Cloud computing, coupled with advanced software built with machine learning and artificial intelligence algorithms, has made purchase order software an essential tool for every procurement-heavy company.
Even better, because of all the competing purchase order software firms, you have plenty of choices at prices that are hard to beat.
Now is the perfect time to invest in the best purchase order software on the market today.
Why should my company purchase the best purchase order software?
Because procurement tools are too useful not to invest in them.
- Automatically generate a PO number to match later.
- Automate the approval process higher up the chain.
- Fill in standard purchase order information when your staff first puts in a purchase order request.
- Send the purchase order to your supplier to fulfill the order.
- Hasten the purchase order process.
- Reduce your lead cycle times compared to paper or even spreadsheet-based systems.
The best purchase order software will not only create purchase orders, but it will also store standard information you need to complete the job more efficiently.
We’re going to show you why the best purchase order software is so powerful for your procurement process.
What do procurement tools do?
Procurement tools automate the entire procurement process or various segments within your process.
The chief goal of your new procurement tool should be to make life easier for your procurement staff. Your procurement process involves a lot of moving parts, such as purchase orders, supplier and vendor details, budgets, and the purchasing process itself.
Any of these processes that you can automate, you absolutely should.
For example, Smithco Smithing Supplies took 30 minutes to fill out each purchase order and approve it, a process the team repeated at least three times per week because they would need to fill out purchase orders for various raw materials, like iron ingots, coolant, leather, and more.
Multiply 90 minutes of a purchase order process over 45 weeks a year, and they spend 67.5 hours of time spent on purchase orders alone in one year. That’s more than a week and a half. Let’s say Smithco cuts that time by one-fourth. Then, they spend just 17 hours a year, meaning their staff saved 50 hours of time.
What could Smithco do with that extra 50 hours saved during the purchase order process?
They could handle supplier management, to find better deals with shorter lead times.
Smithco might develop supplier relationships by sending people to industry expos and conferences. They could also spend some time discussing discounts, bulk orders, and contracts. All of these tasks are designed to lower your long-term costs of supplies.
This is just an example with a firm that places orders three times a week. Your cost-effectiveness goes up with each purchase order and supplier you add to your procurement process. If you place five orders a day, then you’re definitely in need of procurement process management using automated purchase order management software.
What tools can I use to automate my company’s procurement process?
You have eight different types of procurement tools to help you automate your purchasing process.
Think of them in two ways.
- Pure procurement platforms. These procurement process automations are specifically designed to handle procurement, and nothing else. The programs excel with companies that have a dedicated purchasing team or procurement department, or are moving in that direction. Procurement is a complicated process, and you need all the help you can get.
- Tools that deal with procurement as part of your other business processes. Many companies don’t need a singular tool just for procurement processes. Instead, they require a tool to automate a range of processes, with procurement and purchasing in that model.
Think about your business’ departments or categories of staff.
- Are you a large business or enterprise that needs to purchase a lot of raw materials or supplies on a regular basis?
- Do you have a team or a dedicated staffer who only does purchasing as a full-time job for the whole firm?
- Or do you have unusual and highly complex procurement challenges for your raw materials?
If you answered yes to any of these three questions, we have a tool for you.
Otherwise, you might just need a a digital tool, like purchase order software, that automates most of the worst parts of procurement while also offering something for the rest of your company, like something that integrates with your accounting software.
What should I look for when purchasing the best purchase order software?
Just doing a general internet search yields dozens, if not hundreds, of choices for the best purchase order software.
Not all purchase order software is equal to the task of what you need.
Some may be more comprehensive and out of your price range. Others may be too simplistic and not have enough.
The best purchase order software companies have levels of service and plans from the basic to the super-duper.
You also need to understand what you actually need to get out of your procurement solution.
Discover the must-haves for a workable purchase order management software or platform.
1. Automation for Purchase Order Management Software
Automation is the whole reason why you invest in the best purchase order management software in the first place.
How much automation you want is up to you and your budget.
If these types of purchasing software won’t automate at least basic purchasing processes, don’t even pay attention to them.
