Clients and results

Boy Scouts of America Logo
Hilton Logo
Oregon State Police Logo
Toshiba Logo
HCA Healthcare Logo
Allegis Group Logo

We saved more than $1 million on our spend in the first year and just recently identified an opportunity to save about $10,000 every month on recurring expenses with PLANERGY.

King Ocean Logo

Cristian Maradiaga

King Ocean

Download a free copy of "Indirect Spend Guide", to learn:

  • Where the best opportunities for savings are in indirect spend.
  • How to gain visibility and control of your indirect spend.
  • How to report and analyze indirect spend to identify savings opportunities.
  • How strategic sourcing, cost management, and cost avoidance strategies can be applied to indirect spend.

Mastering Purchase Order Tracking

Mastering Purchase Order Tracking

Purchase orders (POs) are powerful. With a single number, you can link every stage of every single transaction across your company spend. But in order to gain total control and transparency, you need a reliable (and preferably real-time) way to monitor and document your POs as they move through the procure-to-pay (P2P) lifecycle. You need a smart, user-friendly, and easy-to-use purchase order tracking system.

Maybe you own a small business and handle your own procurement process (along with everything else). Maybe you’re part of a large purchasing department. Whatever your role, it’s easier than you might think to create an effective and straightforward system to track your purchase order forms—and all the related communications, documents, and financial data they generate.

Purchase Order Tracking is Critical to Effective Procurement

Purchase orders secure a legal contract for goods and services between the vendor and your company. They ensure you get the right number of goods and services, in the time frame you specify, and at the level of quality you expect. They also provide a framework for precise inventory management, contract negotiation, and strategic supplier management.

In the days before automated purchase order software arrived to help businesses of all sizes take control of their procurement process with artificial intelligence (AI) and machine learning, PO tracking was more onerous than it is today, but just as important. In fact, despite the increasingly central role of automation and AI in procurement, some companies continue to rely on manual purchase order processes, including how they track purchase orders.

That’s because connecting the dots between purchase requests, purchase order forms, and the host of other documents related to a given purchase—including negotiated contracts detailing terms, conditions, and pricing, as well as vendor invoices, delivery documentation, and communication related to the order and any corrections or revisions—is essential. Those “dots” make it possible for a business to maintaining accurate financial records, make intelligent decisions with regard to strategic spending and supplier management, and ensure budgeting and forecasting are both based on total spend, not just the spend generated through proper channels.

Connecting the dots between purchase requests, purchase order forms, and the host of other documents related to a given purchase—including negotiated contracts detailing terms, conditions, and pricing, as well as vendor invoices, delivery documentation, and communication related to the order and any corrections or revisions—is essential.

The Basics of Purchase Order Tracking

In the days of pen, paper, and typewriter (which is still today for some businesses), creating a purchase order tracking system involved a series of time-consuming, but manageable, steps:

  1. Employee X has run out of Widget C. They fill out a paper purchase requisition, and submit it to their supervisor or another party for review.
  2. The reviewing party either rejects or accepts the request. In the latter case, they forward the purchase requisition to the purchasing department.
  3. The purchasing department creates a new PO, which includes not only the specific order details, but terms, conditions, pricing, and any other essential information. Multiple, color-coded copies are created:
    • Five copies for the customer, who needs an original for purchasing records, a copy for sales, a copy for accounting, a copy for shipping and receiving, and, quite often, a copy for the master file as a backup.
    • Two copies for the vendor, who will attach one to the sales order and the other to the invoice submitted upon delivery of goods.
  4. The purchasing agent submits a copy of the finalized purchase order to the supplier indicated on the form.
  5. When the order and invoice arrive, they’re cross-checked against the original PO and any necessary adjustments for damage, delays, errors, or promotional discounts applied after the fact are made.
  6. After a final review and approval, payment is made. Paper files are updated accordingly.

This system can and has worked for businesses of all sizes for decades. But it suffers from some pretty glaring potential problems, including:

  • Paperwork Overload
  • Time Consuming, Expensive, and Burdensome Workflows
  • Inconsistent Processes (different employees may have different approaches to copying, formatting, etc.)
  • Lack of Accountability
  • Frequent Logjams in the Approval Workflow
  • Human Handling Creating Potential for Frequent Human Errors (Did the right number make it onto every document? Did the right terms, conditions, pricing, etc. get applied? Has an invoice been mistakenly paid twice, thrice, or to the wrong vendor?)
  • Invisible Spend Created by “Rogue” Spenders Buying Outside the System

Automation Offers a Better Way to Track Purchases

All of the problems that plague a manual purchase order tracking system. Automated workflows, purchase order templates, and hierarchy-based roles and approvals take the mindless drudgery out of the purchase order process—along with human error and rogue spend. Every purchase order number is automatically connected and verified in real time against all related documents; automatic alerts notify users of potential problems, approval delays, or changes in payment terms, while contract particulars are automatically populated from the centralized document library.

It’s the same process, streamlined, refined, and optimized through continuous feedback and improvement. Headaches are nipped in the bud, and the time, resources, and work hours that would’ve been wasted on pushing paper or chasing exceptions can now be applied to strategic tasks that have much higher value for your company. The end result? Significant cost savings, greater efficiency for all your business processes, and a happier, more productive procurement team.

Tracking Purchase Orders Doesn’t Have to Be a Pain

Whether you use a typewriter and a mountain of carbon paper or the latest automated eProcurement solution, tracking your purchase orders is a key part of ensuring your procurement stays…well, on track. But if you’re ready to power up your procurement, break free from the long, cumbersome paper trail. Leave behind needless human error, invisible rogue spending, and an embarrassingly large carbon footprint by making automated purchasing software the center of your p2p process.

What’s your goal today?

1. Use PLANERGY to manage purchasing and accounts payable

We’ve helped save billions of dollars for our clients through better spend management, process automation in purchasing and finance, and reducing financial risks. To discover how we can help grow your business:

2. Download our guide “Indirect Spend Guide”

Download a free copy of our guide to better manage and make savings on your indirect spend. You’ll also be subscribed to our email newsletter and notified about new articles or if have something interesting to share.

3. Learn best practices for purchasing, finance, and more

Browse hundreds of articles, containing an amazing number of useful tools, techniques, and best practices. Many readers tell us they would have paid consultants for the advice in these articles.