Last editedJuly 20222 min read
Are you still manually approving your purchase orders? If so, you already know how time-consuming it can be. Delays can lead to a breakdown of vendor relationships, not to mention lost revenue. Here’s how purchase order automation can transform your approvals process for the better.
What does purchase order automation mean?
An automated purchase order system uses centralised software to automate your purchase order approval process. Purchase requests are automatically sent to the correct individual or team for approval. Purchase orders are automatically created and submitted without any need for manual data entry. With digital documents transmitted through a central system electronically, there’s no need for physical movement of people or paperwork. This lets a business’s accounting team focus on higher value business activities, rather than getting bogged down with invoices, purchase orders, and receipts.
What are the challenges of manual purchase order processing?
To really understand the value of an automated purchase order system, it’s helpful to look at the hassle that manual processing creates. A manual approval process is inefficient and heavy with reams of paper documents. There’s a lack of security when you’re filing paper documents or even storing them on business computers, particularly if these purchase orders contain sensitive financial details. Labour intensive and prone to human error, the whole process can waste a lot of time and money in the long run.
What are the purchase order automation benefits?
Now that we’ve identified some of the challenges to overcome, here’s an overview of the purchase order automation benefits.
Increased efficiency: Streamline repetitive tasks using automated software. You can put defined rules and controls in place to make the purchase order approval process more efficient, without any paperwork falling through the cracks. This means you’ll spend less time correcting errors or reconciling old statements.
Cost savings: Manual invoice and purchase order processing involves a lot of hidden costs. Processing paperwork involves the use of paper and ink, not to mention the hours spent by employees working on approvals and correcting errors.
Accuracy: Speaking of correcting errors, automating your purchase order process helps cut down on typos, duplicate POs, and other issues that can be costly to fix. For example, a simple slip of the finger can mean the difference between ordering 100 units and 1000 units.
Control: Perhaps one of the biggest benefits of purchase order automation software is that it pulls together all your documents into a single dashboard. Most software is cloud-based, which allows the accounting team to log in and manage processes on the go. You don’t need to waste time tracking down documents to see whether they’ve been approved; this information is available at a glance.
How to automate purchase orders
The simplest way to get started is by choosing purchase order automation software. Look for software that integrates with your existing financial platforms and arrange onboarding and training sessions for the accounting team.
Centralised software gives you predefined templates where you can input your company name and details. Most major accounting software offers purchase order automation as a standard feature, alongside invoicing and reconciliation. Simply enter your vendors into a central database for quick retrieval of contacts and connect appropriate staff members to the system for streamlined approvals.
GoCardless has integrations with over 200 global partners, including major cloud accounting and invoicing software like Xero, Salesforce, Chargebee, and Zuora. By signing up with GoCardless, your business can collect both recurring and one-off payments directly from customer bank accounts – all while continuing to use your existing financial system for purchase order automation, reconciliation, and more.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.