Posted in Financial Process Automation

How Purchase Order and Purchase Requisition Templates Help Your Business Succeed

Purchase Orders (PO) and Purchase Requisitions are extremely common documents that practically every business uses. They help businesses control costs, ensure that employees cannot bypass business standards and that the business gets the best possible deal. Problems are easier to track down. If the vendor delivers the wrong items, the signed copy of the purchase order proves what the business 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 employees consistently follow internal business norms when making a purchase. It ensures that the necessary checks, reviews and approvals are in place before placing an order.

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

Both documents are part of the overall procurement process but they serve different purposes.

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.

Read more: Purchase Orders vs Purchase Requisitions – how they are different.

Purchase orders are also different from Invoices. While the buyer sends a PO to the vendor to confirm a purchase, the invoice is the other way around. The vendor sends an invoice to the buyer to request payment.

You definitely need both documents but they serve different purposes.

Read more: Purchase Orders vs Invoices – What You Need to Know.

What’s in a Typical Purchase Order?

A typical PO will have:

  • A unique PO number for use by the finance department.
  • The date on which the employee submitted the PO.
  • 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.
  • One or more signature lines for company representatives.

The PO contains all information necessary for the buyer and the seller to agree on what the business has ordered, what is the cost, when delivery is expected and when the buyer expects to pay the supplier. The PO protects both sides if either makes a mistake.

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.

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These 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.

Makes sense. After all, small businesses are, well, small. They don’t have a large I.T. department or resources to invest in skilled technical personnel. e-Procurement solutions like SAP Ariba are expensive and require pricey consultants to implement. Excel and Word are familiar and inexpensive. Naturally, small businesses digitize their purchase orders in those formats.

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 can easily throw off the whole alignment. That being said, the biggest challenge is hardly formatting. Here are just some of the issues:

  • Purchase Orders almost always require internal approvals before they are 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.
  • Each PO usually requires a signature. 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, a complex and confusing set of internal rules determine the right set of approvals.
  • 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

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

  • Employees can fill in the purchase order form 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 to obtain all necessary approvals. There’s no way to bypass requirements. It also sends notifications and reminders if approvers don’t sign the PO 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 system stores the completed purchase order documents and data 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. It includes everything you need to meet real business requirements including:

  • Sophisticated forms with tables, attachments etc.
  • Business rules for dynamic behavior
  • Workflow routing
  • Active Directory integration
  • Custom PDF generation
  • and more.

Read more: How to create a purchase order process that meets real business requirements

Pre-Built Templates Speed Things Up Dramatically

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frevvo provides 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.

You can try a template that routes from Employee to Manager to Finance for processing or try a different one that inserts a VP step in between the Manager and Finance. The VP step only executes if the PO amount exceeds $5,000.

If you want to customize a template, one-click installation is available for Cloud in most cases. The exceptions are security related e.g. when a template uses API keys or security credentials to access a SQL database etc. For obvious reasons, in these cases, we’ll ask you to contact us.

Accelerate Your Business With Automated Purchase Order Processing

There’s no reason to delay. The software is affordable and easy to use. It doesn’t require months-long projects or large investments. It’s easy to meet the most complex requirements. Better yet, you’ll prepare your business for the future since an automated process generates digital data.

With our pre-built templates, you can implement your PO in record time. What are you waiting for? Give it a shot today.

Learn more about purchase order automation

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