If you're like most directors of engineering at hardware or robotics startups, you're always looking for ways to streamline your operations and save time. After all, time is money, and every minute you can free up is one more minute you can spend developing your groundbreaking products.
One way to achieve this efficiency is through automated purchase orders. Automating the purchase order process can be a game changer regarding efficiency and cost savings. Automated purchase orders can speed the delivery of parts and components, allowing you to keep your projects on schedule.
But what exactly is an automated purchase order, and how can it benefit your startup? Keep reading to find out everything you need to know about automated purchase orders.
What is an Automated Purchase Order?
An automated purchase order, or PO, is an electronic document generated by a software system using data from your company's ERP system. The main purpose of an automated PO is to streamline and automate the purchase order creation process and PO approvals.
How Are Automated Purchase Orders Created?
Automated purchase orders are created using data from your company's ERP system. This data includes information on the products or services your company needs to purchase and the supplier's contact information. Once this data is entered into the system, the software will generate a purchase order based on the information entered.
An automated purchase order is a product of using purchase order automation software. This software automates the procurement process by automatically sending a purchase request to the relevant organization staff for review and approval.
If the team member approves the purchase order, the purchase order software automatically creates a PO number in your ERP system. The software also automatically sends the purchase order to the supplier.
What are the Benefits of Automated Purchase Orders?
Embracing purchase order automation software will help your startup in several ways. The major benefits that you're likely to reap include:
Automated purchase orders will decrease the time you spend processing purchases by eliminating repetitive tasks. When automating, there is little risk of duplicating steps or purchasing some items twice, eliminating waste of resources.
Due to real-time processing, there will be no delays between PO approval and sending a purchase order to the vendor. You’ll also avoid wasting time tracking down crucial documents or missing orders. All these aspects will free up your time so you can work on other projects or core activities.
When you automate the purchase order process, you can be confident that all your documents are accurate. Automated purchase orders eliminate the potential for human error, as all data is entered into the system once and then automatically sent to the supplier.
Automated purchase orders also allow you to track and trace every step in the process. This level of transparency can help you identify any errors that might have occurred and take corrective action.
Automating your purchase orders can also help you save money. The purchase order process can be quite costly when done manually, as it requires a lot of time and resources. For example, you'll need to print and mail documents and make phone calls to suppliers.
In contrast, automated purchase orders are sent electronically, eliminating the need for paper and postage. You can use the system to track spending and supplier invoices, which will help you negotiate better deals with vendors.
Faster Processing of Accounts Payable
When you have automated purchase orders, your accounts payable process becomes seamless. Your accounting department can manage all the invoices they receive from vendors in one place.
The purchase order automation software will automatically generate an invoice in your ERP system once you receive the products or services. The accounting department can then match the invoices to the automated PO and approve them for payment.
Better Visibility into the PO Process
With automated purchase orders, you'll have complete visibility into the process. You can see when a purchase order has been created, approved, and sent to the supplier. In addition, you can track the order's progress and see when it has been invoiced and paid.
This level of transparency is crucial for startups as it helps you keep track of your spending and ensure that all orders are processed on time.
Automated purchase orders also offer greater flexibility than manual purchase orders. For example, you can set up the system to send reminders to approvers when they have a purchase order pending.
Automated purchase orders allow you to change an order until you send it to the supplier. This is impossible with manual purchase orders, as you cannot change them once you write and send them out to the next personnel or department.
Get Started on Automated Purchase Orders Today
Now that you understand automated purchase orders, you have no excuse not to implement this life-changing technology in your startup. Automation will save you time and money while improving your purchase orders' accuracy. So, hurry up and get started today.