How Purchase Order and Purchase Requisition Templates help your business succeed

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Purchase Orders (PO) and Purchase Requisitions are extremely common documents used by practically every business. They help business control costs, ensure that business rules are followed and that the business gets the best possible deal. It’s also easier to track down problems e.g. if the wrong items are delivered the signed copy of the purchase order proves what was actually ordered.

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What’s the difference between a Purchase Requisition and a Purchase Order?

A Purchase Requisition is an internal document that focuses on ensuring that internal business norms are followed when making a purchase. It ensures that the necessary checks, reviews and approvals are in place before an order is placed.

A Purchase Order is a legal contract between vendor and buyer. It’s the actual document that’s sent to the vendor to place an order and will generally outline terms & conditions, legal obligations and protections for both sides.

They’re important for cost and inventory management, avoiding waste due to multiple orders for the same items and for ensuring that the vendor and buyer are in sync with regard to the contents of the order as well as their legal rights.

What’s in a typical Purchase Order?

A typical PO will have:

  • A unique PO number for use by the finance department.
  • Date the PO was submitted.
  • Buyer and seller address, phone and email contact information.
  • Shipping address for buyer if different.
  • Line items for each item that was ordered including the product name/number, quantity ordered, unit price, subtotal for each line and the grand total of the order.
  • Terms and conditions including payment terms, delivery terms etc.
  • Any documents relevant to the order being placed.
  • One or more signature lines for company representatives.

The PO contains all information necessary for the buyer and the seller to agree on what is being ordered, what is the cost, when the items will be delivered and when payment will be received. If mistakes are made, it protects both sides.

Small businesses often start with MS Office templates

It’s tempting and easy to start with an Office template – an Excel or a Word document.

word-templates.pngThese templates are free, they contain all the necessary fields in a typical PO and you can simply customize them as required for your business. It’s how most small businesses start out.

The problem with Word, Excel or PDF templates

We’ll assume you know how to customize Word or Excel documents – in my experience, it’s often a headache. A small change somewhere and the whole alignment gets thrown off. That being said, formatting is hardly the biggest challenge. Here are just some of the issues:

  • Purchase Orders almost always require internal approvals before being sent out to the vendor. Getting approval means emailing the PO around. Tracking where exactly the PO is in the approval chain is difficult when it’s in someone’s inbox.
  • They also must almost always be signed. Typically that means print, sign, scan and email. That’s wasteful and inefficient.
  • People often send it to the wrong person. That’s hardly surprising – in many businesses the internal rules for getting the right set of approvals are complex and confusing.
  • Word, Excel and PDF cannot easily validate entries so POs often have errors and omissions. That just slows things down and creates frustration.
  • They can’t pull information from your inventory database or work with other business systems. The result is redundant data entry and delays.
  • Reporting on purchases is also difficult if the information is essentially locked away in a filing cabinet or in email folders.

How an automated purchase order process helps

po-form.pngProcess automation software can digitize your PO workflow so that it’s completely paperless, streamlined and efficient. The advantages are numerous:

  • The purchase order form is filled online on any device. It automatically performs calculations, validates entries and ensures that errors are eliminated.
  • Once completed, the system automatically sends it to the right people so that all necessary approvals are obtained and there’s no way to bypass requirements. It also sends notifications and reminders if the PO is not signed in a timely manner.
  • Electronic signatures completely remove the need to print.
  • Integration with SQL databases and other systems reduces the need to type in information that can be pulled in to the form.
  • It’s easy to track where the PO is at any time via the built-in audit trail and task list.
  • Since the completed purchase order documents and data are stored electronically, it’s easy to search for and find any PO and to report on them.

Automation is easy with frevvo’s visual, low-code platform

Our visual low-code platform is so easy to use that we’re confident anyone can automate purchase orders. We provide numerous completely free purchase order templates that you can try and customize for your needs. The templates include a basic purchase order form, one with SQL database integration as well as multiple workflows that route the PO for approval – some with basic routing and others with conditional routing.

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Give it a whirl. There’s no cost and no credit card required for a fully functional 30-day trial.

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