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The Benefits of Purchase Orders

What is a Purchase Order?

A purchase order is a “legally binding document” between a buyer and a vendor or supplier. This commercial source document indicates the details of the items that are to be purchased from the seller such as types of goods, quantities, and prices agreed in exchange for goods and services.

Buyers can use it to control the purchasing related to goods and services from the external suppliers in order to keep up with their business efficacy. Only an effective purchase order can help b2b business create a smooth supply chain management. Because it is the only means which clearly and explicitly communicate buyer intentions to the sellers. 

How an Electronic Purchase Order Helps Your Business?

No matter what size your business is, only the right electronic purchase order system can make a huge difference to your b2b business. It simplifies your workflow from ensuring that the correct information goes to your supplier, to have a complete overview of your stock levels. 

PO Saves Time 

Having piles of documents, files and records just make things more complicated and nothing else. Using a purchase order system for your business saves your time. You might think it is just another piece of accounting paperwork, but assembling it is one step to go easy when finding products intended for buying and placing an order. When you set up a purchase order system for routine purchases, it is created automatically and the same happens in the case with new orders, the far-reaching automation streamlines PO creation and order placement. 

As a result, you save time and focus on more important things that can be of great help in taking your b2b business to the next level. Since all you have to do is to check the invoice against the purchase order in order to make sure that the order placed is exactly as per the need. This way, you can access all your purchasing orders with just one single click. 

PO Streamline Accurate Inventory 

Having an accurate inventory is a win-win situation for your business and for your consumer. An operative purchase order system helps keep accurate stock management to increase customer lifetime value. Once a customer gets to know that his desired products will never go out of stock, there is less chance for the customer of leaving your business networking website. 

Not only this, but an effective purchase order system maintains the quality of products and keeps you aware of the damaged items received from the supplier before updating the exact inventory. This ensures that your customers will not face any disappointment from your business now or even in the future. For example, if the product received is damaged and is of no use. You can create a backorder for the damaged products and get the fine one to keep your sales in a run. 

PO Helps with a Financial Plan 

A purchase order is beneficial for planning future budgets. It outlines costs upfront even before the project begins. No matter what size your business is, purchase order mange every-day purchases that come up in the running business, the cost and quantity fields on purchase order give your business the idea about how much it needs to trade to generate profit. 

A purchase order system is a must-have. It not only help you plan future budget by looking at the current status of your business but also equips you with earlier records of how must you spent in the past. As a result, you end up creating an effective budget strategy for the years to come.  

PO Assist in Planning 

Purchasing records help you draft a better future. They provide key insights into business performance and offer your business the tools needed to examine product trends, market cycles, and business spendings. A careful purchase order system generates this information automatically,  makes the data easy to access and helps you track budget, receipts, invoices and much more with just a few clicks.

Manage Unexpected Expenditures

Manage Unexpected Expenditures

Having a purchase order system aligned with your b2b business is a wonder. It acts as an early warning system needed fro your business to handle surprising expenses. When b2b marketers buy, they mostly buy in bulk. An electronic purchase order system brings upcoming expenses into light time before. Which later becomes a great help with planning, budgeting, and communicating. PO’s provide the record for every expense.

For example, you take advantage of the most wanted product from your inventory but you don’t plan for the budget. You place an order, and then you don’t get to hear about the amount charged until you receive one large invoice of the amount due. At this point, an operational purchase order system helps you figure out easily from where this unexpected expense has come from and whether or not it should have been authorized by the concerned department. This shows that the purchase order system surely helps you keeps a watchful eye on your business activities.

PO Guards against the Unexpected 

Purchase order software acts as a legal binding document. And by legal we mean it grants you a legally enforceable record of what exactly you have demanded. It guards your business against the unexpected rise in the prices of the products you tend to purchase. When you receive the wrong type of the product demanded from the seller or charged with the wrong amount you can go back with the past orders, identify the problem and resolve the matter. This keeps your business avoid any kind of hindrance that comes in your relationship with the supplier. In running an online b2b business, maintaining a strong relationship is the most important thing that helps you with your sales.

When you automate sales and marketing at one single platform, it usually becomes difficult to maintain the number of orders you ordered from your buyer. There is a possibility that you might forget which items you have ordered when you are making sales in bulk and you might complain about it upon receiving it. But when you have everything documented with the help of purchase order you can quickly resolve the matter and get the quick information right away with just one single touch.

