Buy Order Process – Everything you must be aware of

Buy Order Process – Everything you must be aware of

In the modern world of work, the slowness of the Purchase Order Process Flow Chart can be a disaster for your company. Manual purchasing and old-fashioned systems hinder the process of purchasing purchase orders and cause more harm than good.

relying on a manual order procedure using spreadsheets and emails is similar to having an account at a bank account that has no ATM access. 

If you consider the ease with which ATMs operate in the banking world it’s hard to imagine waiting in line for an extended duration only to have the teller slip up in the course of completing a transaction that is simple.

Similar to that, the old-fashioned processes have no place in the current technological world. Digital technology makes old-fashioned processes work just like magic. 

It’s ideal for tedious and labor-intensive administrative tasks such as purchasing orders, approval of invoices, and many more.

In today’s technological world today, it’s smart to use a cloud-based system for purchasing orders. 

Before we get into the purchasing system to manage POs successfully we’ll take a look at the status of the purchase order management, and then figure out the major weaknesses.

What is the Purchase Order procedure?

In today’s technological world it is advisable to utilize cloud-based IT Solutions providers such as Kissflow to track purchase orders. 

Because process order will help you track your POs from beginning to end. Before we dive into the procuring system for a successful PO management Let’s look at the situation of purchasing order management, and then figure out its biggest flaws.

Process flow for purchasing an order

Below are the top commonly used steps in the process order

  1. Create an order for purchase
  2. Send multiple requests out for quotation(RFQ)
  3. Select and analyze a vendor
  4. Set up a meeting and then Send PO
  5. Receive products or services
  6. Pay and pay the invoice (3-Way Matching)
  7. Pay the invoice, and authorize the vendor.
  8. Record keeping
  9. Closing of purchase orders

Example:

To comprehend a PO process, think about this example from a real-life situation. Jeni is an HR Manager. She is on the lookout for new laptops to help onboard new hires. 

She makes a purchase order that auto-flips, and then becomes an order form with the help of purchasing software like Kissflow. 

The purchase order contains details about the number of laptops, their specifications, and the dates she’ll need the laptops for. Based on the order the Demand to Quote (RFQ) sends out to the suppliers for quotations. 

Based on the quotations received as well as their quality and the estimated delivery time A vendor is then selected. Following the choice of the vendor, the contract is signed and the purchase order is distributed. 

The vendor is able to deliver the laptops ordered, Jeni receives them and checks the laptops. 

Following this, Sathish, Accounts Manager from the Finance team, conducts a 3-way match using the Kissflow Procurement Cloud and then pays the vendor in case there aren’t any differences. 

The transaction’s records are secured, and the PO is now designated as closed.

The aches of purchasing manual processes

Manual purchase orders are expensive as well as inefficient and take a long time to manage. There are many documents to be processed for one purchase order.

The process of purchasing, storing, and then putting these through an approval loop while making sure that they don’t become damaged or lost on the way can be extremely tiring.

According to an APQC study, which was conducted in the last APQC study, the manual process of processing POs could cost companies as high as $506.52 in purchase orders.

A purchase order that is manually made:

  • Lacks visibility
  • Spikes are an expense for organizations.
  • The drags PO processing cycle
  • Depends on the intervention of humans
  • Are there process bottlenecks or compliance issues
  • It involves an endless cycle of emails and individuals

The advantages of a digital PO system

Here are six good reasons why every business should have an efficient procurement system that incorporates an order management system for purchase. 

Purchase order systems that are digital buy order management systems are able to:

  • Increase efficiency in managing POs and avoid losing or delayed POs
  • Enhance the speed of processing PO
  • Accelerate the approval process for purchase orders
  • Improve order management and stock management
  • Improve the relationship between the buyer and the vendor
  • Prevent procurement fraud

Summary

Say goodbye to unreadable handwriting, missing POs as well as endless data input. 

Cloud-based procurement software such as Kissflow transforms large amounts of paper documents into easily traceable digital forms that are saved securely in the cloud.

While the process of implementing a solution for procurement may appear to be simple as a solution for every problem related to purchasing, however, the actual process is extremely complex. 

This is why it’s crucial to implement certain best practices in purchasing to ensure your tool for procurement is operating in the manner it should.

The best procurement practices can help you fix your poor procurement process, increase efficiency, and provide higher ROI. 

While the idea of what purchasing order is might seem complicated, a closer look at the most commonly used best practices will help you make it clear one-for-all.

Muhammad Asif

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