The purchase order, PO in short, is a commercial document prepared by the buyer and sent to the seller outlining the details of the goods or services they would like to purchase. The details included in a PO are the type of product(s)/service(s) the buyer wishes to procure, the quantity, the delivery schedule, and – if relevant – a previously agreed-upon price as stated in a sales and purchase agreement (SPA).
After creating the purchase order, the document gets sent over to the supplier for approval. The supplier then receives the PO and assesses whether they can deliver on the request. If the supplier approves the PO, then the document becomes legally binding, meaning that the buyer is obliged to fulfil their payment obligations and that the supplier is obliged to deliver their side of the purchase.
Purchase orders are especially useful for ordering off-the-shelf cataloged items/services from trusted partners.
Keeping the PO creation process simple
Creating a PO is relatively straightforward: You gather the requirements, put them in a document and send it over. The simplicity of this (often informal) process invites carelessness, which can prove costly for a document that may become legally binding.
Internal approvals are often collected to reduce the risk of mistakes, though it is not always clear who should give that approval. Is it the department who requested the PO to be put together? Is it legal or someone in finance? Perhaps all three are needed and changes to the document must be made along the way. Before you know it, something simple has become complex and rather than clarity, the complexity adds confusion. If people follow the process, that is.
Documill turns these informal processes into something that’s standardized, simple, and foolproof. Creating an easy-to-respond-to PO is made easy by formalizing who gets invited, when, and with which role.
Departments that wish to purchase something could fill in a template themselves, for example, before an approver in procurement gets automatically invited to approve the filled in document. Once procurement approves the document, it automatically makes its way to the buyer who can approve the PO with a single click.
Ordering anything, even at large volumes, really can be that easy.
- Use Documill Leap to map out and automatically execute your PO creation process.
- Use Documill Leap to gather input from the department(s) that are looking to make the purchase.
- Collect the required approvals – including the all-important approval from the supplier.
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