Clients and results

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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.

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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.

What is Purchase Order Automation?

What is Purchase Order Automation

What is Purchase Order Automation?

Purchase order automation is the process of using centralized software to create a purchase order process that automatically sends a purchase requisition to the appropriate staff member for approval, then once approved, automatically sends the PO document to the vendor. It replaces the need for traditional paper purchase orders and streamlines the process.

When you use purchase order software to issue electronic purchase orders in your ERP system, your suppliers can acknowledge them and automatically convert them to accurate invoices that integrate with you accounting system. This makes it easier for your accounts payable (AP) department to manage the payments. Using PLANERGY adds an additional layer of protection for your business, thanks to three-way matching. Using the PO and invoice, the receiving department can ensure you’re only receiving items that were ordered, and only paying for the goods and services that were received. If there’s a mistake where goods and services were not received, or the wrong product was shipped, the issue is quickly spotted so AP doesn’t blindly pay invoices, or leave invoices sitting too long.

Whether you’re sending purchase orders on behalf of your business for goods and services you need, or you’re receiving them to sell your goods and services to others, you need an automated purchase order system to manage everything effectively. Handling orders manually is not only time-consuming, but also error-prone, and can create an avalanche of problems within your organization.

How Purchase Order Automation Saves You Money

If your business has to deal with a chaotic mix of paper-based order processing or outdated systems, then moving toward automation comes with several benefits. This is especially true in multi-national companies that are dealing with the additional complexities associated with language barriers and import tariffs. Even small businesses that don’t have to spend a lot of time with their current processes may find it difficult to keep up with as they scale. Organizations of all sizes can benefit from automation.

Reduces the Potential for Human Error

Purchase orders are binding legal contracts between a buyer and a seller. They must indicate the types, quantities, and agreed upon pricing for products and services. Internally, they are used to control purchasing and to keep an eye on departmental budgets and overall cash flow. Mistakes on the PO could mean going back and forth between the vendor and the buyer to get things right, spending more money than intended, ending up with more or less product than required for optimal business operations – thus tying up cash or slowing down production – and more.

Manual processes leave the potential for a number of errors on each order, which must be tracked down and addressed. These include incorrect supplier names and codes, lack of authorization, failure to place orders with preferred suppliers, illegible handwriting, and failure to complete all required information.

Automated systems require electronic orders to be issued which alert the person who is processing the order if the information is missing. It removes the issue of handwriting and the possibility of using non-preferred suppliers and ensures supplier names and codes are correct across the board.

Improved Procurement Process

When you first implement the software solution, you’ll spend time setting up the necessary user permissions for all team members in regard to approval routing, dealing with significant data entry for each supplier (uploading contracts, adding products and services to the catalog, payment terms, etc.) and more. However, once all that is complete, you’ll benefit from a streamlined purchasing process.

You’ll be able to set up business rules that dictate which team members have the ability to request products and services for their department, who has the authority to approve requisitions and convert them to purchase orders to send to vendors, who has the ability to see and process invoices, who has the authority to make budget changes, and so on. For instance, you can set up a rule that any purchase under $50 is automatically approved. Once the approval process is in place, whether it requires approval from one person or multiple people, all purchase requisitions will follow those rules automatically before becoming official orders.

Save Time

With all vendors in your supply chain stored in a centralized location, people placing orders don’t have to spend a lot of time digging for the information they need to include. They can put together the requisition in a fraction of the time, then click and send it to the approval person right away. That person can then review the information and sign off on it so it becomes immediately becomes an electronic PO or deny it and explain why so it can be amended if necessary. The PO is automatically sent to the vendor.

All of this happens in real-time. Compared to traditional paper forms, which must be faxed, mailed, or scanned to create a digital form before emailing to the supplier, there are significant time savings. Plus, it’s easier to find a record of all actions taken thanks to the audit trail, so there’s no time lost tracking down missing orders and documents. PO processing moves faster overall, so your staff can focus on other important business processes.

Greater Visibility

With reporting features, you’ll have great visibility into each department’s spending. You’ll be able to see what they’re spending money on and who they’re spending it with. This will allow you to secure better deals with your vendors or alert you to when you should be considering new suppliers to work with. You’ll be able to get a better idea of how the entire supply chain is working and overall supplier performance. You’ll be able to search through all documents in the system, so you can access all the pending orders, view the status of orders, invoices, and payments at any time.


It’s possible to create rules and permissions at such a granular level you can restrict purchasing to certain dollar thresholds, certain suppliers, or specific items. You can create blanket POs and automatically route them for approval, and more. This flexibility ensures that no matter what your needs are, the system can be configured to address them.

When done correctly, purchase order automation provides your organization with many benefits, including increased productivity, better compliance with corporate policy and contract terms, increased visibility into company spend, and more. Using the platform to gain further understanding of your buying patterns, you can locate strategic cost savings opportunities to position your company with a significant competitive advantage.

Organizing your business purchases is essential to keeping maverick spending at bay and maximizing your working capital. As your business grows, keeping track of every dime becomes essential to effective operations. Ditch the archaic processes in favor of technology that will grow and expand with your company.

What’s your goal today?

1. Use PLANERGY to manage purchasing and accounts payable

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