Digital Purchase Order – Must Read Before Creating a DPO

The digital purchase order software market will be worth $ 9.5 billion globally by 2028. The industry can increase by a CAGR of 10.1% by 2030.

With the rising industry, now there is multiple software that provides different features and professional pre-build templates to create well-vetted purchase orders.

But you need to understand the nitty-gritty elements important to digital purchase orders.

So without further ado, let’s get the learning started.

What Is a Digital Purchase Order?

A digital purchase order is an electronic document highlighting the transaction’s terms and conditions between the seller and the buyer. They are generated using an electronic order system or a purchase requisition.

Like a paper purchase order, a digital purchase order dictates the purchasing terms and has all the required information for completing the transaction. It stores all the transaction-related documents in a single place.

Creating digital purchase orders start from a requisition/request for purchase and ends with generating and issuing the actual purchase order.

The digital software bypasses the hassles of manual processing and delivers results in an efficient and time-saving method. You can speed up the task, minimize errors, and maintain a more accurate log of your purchases.

You can remove the need for data rekeying and increase the productivity of the purchase order generation process. You can assign different access to the internal team to handle a specific part of the purchase order workflow that can help you achieve the desired results within a specific time.

Using the old traditional methods like emails and spreadsheets for completing the procurement process has many drawbacks that can hinder your business efficiencies and result in material delivery delays and failures.

Look at the wide range of issues that can arise using manual order processes.

Problem with Manual Order Process

With the increased competition in the contractor business, you need to stand out from the rest and deliver quick and efficient service to your clients. But if your employees or technicians face delays in accessing the required material, they can’t deliver the desired service to your clients.

That’s the major problem that manual order processing can result in. The inefficiencies of the process result in material delivery delays and failures that can hinder the procurement process and directly impact the service you provide your clients.

No centralized control

You don’t have centralized control of your purchase order processing, and you can’t implement quick changes in the process. The limitation of the pen and paper approach can result in miscommunication and disrupt the smooth functioning of your business workflow.

Issues in cross-checking

Sometimes, different important legal documents can be misplaced, which can cause discrepancies in the cross-checking done by your account payable team. The seller won’t receive the payments, which can raise issues in your relationship with the vendor.

No organized history

The manual processing of purchase orders doesn’t offer an organized history of your previous invoices and purchase orders that can help you make informed future decisions. There’s no security of the documents, which can compromise your purchase order management process.

These major issues can be a roadblock to your business success and hinder your purchasing process in the competitive business environment. You can lose your potential clients because of inefficient material delivered at the site, which can stumble your business in the rising service industry.

That’s where an electronic purchase order system can help you adapt to the new and fast business ecosystem.

Why Do You Require an Electronic Purchase Order System?

You need an electronic purchase order system to simplify your purchase order process and ensure that the requests are handled with finesse. You can use the digital purchase order system to bypass the inefficient manual and ensure that your team can create purchase orders quickly.

The electronic purchase order process is more simplified and professional compared to manual processing. The paperless purchase order system can remove the hassle of managing physical papers and ensure that you can control spending with a centralized view of the situation.

Your account payable process can also be simplified with the power of electronic software that can give your team access to the requested documents within a few clicks.

Let’s explore the features of a professional digital purchase order software to ensure that you.

Features of Digital Purchase Order Software

Different digital purchase software offer different features, but we have shortlisted a few important features that need to be included in professional digital purchase order systems.

1. Real-time reminders

The software should be equipped to deliver real-time, quick notifications that can remind the individual involved in the supply chain about the new updates in the purchase order process.

It should also remind the designated authorities about the review and approval task of the purchase order process.

2. Cloud-based storage

Safe and secure cloud-based storage is a critical feature that digital purchase orders must include that can help you save your purchase order request and invoice in the cloud servers.

The purchasing software must ensure that the data is not intruded on and your information remains safe.

3. Better workflow

A smooth and swift purchasing workflow can help you make the purchasing process easier. You can remove the inefficiencies in your process and perform better cash flow planning for better results.

4. Automate reporting

One of the key features of electronic purchase order software is automation. The software can offer detailed insights about the purchase order workflow, which can help you set up a configurable approval process. You can check your own inventory system using the insights provided by well-vetted reports.

