The importance of purchase orders (PO) is often minimized in document management procedures.
Mostly used to handle the commercial interactions between customers and suppliers, these documents are more than a simple administrative formality.
Many advantages of PO’s can be listed:
At EASI, the use of purchase orders is managed with the accounting software Adfinity. For example, it helps us to manage commercial contracts as well as internal orders.
If we take again the simple example of commercial contracts, a purchase order will be created for the supplier part and another towards the customer.
This will help us to validate the amounts and the quantity of the purchase. Moreover, we will be able to anticipate the margin on a contract and if we extend this for all our commercial deals, we have the possibility to manage our treasury. It will also be helpful for the reporting process of the company.
Another interesting point regarding the customer part: we will use the references given to establish a correct invoice. This will help the customer in understanding what the document is for when receiving it. They can compare the invoice with their specific budget that is reserved for the purchase in question. The document will go more easily through their internal approval cycle and consequently lead to a smoother payment towards EASI.
As a conclusion, purchase orders are useful tools in the daily operation, enabling a better follow-up and higher accuracy. It helps in establishing secure commercial relations with both customers and suppliers.