Say Goodbye to Manual Data Entry by Automating Purchase Order Process
Is your business still generating purchase orders manually? If so, you know how time-consuming, labor-intensive, and tedious these processes can be. These time-consuming tasks are more than just an office annoyance – they lead to costly delays, strained supplier relationships, and missed business opportunities. In today’s competitive landscape, relying on outdated manual processes isn’t simply inefficient; it’s a blind spot that could be hurting your bottom line.
As manufacturers and distributors spend significant amounts to streamline operations – the need for purchase order (PO) automation becomes critical so leaders don’t make decisions blindfolded. Automating specific tasks associated with purchase orders is a linchpin for organizations to streamline workflows, optimize adaptability, and unlock revenue potential.
Challenges of Manual Purchase Orders
Email Overloads
Global professionals send billions of emails daily, many related to POs. This constant communication is time-consuming, inefficient, and prone to errors. Searching through endless email threads for purchase order approval is a time consuming affair. As of April 2023, the United States was the country with the highest number of emails sent daily, with almost ten billion emails being sent. The United Kingdom, the Netherlands, Japan, Belgium, India, and Germany each sent 8.3 billion daily emails. As of April 2022, a staggering 231 million emails were sent worldwide within one minute.
Importance of Automation in Modern Business Processes
In today’s dynamic market, agility is key. But for many businesses, clunky manual processes like purchase orders (POs) act as anchors, dragging down efficiency and hindering growth. They want to utilize technology to improve quality and transparency, reduce operational costs, and deliver great customer experiences. The problem is that while most organizations use technology to get better, the results remain woefully short. Why? Procurement professionals still need to pilot or adopt automation while managing purchase orders.
Automating purchase orders paves the way for quick, error-free processing. Suppliers get clear orders, leading to accurate invoices and on-time deliveries. Organizations can also leverage artificial intelligence, data analytics, and machine learning to analyze historical data, identify patterns, and achieve a single source of truth. According to a survey by McKinsey, ‘procurement as the owner of the single-source-of-truth platform for external cost’ was the highest priority for high-value analytics. At the same time, most survey respondents said they lacked technology platforms that could perform thorough, integrated, real-time data processing. The survey featured that less than 20% of their organizations’ available procurement data was currently used.
What is Purchase Order Automation?
Purchase order automation means leveraging technology to streamline and optimize a business’s creation, processing, and management of purchase orders. It enables organizations to automate the entire purchase order lifecycle, eliminating the need for manual, paper-based processes – from initial request to the final payment. It helps organizations save time and effort and reduces the risk of errors with manual data entry.
Key Components of Purchase Order Automation
An automated purchase order system helps businesses track orders, approve invoices, and process payments without manual effort. Some tasks that are typically automated in a purchase order process include:
Streamline your requisition process: Automatically capturing purchase requests from different sources (e.g., email, e-commerce platforms)
Approval workflows: Routing purchase orders for automatic approvals based on pre-defined rules and spending limits
PO generation and sending: Automatically generating and sending purchase orders to vendors
Data integration: Integrating purchase orders with other systems like ERP and accounting software
Supplier communication: Sending automatic order updates and reminders to vendors
Importance of Automation in Modern Business Processes
In today’s dynamic market, agility is key. But for many businesses, clunky manual processes like purchase orders (POs) act as anchors, dragging down efficiency and hindering growth. They want to utilize technology to improve quality and transparency, reduce operational costs, and deliver great customer experiences. The problem is that while most organizations use technology to get better, the results remain woefully short. Why? Procurement professionals still need to pilot or adopt automation while managing purchase orders.
Manual data entry
Keying in purchase details is tedious and error-prone, leading to incorrect quantities, wrong products, and missed updates. With manual input data, there’s a higher chance of ordering the wrong quantity, missing updates on altering an order, selecting the incorrect product, or even misplacing decimal points in prices. As a result, this hinders operational efficiency and impacts the bottom line. According to the Centre for Advanced Procurement Strategy (CAPS) Research, the average cost of processing purchase orders manually is around $217.
Inaccurate workflows
Manual processes lack standardization, leading to duplicate orders, missing documents, and poor accountability.
