10 Ways Using Purchase Orders Benefits Your Business

March 19th 2024 11:00:00 AM

When was the last time you thought about purchase orders? If you are like most business owners, you don’t give this type of business documentation much thought. It is far from a simple document, though. Please continue reading to discover more benefits of using them in your business. 

Benefits of Purchase Orders

A purchase order (PO) is crucial for tracking inventory and delivery dates, ensuring that your invoices are accurate, reducing the risk of human errors in company record-keeping, and more. The following are examples of the benefits of purchase orders for your business:

1. Improved Tracking

It can be challenging to keep track of purchase records and transactions using spreadsheets and paper records. Updating a digital system lets your team members easily track invoices and orders. It makes staying on top of inventory much more manageable and helps ensure you receive your orders on time. 

2. Increased Accuracy

Purchase orders are binding legal agreements between a buyer and a supplier. They set out the terms and conditions of a transaction. If a purchase order contains any discrepancies or errors, it can result in disputes, delays, or financial losses. 

3. Lower Risk of Human Error

Implementing purchase order software can reduce the risk of human errors since it eliminates the need for manual data entry. Purchase order technology automates creating POs; it pulls data directly from a central database to ensure that details like product names, pricing, quantities, etc., are consistent and accurate. 

4. Saves Time

When suppliers send invoices, including a reference to your company’s PO number, employees automatically know the bill is legitimate. Your accounting department team member can enter the invoice into the computer system referring to the original PO, ensuring that the delivery date is recorded, and stock levels are updated.

5. Reduces Likelihood of Duplicate Orders

As your business grows over time, it can be challenging to keep track of orders. One issue that may come up during this time is duplicate orders being forwarded to vendors. 

Purchase order software helps to reduce duplications and avoid this type of confusion. It creates a searchable record of every order, providing full visibility into company spending. 

6. Helps Remove Audit Barriers

Accurate purchase records leave a digital trail of each transaction in your company’s inventory. Keep the company purchase orders in one electronic file so they can be accessed easily by team members. They will need to access the records to file income taxes or if a bank or a potential investor wants to look at the company’s books. 

7. Assists in Budget Control

Budget control is a crucial reason a business would adopt purchase order approvals. Many companies have policies with strict spending limits for each team or department. A more senior manager must approve any purchases that exceed the stated limits.

Suppose your business still needs to have a formal approval process in place. In that case, employees may make purchases that exceed their group or department’s annual budget. Once your company puts PO approvals in place, team members must get approvals for purchases above a set amount. Teams and departments are more likely to stay within their allotted budgets if they seek a senior manager’s approval for large purchases. 

8. Improves Relationships with Suppliers

Purchase order software helps your vendors and suppliers communicate clearly with each other. The system allows your team to store information about vendors:

• Which ones are easy to work with
• The vendors that fill orders accurately
• The vendors that will offer a discount for paying early (or on Time)
• Which ones can be difficult to work with
• Which ones your business can count on to come through with extra orders when needed

The software system helps your team find the poor vendors early in your company’s relationship with them. Your team can order from the most reliable vendors, the most accessible to work with, etc. 

9. Provides Legal Protection for your Company

A purchase order is a legal document indicating the price and quantity of items your company has agreed to buy from the seller. Even in electronic form, the document protects your company by providing an enforceable record of precisely what was ordered. 

10. Improves your Company’s Inventory Management

Buying items is the first step in the inventory procurement process. When your team has a purchase order system that is easy to use, it helps with inventory management. 

Purchase orders can be used to track the products being delivered to your company. The products should be matched against the invoices to check for accuracy before payment approval. 

Scanco Sales Order to Purchase Order for Sage 300: Automate this Business Task

Scanco Sales Order to Purchase Order for Sage 300 (“Sales Order to Purchase Order”)allows your team to create a Sage 300 Purchase Order quickly and efficiently.

• Open a Sage 300 Sales 300 Sales Order.
• Choose a vendor and an item. 
• The conversion tool does the work to create a Purchase Order.

Automate Purchase Order Production

• Your sales team can create purchase orders and have customers sign them at the customer’s office or job site. 
• Integrates seamlessly with Sage 300
• Customizable and scalable to grow with your business
• Existing purchase orders can quickly be revised or canceled if necessary. 
• A PO number can be reused if the vendor or the supplier cancels an order. 
• View item costs from either the order entry or the purchase order setup 
• View unit cost of raw materials from Bill of Materials (BOM) and integrated circuit (IC) vendors
• Review audited reports, print the same, or revise POs as required

To discover more details about Scanco Sales Order to Purchase Order for Sage 300, contact us online, or call (330) 645-9959 to make an appointment with a Scanco Solutions Expert today. We can help you find the right solution for your company.