Is It Time to Automate Your Purchase Orders?

If your business is focused on inventory, you probably fill out purchase orders on a regular basis. Creating purchase orders manually is a time-consuming task. It’s a process that costs money and involves some trial and error. If you’re still manually creating purchase orders, it might be time for your company to invest in an automated purchase order generator.

Here are some important factors to take into consideration as you decide whether or not an automated purchase order system is right for you.

Do you find yourself spending too much time manually creating purchase orders?

You might need to take a look at the numbers to figure how much time is too much when it comes to manually creating purchase orders. Creating purchase orders can be tedious, and you may be losing out on valuable time that could be spent on other important tasks. So, how many purchase orders does your company generate? How many hours of labor are required to achieve that number? An automated purchase ordering system could allow you to drastically reduce the amount of time spent on creating purchase orders.

Are you running into high-cost human errors?

On average, how many mistakes does your company see due to human error? For example, maybe you create purchase orders with Microsoft Dynamics GP and you copy lines from a sales order or another purchase order document to save time on creating a new one. While this might make for a quicker process, it leaves more room for error. Mistakes like lost purchase orders, duplicate purchase orders, or purchase orders with inaccurate information can be costly for your company. Implementing an automated purchase ordering system can eliminate most of the errors that slow down the whole purchasing process.

Compare the costs of mistakes and inaccurate data to the costs associated with implementing an automated purchase order generator. Shop around for the product that’s the best fit for your business. Take into consideration the cost of purchasing the software and the cost of the labor required for smooth implementation. If a purchase order generator is worth it, it won’t be a “set it and forget it” solution — you’ll need to invest some time and energy to be sure that you’ve set up the correct vendor information, inventory data, reorder points, etc., but this investment is more than worth it in the long run.

Are you confident your inventory’s reorder points are accurate?

Reorder points can optimize inventory management by determining when items need to be reordered, and how much needs to be reordered. The catch is, reorder points are only useful if they’re accurate. For example, a reorder point for your inventory in April doesn’t necessarily indicate what December’s reorder point should be. Different variables like seasonal demand, market trends, and product expiration can cause your reorder points to fluctuate, demanding that they be recalculated frequently.

When you set up an automated purchase order generation system and determine its reorder points, it’s important that you really know your inventory. If you’re unsure of what your inventory’s reorder points are, it would be best to invest in some inventory analysis before deciding to implement an automated purchase order system. Inaccurate data is more of a detriment to your purchase order process than a help. And remember — no matter how much confidence you have in your reorder points, no automated purchase order system should be a “plug and play” solution. You should always review the purchase orders that your system generates, but hopefully you can save time and money by allowing the software to do the majority of the work for you.

Want more information on strategic purchasing and restocking? Check out this blog post from SalesPad.