Here’s how you can integrate digital purchase orders into your existing business ecosystem.

Steps to Set Up Digital Purchase Order

The setup of a professional digital purchase order can differ based on the software you choose to integrate. But the most common integration steps are:

1. Create your forms

You can choose a purchase order template based on your preference or build one from scratch that can help you initiate the purchase order program.

Your team can access the purchase order creation features of the software for generating professional electronic purchase orders that can be approved and shared with the vendors and sellers.

2. Structure workflow

You need to structure the workflow based on the purchase requirements and provide user-specific permissions to different individuals based on their responsibilities.

You need to integrate multiple internal checks before the purchase order is delivered to the seller and external checks to ensure that the material is delivered on time. Ensure that the finance team can manage the accounts payable process with finesse.

Set the approval workflow based on the quantity or amount of the purchase request that can help you manage the control spend and provide maximum control to the leading authorities in your business.

3. Set permissions

You can provide different responsible individuals authorization authority to ensure that the purchase order workflow is smooth and efficient.

Let the department heads manage the small-scale purchase orders and assign the core management team to handle the large-scale orders.

4. Implement the PO system

Set up rules and regulations to ensure that you optimize your purchase order performance with every purchase transaction. You need to study the purchase data delivered by the digital purchase order system to help you improve the areas that require improvement.

Instruct your team to follow a set protocol while processing the purchase order and strengthen your purchase order using the power electronic system.

You can extract detailed reports from the software that can show the average purchase order volume, cash flow standpoint, total committed value, and other confidential data about the purchase transaction.

Once the procurement software is ready to function, you can extract different benefits to enhance your contractor’s business operations.

Benefits of Electronic Purchase Order System

1. Reduce workload

You can minimze the workload as the software can approve purchase orders with finesse. Your team can minimze the effort and time required to manage the manual processing and channel their focus on more productive core business operations.

You can get centralized control over the PO process that can help you avoid searching for physical documents. You can handle the requisition data within a few clicks minimizing the extra effort to track data using paper-based systems.

2. Save time and cost

You need to pay a one-time amount for integrating the software, but it can help you save long-term time and the cost of your purchase order processing. With enhanced business efficiency, you can process the purchase order faster and receive the required material on time.

It can help your team deliver an excellent customer experience to your clients and ensure that you can scale your business operations. A digital PO management software can provide real-time feedback that can help you avoid the hassle of manually checking the purchase order updates.

3. Improve the cash flow process

You can improve your cash flow and invoicing process. The software can help you align with the payment terms and ensure you don’t bypass the committed spend.

The finance team can check the documents quickly to approve the payments to the vendor, which can help you simplify the approval tasks.

You can quickly check your inventory while approving the purchase order, which can help you avoid bypassing your budget and ensure that your purchases are not blindfolded.

4. Less errors

The software can help you bypass the drawbacks of the manual processes, including the mismanagement of the paper documents, which can result in delays or purchase failures.

You can increase the efficiency and precision of the purchase order workflow and ensure seamless communication with the individuals involved in the supply chain management.

5. Better compliance

You can ensure better compliance with the rules and regulations set for the purchase order processing and get a bird’s eye view of the operations.

The software can help you make different purchase orders within a few clicks and ensure that you receive the desired material supplies within a specific time.

Multiple purchase order management software can offer you these benefits, but only a few stand out based on their features and reasonable price.

We have filtered the best purchase order management software that can offer you more than other digital purchase order software.

InvoiceOwl Offers You Digital Solutions for Your Purchase Orders

InvoiceOwl is the leading estimation and invoicing software for contractors that can provide an excellent ecosystem to create purchase orders and manage the workflow digitally.

You can get centralized control of the purchase order approval operations and keep track of the history of the process. You can manage your invoice payment effectively by thoroughly cross-checking the documents within a few clicks.

InvoiceOwl is an incredibly intuitive tool that offers invoicing, estimation, credit memo journal entry, and other powerful features that can streamline your financial management ecosystem.

Access the FREE trial today, and ensure that you can integrate a powerful digital purchase order ecosystem into your contractor business.