PO Keeps Strong Check on Spending

Adding a purchase order system to your b2b business lets you control the access to making purchase orders. To say, when you integrate a purchase order software with your business you can control who can and cannot authorize to place an order from your end. 

When you automate a purchase order with your business, it not only saves your business from unauthorized people from making a purchase without your consent. But also set up policies to help you strengthen further relations with your preferred supplier. An operative electronic purchase order limits the items according to their preferred suppliers. In order to make sure, that your business, when purchasing an item, place an order from the preferred supplier. This factor not only strengthens one’s relationship but also paves the way for getting more margin in the long run. 

However, with the changing dynamics, PO’s are also getting smart. In today’s time, many electronic procurement systems offer exceptional customization features that help set certain parameters per item or user. This overall step serves as a bonus and you can permit as many users as you want to access the purchasing system from anywhere at no additional cost. 

PO Keep Track of Expenses

Keep Tracks of Expenses

An automated purchase order system keeps track of all you’re spending. It keeps all the purchasing information in one easy to touch folder. To better understand where your business money is going. Electronic purchase orders offer 24/7 accessibility. And you can from any corner of the world can access when and what purchases have been made. 

Moreover, this effective cloud-based service system set alerts through email notifications about important matters and details related to business purchases. All you need is a cloud-based system and an internet connection to access your current business details from any device at any time. So, you don’t have to carry piles of papers anymore and can check updated as well as past purchases whenever there is a need, within a few minutes, right at your fingertips. 

PO Keep Track of Vendors

When you plug-in an effective purchase order system to your business, it helps you understand your preferred vendors or suppliers. A fully automated cloud-based system helps you easily store information related to those vendors. Not only this, but you can also group policies related to items such as which items to be ordered from which vendor. 

These insights also provide you with an idea about the vendors. You can check which the most suitable vendors for your business are and which are not. As well as you can easily check that if the desired vendors are even fulfilling the orders accurately or not. You can even check the time scheduled for the orders and decide if they are on time or behind the decided schedule and prone to mistakes. Without any doubt, the PO help identifies the poor vendors at the earliest stage and pick out the potential vendors who are good for your business. Remember, if you want to add value to your business you should choose vendors and suppliers that follow your compliance policy effectively. 

PO Handle Multiple Warehouses at One Time 

Adding an active purchasing system to your business help you manage multiple warehouses at the same time at one single platform. Meaning, when you order items for one single organization within one single platform. It keeps updated and separate tracks of the particular organization. Also, it manages the allocation of the stock ordered at each stage in order to maintain the order life cycle.

Moreover, when you are running multiple organizations you cannot calculate actual purchase order quantities and determine costs. You can run multiple purchase orders in a single purchase order, it helps reduce the shipping cost. But you can only merge purchase orders when your existing multiple purchase orders are from the same supplier. To say, when you plan to make a purchase order from your XYZ buyer against 100 bulbs you can later create another purchase order of 50 bulbs and then merge it into one single purchase order. This way you not only save time and lessen your burden but also avoid the cost of the second-order shipment cost.

Having a correct purchase order system for your business help lessen work, eliminate disputes and extra overheads. Today, many b2b business peers pay invoices only upon getting the receipt of a valid purchase order. This is why, if you add an effective PO, nothing will stop your business from moving onward. A business that produces purchase orders predicts that it is over its funds.

PO Fix Misapprehensions

An effective purchase order system assists in fixing the goof-ups that occur at the time of making a purchase. Purchase orders provide the exact business records. Such as they provide information regarding what you have ordered and on what price. Hence, it communicates all the details of the purchase.

It protects both the buyer and the seller from getting the wrong idea about the order placed over a call. No doubt, purchase order, leave space for any disagreement regarding what, what has not or should have been ordered. PO, surely gets you going faster, especially when inputting the details.


Aligning an active purchase order system to your b2b business takes your sales one step ahead. An effective purchase order system streamlines your business purchasing process to a standard procedure. If you want to see your business succeed connect your brand to a business networking website. Get your purchase order system from us. We would like to help you get all the benefits that automated purchasing can provide.

Read More: Rethinking about B2B Pricing Strategy: Best Way for Price Optimization

Written by
Kinza Munir

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