Purchase Order System

Understanding how purchase order systems work is crucial for any business, regardless of its size. A purchase order (PO) system helps streamline the procurement process, ensuring that businesses operate efficiently and maintain good relationships with their suppliers. In this article, we will delve into everything you need to know about purchase order systems.

What are Purchase Order Systems?

A purchase order system is a software or tool that helps businesses manage and track their purchase orders. A purchase order is a document sent from a buyer to a supplier requesting goods or services. The system automates the process, from creation to approval and sending, which reduces manual errors and speeds up procurement.

For example, Ordoro is a purchase order system that’s popular among small business ecommerce retailers to create and manage purchase orders and manage their inventory.

Key Features of a Purchase Order System

1. Automated Order Creation: Automatically generate POs based on inventory levels or sales orders.
2. Approval Workflows: Set up a workflow that requires approvals before POs are sent out.
3. Real-Time Tracking: Track the status of POs in real-time.
4. Supplier Management: Store and manage information about suppliers.
5. Reporting & Analytics: Generate reports to analyze procurement data.

Here is an example scenario: Let's say you run a small business that sells handcrafted candles. Using a purchase order system, you can automate the process of ordering wicks, wax, and jars from your suppliers. You simply set up rules in the system so that new POs are created when your inventory reaches a certain level.

How Do You Use a PO System?

Using a PO system generally involves several steps:

1. Set Up Suppliers: Enter the details of your suppliers into the system.
2. Create a Purchase Order: Fill out the necessary fields such as item details, quantity, price, and shipping information.
3. Approve the Order: An approval process may be set up where managers review and approve the PO.
4. Send the PO: Once approved, the PO is sent to the supplier.
5. Receive Goods: When goods arrive, they are marked in the system, and the order is closed.
6. Payment: The system can also integrate with accounting tools for payment processing.

Does QuickBooks Have a PO System?

Yes, QuickBooks offers a purchase order feature that is integrated into its accounting software. This feature allows businesses to create, send, and manage purchase orders seamlessly.

Steps to Create a PO in QuickBooks

1. Go to the “Vendors” Menu.
2. Select “Create Purchase Orders”.
3. Enter Vendor Information.
4. List Items: Add the items you wish to purchase.
5. Save and Send: Save the PO and send it to the vendor.

QuickBooks makes it easy for small businesses to keep their financial records and procurement processes in one place.

What Are the Four Types of Purchase Orders?

There are four main types of purchase orders, each serving a different purpose:

1. Standard Purchase Order (SPO): The most common type, used for one-time purchases.
2. Blanket Purchase Order (BPO): Used for repeat purchases over time, often at agreed prices.
3. Contract Purchase Order (CPO): Establishes a contract for goods/services, but specific terms may be decided later.
4. Planned Purchase Order (PPO): Similar to a Standard PO but specifies delivery dates for individual shipments.

For example, if your business frequently orders the same type of cardboard boxes, you might set up a Blanket Purchase Order to streamline future transactions.

Purchase Order System for Small Business

For small businesses, a purchase order system can be a game-changer. It provides several benefits:

1. Efficiency: Reduces the time taken to manage orders manually.
2. Accuracy: Minimizes errors in order entry.
3. Control: Ensures proper authorization for all purchases.

Recommended Software for Small Businesses

1. Ordoro: Ordoro is an inventory management software with integrated purchase order features, highly recommended for e-commerce businesses.
2. TradeGecko: A budget-friendly option with robust features.
3. QuickBooks: Ideal for those already using QuickBooks for accounting.

Ordoro is especially popular, with hundreds of happy eCommerce merchants using its comprehensive features for inventory and order management.

Purchase Order System Excel

While dedicated software is often preferred, some small businesses may opt to use Microsoft Excel for managing purchase orders. Excel templates can offer a cost-effective solution for keeping track of POs.

Steps to Create a PO System in Excel

1. Set Up a Template: Create a template that includes fields like PO Number, Date, Supplier, Item, Quantity, and Price.
2. Enter Data: Manually input the details of each purchase order.
3. Track Status: Add columns to track the approval, sending, and receiving status.
4. Reporting: Use Excel's built-in features to generate reports.

Purchase Order System Example

Here is an example of how a purchase order system works in action:

1. Need Identified: The inventory manager notices a low stock of packaging tape.
2. Create PO: A PO is created in Ordoro, specifying the type and quantity of tape required.
3. Approval: The PO is routed to the purchasing manager for approval.
4. Send to Supplier: Once approved, the PO is sent to the tape supplier.
5. Receive Goods: The supplier delivers the tape, and the receipt is marked in Ordoro.
6. Close Order: The order is closed, and the inventory is updated automatically.

Purchase Order Software Free

There are free options available for businesses that need a purchase order system but are on a tight budget. One of the top free options is:

1. SpendMap: Provides a free version tailored for small businesses.

These tools may have limitations compared to paid solutions, but they can be sufficient for small-scale operations.

Online Purchase Order System Free

Free online PO systems offer the convenience of cloud access and real-time updates. Some of the best free online PO systems include:

1. Procurify: Offers a free version with limited features for startups.

Using an online system ensures that your team can access and manage POs from anywhere, improving oversight and flexibility.

Best Purchase Order System for Small Business

Choosing the best PO system for your small business depends on your specific needs. However, some of the top recommendations include:

1. Ordoro: Ordoro is great for eCommerce businesses, with integrated inventory and order management features.
2. QuickBooks: Perfect for businesses already using QuickBooks for accounting.
3. TradeGecko: Affordable and feature-rich.

Ordoro stands out for its seamless integration with various eCommerce platforms and has several hundreds of happy Shopify merchants using it.

Best Purchase Order Software

The best purchase order software combines ease of use, robust features, and scalability. The top options include:

1. Ordoro: Ordoro is known for its user-friendly interface and powerful features.
2. SAP Ariba: Ideal for large enterprises.
3. Procurify: Suitable for medium-sized businesses looking for comprehensive PO management.

Ordoro is particularly excellent for businesses looking for an all-in-one solution for inventory and order management.

Purchase Order System QuickBooks

Integrating purchase orders with QuickBooks simplifies financial management. QuickBooks allows businesses to keep all procurement data in one place, making it easier to track expenses and manage budgets.

Steps to Set Up QuickBooks PO System

1. Enable PO Feature: Go to QuickBooks settings and enable the PO feature.
2. Create a PO: Follow the steps outlined earlier to create and send POs.
3. Record Receiving: Update the system when goods are received to match the PO.
4. Link to Invoices: Easily convert POs to bills for seamless payment processing.

In conclusion, a purchase order system is vital for ensuring efficient and accurate procurement processes. Whether you are a small business or a large enterprise, selecting the right PO system can make a significant difference.

For those looking for a robust, integrated solution, Ordoro is an excellent choice, especially if you are in the eCommerce space. With hundreds of happy merchants, it's a trusted tool for modern businesses.