What is Purchase Order Automation
Updated: Mar 22, 2022
Purchase Order Automation (POA) is the process of utilizing software or a coding language to create efficiencies within the purchase order process through automation. This means that the purchase order process can action aspects such as automatically sending purchase requisitions to the correct staff member for approval. The process can then monitor the state of approval, and once approved, can automatically send the purchase order documentation to the vendor. This can significantly streamline the process, and eliminate the need for a potentially slow and monotonous traditional paper purchase order setup.
A Purchase Order Automation setup can automatically link with your ERP system, and allow the supplier to acknowledge purchase orders and therefore automatically convert them into invoices which will also automatically integrate with the accounting system.
The key here is a fully universal integration, and the automation does not stop at the core part of the purchase order process. A truly beneficial automation setup will automate the core process, but also integrate that process with the other integral processes which link to it within the wider business.
How Can Purchase Order Automation Benefit you?
It can be difficult to move away from a long-standing process within a business. Especially if there isn’t anything drastically wrong with the process for the business as a whole. There’s the saying “if it isn’t broken, don’t fix it”. However, in this case, there are vast benefits to improving something which isn’t factually broken.
Reduction in Human Error
One of the biggest problems in businesses is that human errors do happen. It is something that as business owners we must accept as a reality of life. However, while they cannot be eliminated in their entirety, the risk can be significantly reduced.
Purchase orders are legally binding, and therefore any errors in them can be incredibly costly to a business. So, focussing on a reduction in human error in this area can greatly benefit the business. Not only does the error have potential ramifications from a legal standpoint, but it also takes a lot of time to track down the source of the issue. Then, rectify the problem, and also rectify the potential impact upon business relationships as well.
An automated system requires the purchase order to alert the person who is processing the order if anything is missing, or seems out of the ordinary. This eliminates any handwriting mistakes as well. Overall, it significantly reduces the likelihood of a human error occurring.
The core benefit of automation has been and always will be the benefit of saving employees’ time. They can put their work hours into tasks that benefit more from a human touch than a robot. Everything from the approval process to the record-keeping within the purchase order process is improved with the implementation of an automated process. The process as a whole moves faster, which means that your staff can focus on more important business processes.
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