spending patterns across different departments, projects, or categories.
- Real-time tracking: Organizations can also track spending in real-time. This means that budget managers can instantly access information about the status of ongoing purchases, preventing surprises at the end of a budget period.
- Transparent communication: PO software like Anvyl intelligent purchase order management platform enhances transparency in the purchasing process. Budget holders and decision-makers have clear visibility into the items being purchased, their associated costs, and the rationale behind each purchase.
- Invoice matching: Anvyl intelligent PO system includes an invoice matching feature which helps users quickly reconcile payments. You can also use our solution to see where discrepancies appear between an invoice and a purchase, make adjustments to paperwork, and improve speed to payment by having all the information necessary for approvals in one place.
Anvyl also integrates with a number of finance platforms, including Intuit QuickBooks, Xero, Tipalti, and Sage, to help you keep orders, invoices and payments aligned. For more information on these integrations, click here.
4. Improved Supplier Relationships
Effective supplier management is key to establishing successful and mutually beneficial partnerships. Purchase order software can help brands foster stronger relationships with suppliers in many ways.
Firstly, purchase order technology helps facilitate clear and structured communication between buyers and suppliers. These tools centralize and streamline communication, meaning purchasing teams can stay informed of supplier responses and order updates in one place. Moreover, purchase order tools often automate supplier milestones and check-ins, making it easier to track progress, identify issues, and receive updates before, during, and after the production process.
Brooklinen, the luxury bedding company, used Anvyl’s centralized platform and built-in automations to significantly enhance supplier relationships. The company achieved a 95% increase in supplier engagement, and increased order volume by 162% over two years. They cited enhanced two-way communication with suppliers as a primary reason why they were able to do so.
5. Data-Driven Decision-Making
In today’s data-rich business landscape, the ability to extract actionable insights from information is a competitive advantage. Purchase order software provides a wealth of data that can be harnessed for informed decision-making across various aspects of procurement and business operations.
These include:
- Purchase trends: PO management software aggregates data on purchasing patterns over time. This data reveals which products or services are frequently ordered, their quantities, and their associated costs. Analyzing these trends can inform inventory management, demand forecasting, and strategic purchasing decisions.
- Supplier performance: You can track supplier performance metrics, such as on-time delivery rates and quality of goods received. These insights help evaluate the effectiveness of supplier relationships and enable informed decisions about continuing or renegotiating contracts.
- Negotiation strategy: Armed with historical purchasing data, organizations can approach negotiations with suppliers from a position of strength. Insights into past orders, pricing trends, and order volumes provide leverage in negotiating favorable terms and pricing agreements.
- Forecasting: Data from the software contributes to accurate demand forecasting. By understanding historical purchasing patterns, businesses can predict future demand more reliably, leading to optimized inventory management and supply chain operations. With 66% of businesses report being overstocked at present, the ability to accurately forecast demand and inventory needs is particularly important.
Strengthen Your Purchasing Process With Anvyl
Anvyl’s intelligent purchase order management platform is designed to save time, reduce manual entry and improve efficiency across your supply chain. Using Anvyl, brands can manage the entire PO process with one tool. This means you don’t have to shuffle between email, spreadsheets, and other tools to keep your POs on track. You can track and manage everything – from PO issuance through to delivery to warehouse – on one centralized platform.
We’re proud of the results our customers have achieved using our purchase order software. To learn more about how we can help you streamline your supply chain strategy and boost your purchasing process, contact our team today!
