The purchase order process can be a challenge at the best of times. What should be a means of creating clarity and visibility in terms of controlling business costs often ends up as a time-consuming, error-prone and frustrating process. Email trails, tedious admin work and a fair share of confusion later, and your team must grapple to ascertain the true cost of bringing goods in.
ERP software can help you shore up any disarray your current purchase order process might be creating. As well as providing a system to help you buy better, ERP software can help you streamline your purchase order process so that you are fully aware of how much is it costing you to get stock to you.
In this article, we’ll investigate how you can begin improving your purchase order process through ERP software, and outline the benefits it can bring to your business.
What are the benefits of purchase order software?
Improved time saving and productivity
With all the automation and streamlining of processes that ERP software affords you, you and your team can save yourself an enormous amount of time that can be spent on other tasks.
That means no more manually updating spreadsheets, dealing with the fallout of human errors or any of the other processes that can end up taking up your team’s time. And in return, you’ll benefit from more effective use of resources, extra cost savings and the potential for better margins.
Access to accurate real-time information for faster procurement
Your Purchasing team have a lot to deal with when buying in stock; not only have they multiple stock files, but they have to deal with the increasing costs of duty freight and landed costs whilst managing rising container costs, etc. And with businesses only holding prices for five days or less as costs continue to fluctuate and increase, real-time visibility of purchasing costs is essential here.
ERP software makes having a full view of these costs in real time possible. This allows for greater decision making, curtails overspending early on, and helps you to absorb the rising costs of getting stock into your warehouse.
Greater access to relevant business information
An ERP system is your one-stop shop for all your information requirements and when it comes to your purchase order processes, it’s critical in helping you buy the right stock at the right time.
For the creation of purchase orders, you need features like order point recalculation which will help you maintain the minimum level of stock your business needs to prevent stock-outs and ensure order fulfilment.
What’s more, advanced replenishment rules based on trends can prompt you on what to order and take into account the probability of what’s going to happen in the future.
With clearer insights like these grounded in actual data, algorithms and rules, understanding what you should be ordering and when is a much simpler process.
Provision of automated reports
Reports are an essential part of the purchase order process. But they can also create headaches for all involved. Traditionally, they are manually intensive, prone to errors and can be slow to get key information to the most critical decision makers.
With modern ERP software, it is now easier than ever for the right people to receive the right information at the point of decision making. Features like predefined triggered alerts, schedule and exception reporting, user-specific dashboards, reports, data drills, or pivot tables ensure information is pushed out to you anytime, anywhere and in the format you desire.
Optimised inventory management
When your purchase order processes are integrated into your ERP software, it makes for much easier inventory management too. A centralised inventory database, updated in real time, lets your team know what can and can’t be fulfilled, what stock is available, and what they need to order.
What’s more, by keeping track of your sales, purchasing and logistics, an ERP system can help manage long-lead items, replenish inventory, and notify you of dwindling stock, so you stay on top of things without frantically trying to correct issues before they’re too late.
How to improve the purchase order process
Alongside ERP software, implementing the following best practices and strategies can help your make your purchase order processes as effective as possible…
Assess your existing processes
Your ERP software stands a better chance of success if you fully understand your existing purchase order process and how it’s used. If you’re still using a lot of manual processes, then your purchasing team will not be as efficient as they could be.
Taking a fine-tooth comb to your existing purchase order processes can help unearth bottlenecks which might be holding back their performance. Once you’ve identified these issues, you can begin to plan out how you’ll address things more effectively.
Improve authorisation processes
Manual processes often involve more red tape than is required. Whether it’s following a paper trail or a superfluous number of signatures to sign a single purchase order, inefficiencies like these can stop you from being as efficient as you could be.
One way of overcoming these issues is by refining the authorisation process and automating it. Only those whose authorisation is genuinely necessary should be required. For instance, if a junior team member attempts to purchase stock over a certain amount, a senior manager can be alerted for authorisation of the order before it is processed.
Create standardised guidelines
If silos are an issue, then miscommunication is sure to cause further problems. Following on from the above, make sure your teams are following the correct procedures by developing guidelines and rules around your purchase order process. Without them, your team may be following inefficient steps that slow down the purchase order process.
Whether it’s a handbook or an e-book, make sure your guidelines detail the entire process, outlining your business rules and security policies and stating exactly what should happen at every single step. By doing so, you’ll be ensuring everyone who’s involved follows the exact same procedures to minimise confusion within the purchasing department.
Need flexible, enterprise-wide solutions that can optimise your purchase order processes? Intact iQ offers effective ERP capabilities designed to future-proof entire businesses. Why not head to our dedicated page or get in touch with us today for more details?
