How do I Choose the Best Purchase Order System?

Osmand Vitez

A purchase order system is the sequence of steps an individual must go through to request the acquisition of goods and services for company use. These systems provide an audit trail for tracking the movement of the company’s financial resources. Multiple systems exist in the business environment for the systems. Most of them focus on the accounting and internal document system of a company. Selecting the best purchase order system requires considering a number of factors relating to a company’s business systems.

A purchase order system usually includes a carbon copy to be kept on file.
A purchase order system usually includes a carbon copy to be kept on file.

Business owners and managers should decide whether they want to use a manual or automated purchase order system. Manual systems commonly include the use of a paper notebook that contains sequentially numbered purchase orders. An employee will fill out the form, which typically requires vendor, price, quantity, description, and accounting code, prior to submitting it for approval. These documents usually include a carbon copy kept on file. An automated system works similarly, except employees will use the company’s business or accounting software and fill out an electronic purchase order document.

When a purchase requisition order arrives at a purchasing department, it is often evaluated to see if the item is truly needed.
When a purchase requisition order arrives at a purchasing department, it is often evaluated to see if the item is truly needed.

The number of purchase orders a company will generate through its normal operations will play a large role when selecting a purchase order system. Using a manual system can become tedious and result in lost document, causing employees to recreate the purchase order. Additionally, companies must typically store these documents for several years, depending on applicable federal or state laws. An automated purchase order system can alleviate some of these problems, although learning and using the computerized version may take more training.

Other factors to consider when selecting a purchase order system are the number of employees using purchase orders and the location of the company’s purchasing office. Allowing multiple employees to access and create purchase orders can require companies to have more paper documents on hand or more usernames to access the purchase order module. Large organizations will often have a purchasing department or procurement manager to handle the purchase order when placing orders. Having multiple individuals turning in purchase orders can create an overflow of information in the purchasing department. Companies may need to limit access in the purchase order system to avoid this issue.

Companies will also need to consider how purchase orders flow into the accounting department. Individuals in the accounting department must be able to easily access the system in order to review purchase orders prior to paying bills. Auditors will also need access to determine how the information flows through the company. The inability to track the purchase order through each step in the system can result in alterations to the document that will compromise a significant part of the company’s cash management process.

A good purchase order system should make it easy to ensure that all items ordered are delivered.
A good purchase order system should make it easy to ensure that all items ordered are delivered.

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