Best Practices for Purchase Order Tracking and Follow-up

Effective purchase order tracking and follow-up is crucial for businesses to maintain efficient operations and avoid errors or delays in the procurement process. In this blog, we’ll discuss best practices for purchase order tracking and follow-up, as well as the benefits of using EPOS solutions and purchase order software for managing purchase orders.

Introduction 

When businesses need to purchase goods or services, they typically go through a purchase order process. A purchase order (PO) is a document issued by the buyer to the supplier, indicating the type, quantity, and price of goods or services to be delivered. 

PO tracking and follow-up involves monitoring the progress of a PO from the time it is issued until the goods or services are received and paid for. This process ensures that goods and services are delivered on time, invoiced correctly, and paid for promptly. 

Effective PO tracking and follow-up is essential to maintain an efficient procurement process. However, it can be challenging to manage multiple POs, especially if they involve multiple suppliers, delivery dates, and payment terms. Therefore, it’s essential to establish best practices and use technology to streamline the process.

Purchase Order Process Overview 

The purchase order process is critical for creating and issuing purchase orders to suppliers for the goods or services needed by the business. The purchase order process typically includes several steps, such as identifying the need for goods or services, selecting the supplier, negotiating terms and conditions, and creating the purchase order document. 

Once the purchase order is issued, it’s important to track its progress and ensure that the goods or services are delivered on time and invoiced correctly. Effective purchase order processing can help businesses manage their procurement operations efficiently, maintain positive relationships with suppliers, and optimise their financial management. 

Before we dive into best practices for PO tracking and follow-up, it’s crucial to understand the Purchase Order process’s key stages. Here’s an overview: 

  1. Purchase requisition: A purchase requisition is a request from a department or employee to purchase goods or services. 
  2. PO creation: A PO is created by the purchasing department or procurement team and sent to the supplier.
  3. PO approval: The PO is approved by the authorised person or department, such as finance or operations. 
  4. PO delivery: The supplier delivers the goods or services according to the PO’s terms. 
  5. Receipt confirmation: The buyer confirms receipt of goods or services and approves payment. 
  6. Payment: The buyer pays the supplier according to the agreed payment terms. 

Best Practices for Purchase Order Tracking 

To effectively track POs, it’s important to establish clear communication channels, utilise technology for automation, regularly update the PO status, assign PO ownership, and establish escalation procedures. Let’s take a closer look at each of these best practices: 

  1. Establishing clear communication channels: It’s essential to establish communication channels between the buyer and the supplier to ensure that both parties are aware of the PO’s progress. This can include email, phone calls, or a messaging platform. 
  2. Utilising technology for automation: Many tasks involved in PO tracking and follow-up can be automated using technology, such as PO tracking software. This can streamline the process, reduce errors, and free up time for employees to focus on other tasks. 
  3. Regularly updating the PO status: Keeping track of the PO status is crucial to avoid delays and ensure that the supplier is meeting the delivery timeline. Regular updates can also help identify potential issues before they become major problems. 
  4. Assigning PO ownership: Assigning PO ownership to a specific person or department can ensure accountability and avoid confusion. This person or team can be responsible for tracking the PO’s progress and communicating with the supplier. 
  5. Establishing escalation procedures: If issues arise, it’s important to have escalation procedures in place to address them quickly. This can include involving senior management, changing suppliers, or adjusting delivery timelines. 

Best Practices for Purchase Order Follow-up

In addition to tracking the progress of POs, it’s important to follow up with suppliers to ensure timely delivery and payment. Here are some best practices for PO follow-up:

  1. Monitoring PO delivery dates: Keeping track of delivery dates is critical to ensure that the supplier delivers goods or services on time. This can help avoid delays in the procurement process and ensure that goods are available when needed. 
  2. Establishing a system for receipt confirmation: Once goods or services have been received, it’s important to confirm receipt and approve payment. Establishing a system for receipt confirmation, such as a digital signature or delivery confirmation, can ensure that the buyer is aware of when the goods or services were received and can approve payment promptly. 
  3. Regularly reviewing invoices and payments: It’s important to review invoices and payments regularly to ensure that they are accurate and timely. This can help avoid payment delays and potential disputes with suppliers. 
  4. Maintaining a positive relationship with vendors: Maintaining a positive relationship with vendors can help ensure that they prioritise the buyer’s POs and deliver goods or services on time. This can include regular communication, prompt payment, and resolving any issues quickly. 

EPOS Solutions for Purchase Order Tracking and Follow-up 

EPOS (Electronic Point of Sale) solutions can provide businesses with an efficient and streamlined way to manage POs. EPOS systems can automate many of the tasks involved in PO tracking and follow-up, such as updating the PO status, sending reminders, and generating reports. 

Some benefits of using EPOS solutions for PO management include: 

  1. Improved efficiency: EPOS systems can automate many tasks, reducing the time and effort required to manage POs. 
  2. Increased accuracy: EPOS systems can help avoid errors in PO tracking and follow-up, ensuring that goods and services are delivered on time and invoiced correctly. 3. Real-time updates: EPOS systems can provide real-time updates on the PO status, allowing buyers to track delivery timelines and address issues promptly. 4. Cost savings: EPOS systems can reduce the need for manual labour, paper-based processes, and potential errors, resulting in cost savings for businesses.

 

Benefits of Effective Purchase Order Tracking and Follow-up

Effective PO tracking and follow-up can provide several benefits to businesses, including: 

  1. Reduced errors and delays: Effective PO tracking and follow-up can help avoid errors and delays in the procurement process, ensuring that goods and services are delivered on time and invoiced correctly.
  2. Improved vendor relationships: Maintaining positive relationships with vendors can help ensure that they prioritise the buyer’s POs and deliver goods or services on time. 
  3. Better financial management: Effective PO tracking and follow-up can help businesses manage their cash flow, avoid payment delays, and optimise their procurement processes. 

Tools and Resources for Purchase Order Tracking and Follow-up 

In addition to EPOS solutions, there are several other tools and resources that businesses can use to manage POs effectively. These include: 

  1. PO tracking software: PO tracking software can help automate many tasks involved in PO tracking and follow-up, such as updating the PO status and sending reminders. 
  2. Vendor management systems: Vendor management systems can help businesses manage their relationships with suppliers, including tracking POs, monitoring performance, and resolving issues. 
  3. Data analytics tools: Data analytics tools can help businesses analyse their procurement processes, identify areas for improvement, and optimise their operations. 

Conclusion 

Effective purchase order tracking and follow-up is crucial for businesses to maintain efficient operations and avoid errors or delays in the procurement process. By establishing best practices, using technology such as EPOS solutions, and regularly reviewing and improving their procurement processes, businesses can improve their efficiency, vendor relationships, and financial management. 

It’s important for businesses to choose the right tools and resources to support their PO tracking and follow-up efforts, whether that’s through EPOS solutions, PO tracking software, or data analytics tools. By leveraging technology and implementing best practices, businesses can optimise their procurement processes and achieve greater success. 

In summary, effective purchase order tracking and follow-up is essential for businesses to manage their procurement processes efficiently and avoid errors and delays. By establishing best practices, leveraging technology such as EPOS solutions, and regularly reviewing and improving their processes, businesses can optimise their procurement operations and achieve greater success.