Procurement automation must include optimizations to handle purchase orders, receive approval workflow that goes through managers and executives, and ample tracking that avoids the need for manual data entry as much as possible.
Anything that is tedious and fosters human error, you should try to avoid by investing in purchase order software.
2. Budget & Spend Oversight in Purchasing Software
Aside from making the payments for invoices and automating purchase orders, reporting is a great feature of the best purchase order software. You always have to have a budget in mind when spending money on supplies and raw materials. Your teams need to always see and understand how much you spend with suppliers so you can optimize costs and mitigate supplier lapses (they will happen eventually).
When investing in an automated procurement tool, it must be considerably better than your standard Excel spreadsheets.
Find digital procurement tools that provide:
- Real-time oversight, including funds that have outstanding purchase orders that you haven’t paid for yet because the orders haven’t come in. This is a big issue for SMBs that spend money without knowing the current state of the budget.
- Team and project budgets, because you must know how much various teams are spending and why so you can develop strategies later.
- Comparisons with previous periods, because you need to compare the baseline to what you’re currently operating under. You always need to look at spending spikes to see if they happen during a particular time of year so you can delve into the reasons why. Plus, you can manage staffing levels for these busy times.
There should be no need to manipulate the data yourself, like in an Excel spreadsheet. Your chosen purchasing software does this for you.
3. Approval Tracking in Purchasing Software
Spending money means holding people accountable for their purchases. Accounting software often isn’t robust enough to handle procurement and purchasing approvals.
Managerial approval usually consists of an email chain that someone needs to check every time. Even if you use Google for your email system and you can search that email, you still might not be able to find it. And it takes more work for your finance department. What if that person leaves? How do you track the email chain then?
Take these issues out of the equation. Your purchasing software should include rules about who can spend money, who can fill out purchase orders, and who manages budgets. Clearly, there needs to be an approval chain. Your purchasing software should allow only certain people access to various functions. Managers and executives or owners should have the final say for purchasing.
When a purchase order comes through, a manager gets an automatic notification to examine and either accept or reject it. Then, your procurement software makes a record of it.
In your procurement software, people with the proper access can see who made purchases and why, in case there are discrepancies you need to look for due to budget snafus or cost overruns.
4. Easier Collaboration for Teams Through Purchasing Software
Purchasing itself isn’t that complicated. You merely transfer funds.
But then you throw suppliers into the mix. Do you really want to buy from this supplier, or is there a better one out there? When you have a good supply chain network and handle supply chain management really well, purchasing is easy.
But it starts to get tricky when other people start making purchases. What if you’re on vacation? You can’t be everywhere all at once. Yes, your colleagues don’t have the same sort of experience and procurement expertise as you. They may not know the nuances of various suppliers or supply chain issues. Did someone else read the supplier catalog as thoroughly as you? Probably not, because they might just want to streamline the purchasing process.
The right purchasing software walks your staff, no matter their level of experience, through the process of selecting a supplier, looking over the budget, and knowing the idiosyncrasies of the supplier without making it complicated.
5. Integrations With Other Software
Your purchasing software must be able to communicate with other tools, such as accounting software, billing software, and invoicing systems, not to mention inventory management software.
Before you commit to an automated PO tool, have your chosen company tell you or show you the tools it integrates with.
ControlHub Can Help With Purchase Order Software
Procurement is a complicated subject, but ControlHub wants to make it easier and you and your staff. Our software integrates with QuickBooks online and NetSuite. We offer cloud-based solutions that cater to the way your company’s procurement processes work.
Our list contains a variety of procurement solutions for all kinds of SMBs that rely heavily on procurement as part of the supply chain. Procurement is a basic concept, but every company runs it slightly differently. The tool you choose should be customized to the way your teams operate.
ControlHub can help you with:
- Spend limits to make sure people don’t go over budget
- Approval workflows so only people who are authorized to approve can do so
- Spending analytics to help you predict future purchases and budgeting
- Automated PO generation to save time
- Supplier integration to see catalogs of every supplier’s goods and materials
- Accounting integration for easy payments when invoices come in
- And so much more!
Contact us to discuss what features you need and what we can do for you. We have a wide range of features that we customize for your company’s purchasing software.