Automating purchase orders paves the way for quick, error-free processing. Suppliers get clear orders, leading to accurate invoices and on-time deliveries. Organizations can also leverage artificial intelligence, data analytics, and machine learning to analyze historical data, identify patterns, and achieve a single source of truth. According to a survey by McKinsey, ‘procurement as the owner of the single-source-of-truth platform for external cost’ was the highest priority for high-value analytics. At the same time, most survey respondents said they lacked technology platforms that could perform thorough, integrated, real-time data processing. The survey featured that less than 20% of their organizations’ available procurement data was currently used.
Lack of visibility
Tracking POs through paper trails and email threads is difficult, causing confusion and delays. Wasting time chasing down missing paperwork or clarifying discrepancies.
The inefficiencies of manual POs go beyond just financial costs. They also lead to frustrated suppliers, damaged relationships, and missed business opportunities. Automating purchase orders reduces the time and labor needed, replacing fragmented and outdated processes with electronic workflows that are more efficient and accurate.
Slow approvals
The traditional PO approval process is often slow and cumbersome, hindering operational efficiency.
Advantages of PO Automation
Reduced Lead Time
PO automation streamlines the entire purchase order process, minimizing the time it takes to create, review, approve, and generate orders. Automated systems allow orders to be generated and processed more quickly, reducing the lead time from the initial stage to transmission.
Cost Savings
Paper-based purchase order processing involves a lot of hidden costs. Every minute spent chasing approvals or correcting errors is money down the drain. Automated systems save valuable time and money by eliminating manual tasks, phone calls, and redundant paperwork through streamlining workflows and automating repetitive tasks.
Enhanced Visibility and Control
Office workers manually hunt for files for over 50% of their time. Centralized data and integrated systems offer real-time order tracking and complete visibility at every stage. No more manual searches across departments – access accurate, up-to-date information about your orders instantly.
Increased Efficiency
In a fragmented order processing environment, each document passes through multiple desks, increasing the likelihood of errors or misplacement. The cumulative effect of such errors and inefficiencies delays purchase orders and hurting the company’s bottom line. PO automation streamlines operational workflow through automatic approval routing and pre-defined templates, making processing times for purchase orders faster.
Improved Supplier Relationships
Automation streamlines communication and reduces delays, fostering stronger relationships and smoother collaboration. Track supplier performance with real-time data, and collaborate on improvement initiatives. Build stronger partnerships through reliable communication and proactive problem-solving.
Accelerated Approval Process
An automated purchase order system eliminates the need for physical paper-work, ensuring instant routing of approvals to the right stakeholders. 94% of corporate company executives prefer to utilize a unified platform to integrate their apps and implement process automation rather than rely on several platforms. Integration with ERP systems and other supply chain applications provides real-time three-way matching that adds extra security to the purchase order workflows and cutting out inefficient procurement practices, ensuring compliance, and making cost-effective business decisions.
How Quloi Helps with Your Purchase Orders Management?
Logistics Visibility: Enable real-time order tracking and delivery information with end-to-end visibility. Stay informed about expected arrival and waiting times.
Streamlined Collaboration: Reduce the time, inefficiencies, and potential risks by collaborating on orders and shipments through a unified platform.
Centralized workspaces: Collaborate seamlessly with suppliers in dedicated workgroups and workspaces. Easily share order details, documents, and insights for order, booking, and shipment transparency.
Improved communication: Break down communication silos and foster collaboration from request to delivery. Ensure everyone is on the same page, every step of the way.
Enhanced data accuracy: Reduce manual data entry errors and gain real-time access to accurate information at your fingertips.
Frequently Asked Questions
Why do you need to automate your purchase order process?
With manual data entry, keeping a record of error-free and accurate multiple POs becomes difficult. Automating the PO process reduces human intervention, streamlines operations, and minimizes errors, delays, and costs.
What types of problems does a purchase order prevent?
A purchase order prevents misunderstanding by clearly specifying the ordered items, quantities, prices, and delivery timelines – reducing errors and billing discrepancies, enabling timely delivery, and ensuring alignment between buyers and suppliers.