Why a Purchase Order Template is Critical to Business Success
Have you ever run into problems when ordering products for your business? Maybe the order came in late (or not at all), the quantity delivered didn’t match what you ordered, or the item numbers were wrong.
These are all common problems your business might face without using the proper paperwork when submitting orders to your vendors. Sure, you might have known your sales rep for so long that ordering by phone or email feels like a convenience, but having formal paperwork for confirmation can help streamline the process and prevent issues from arising. This is where a purchase order comes into play.
What is a purchase order?
A purchase order (PO) is a legally binding document that a buyer submits to a seller to place an order for goods. Once the seller has accepted the purchase order, it forms a contract that clearly expresses the intent of the buyer and protects the seller in case the buyer refuses to pay for the goods.
Purchase orders are essential to ensure an accurate order is placed with record of the date of purchase and confirmation of the seller’s receipt of the order. This can prevent any miscommunications and ensure that your orders are fulfilled correctly.
Basic elements of a purchase order template
The following are standard elements of a comprehensive purchase order.
- Unique purchase order number for accounting and inventory usage
- Contact information for both buyer and seller
- Date purchase order was submitted
- Payment terms
- Shipping address, carrier preferences, and additional details
- Details of items ordered including quantity, item number, description, unit price, and total cost
- Shipping, tax, and other fees
- Order total
- Signature line for approving representative of the company
- Any additional terms and conditions
- Date seller must notify buyer by if there are any problems fulfilling the order
As you can see, a purchase order can streamline the ordering process, making it simple for you, the buyer, to communicate your order clearly to your vendors, and for your vendors to correctly process your orders. If a mistake is made on the vendor’s side while processing the order, you will have the approved purchase order on your side to prove where the mistake was made, potentially saving you the additional costs in getting the order fixed.
Getting started with purchase order templates
If you are ordering products for your business on a regular basis, a purchase order template will help minimize the time spent on sending orders. Instead of having to create a new document each and every time, the template streamlines the process and ensures uniformity. Also, having a standard template will prevent you from having to enter the same details each time you send an order, such as typing out your shipping address or terms and conditions over and over. It will also reduce the likelihood of making mistakes – verify the information on your template once, and it will stay the same each time you create a new purchase order.
Most small businesses start out by using templates from Microsoft Office for use with Word or Excel to create manual templates. These free downloadable templates generally contain all of the standard purchase order fields that a business would need to submit orders to their vendors.
All you have to do is customize the information in the appropriate sections of the template, and you will have a professional purchase order to submit to your vendors.
The trouble with manual templates
There are a few downsides to using manual templates. For starters, if you’re not an intermediate to advanced user of Microsoft Word or Excel, you might run into issues if you need to customize the template in any way. Sometimes editing the size of a specific field will throw off the alignment of the entire template. Or if the information you need to enter in a particular area is longer than the template allows for, the entire template will shift to compensate, moving things into positions you don’t want them to be in.
Beyond formatting issues, there’s also the trouble with organization. Whenever you need to reference a purchase order, you will need to search for it in folders within your filing cabinet or desktop. What’s worse is when you are taking over for someone later down the road who did not organize purchase orders properly, or organized them in a nonsense kind of way. There will always be those random situations where you need to find a purchase order from years ago that has been moved into the archive file boxes in the storage room or on someone’s local backup disk.
And, of course, there is the reporting. Creating reports from your manual purchase orders will require more manual work, and there’s nothing worse than when your boss needs answers immediately, such as when he’s on the phone with a particular vendor and wants to go over the current open orders you have with them.
How inventory control software can help
Using a purchase order template within inventory control software like inFlow Cloud can eliminate all of the above-mentioned hassles of manual purchase order templates. Once you have entered information about your company and your vendors, you can use simple drop-down arrows to quickly fill out your purchase order. You can conveniently email your purchase orders by saving them as a PDF and attaching them using your favourite email client. You can also easily print out a hard copy to keep at the office.
Because your purchase orders will be kept within the software’s database, you will be able to quickly pull up the purchase order you need to reference based on the order number, vendor, status, and other criteria.
Whenever your boss asks you for reports showing the status of outstanding purchase orders, total year-to-date purchase orders made to one vendor, and a listing of the products you have ordered from vendors, you will be able to quickly make the report using convenient dashboard and reports.
Whether you are a small business that is just starting out or a larger business that just needs a better way to streamline the purchasing process, be sure to give inFlow Cloud a try.