Posted in Procurement Automation

How to Automate the Purchase Order Process: Step By Step

More than half of all Chief Procurement Officers admit that automation technology isn’t being used enough in the purchase order process. This is posing a huge problem.

Not only are manual purchasing processes slow and clunky, but they’re also error-prone. This can result in delays in procurement and extra costs.

Purchase order process automation helps counteract these manual processing issues. Faster and more efficient, purchase order automation can streamline your purchasing processes.

But how do you automate the purchase process?

Here’s a step-by-step guide.

Want to jump ahead? Click here:

What Does The Purchase Order Process Look Like?

A purchase order (PO) is the official document that’s sent from a buyer to a vendor to request an order of goods. 

The purchase order process is part of your procurement workflow.

While the procurement workflow refers to the end-to-end process from requesting a purchase to order fulfillment, the purchase order process starts once a purchase request has been approved.

The purchase order process can be as basic or as complex as necessary, but it generally has the same flow. 

Either the purchasing team or the financial department creates a purchase order. A superior staff member approves it. Sometimes this will be approved by other team leaders, especially if it’s a large purchase amount.

flowchart of a purchase order process

(Image Source)

Following approval, the purchase order is sent to the supplier who will supply the goods or services and send over a vendor invoice and payment terms.

After payment processing, you file all relevant documents to keep an up-to-date record.

Why Automate Your PO Process?

To put it plainly, manual purchase orders are clunky.

Not only are they inherently slow, as paperwork is filled out by hand, but delays in approvals can also hold up the whole workflow.

On top of that, manual purchase order processing is prone to error. Whether it’s illegible handwriting or incorrect data entry, mistakes slow everything down even further. Errors can also lead to wrong or duplicate purchases.

These mistakes often result in extra costs that go toward paying for more staff hours in order to remedy these issues.

Purchase order automation can streamline your purchase order system and cut out bottlenecks. This should improve the efficacy and efficiency of your purchasing process. 

Automated purchase order software will speed up repetitive tasks. According to 54% of employees, the automation of menial tasks could save your staff up to 240 hours per year.

What’s more, half of organizations agree that automation decreases manual errors.

Since fewer labor hours are needed for repetitive and remedial work, purchase order automation can cut back on labor costs. 

According to procurement professionals, cost-effectiveness is the number one benefit of switching to digital procurement processes.

Plus, manual processes aren’t as dynamic as automated workflows. 

With manual PO forms, there’s no way to hide information that is irrelevant to certain roles or to customize instructions based on the scenario.

With automated purchase order software, you can create dynamic forms that streamline the logistics of the PO process. That way, each party only sees the information and instructions that are relevant to them when it’s appropriate.

You’ll also find that record-keeping is harder with manual processes. 

Not only does manual record-keeping take longer, as there’s lots of data entry, but there’s also a higher chance for errors in the audit trail. That can be problematic when it comes to compliance.

Purchase order software integrates with your record-keeping systems to keep everything up-to-date. As all data in the workflow is automatically validated as you go, you can guarantee that these records are correct.

Technology firm Pivotal modernized its purchase order process with purchase order workflow software.

Previously, Pivotal’s procurement team was manually managing its purchase order approval process through email. 

By implementing frevvo for purchase order management, Pivotal was able to automate its entire purchase order system.

The PO process pulls cost centers from Google Sheets to automatically populate purchase order forms. 

From here, these forms are conditionally routed to the correct approver based on information within the form. All this is done to speed up the purchase approval process.

Not only do purchased goods now arrive on time, but the purchasing department no longer experiences paperwork errors or purchasing process delays.

How To Automate Your PO Process With Frevvo

Automating your PO process with purchase order workflow software brings countless benefits, including speedier processing and cost-savings.

Here’s a quick guide on how to automate your PO process with frevvo’s no-code software.

1. Choose a Pre-Built Purchase Order Template

As with most purchase order software, it’s possible to build your digital purchase order from scratch with frevvo.

To make it easier, frevvo provides a full library of pre-built templates. Choose a pre-built purchase order template based on your unique purchase approval process.

purchase order workflow templates on frevvo

In some cases, you may simply need a basic purchase order process template. If there are no conditions in the approval process, a basic template will suffice.

But, some purchasing processes require complex routing. For example, you may need a conditional approval process based on the cost of purchased goods. In this case, choose a template for a conditional PO process.

Remember, each purchase order template, and approval workflow is customizable.

2. Customize Workflow Routing

Next, customize the workflow so that your purchase order automatically routes through the appropriate steps.

You can add steps or take them away to tailor your purchase order approval process. 

You can also add and customize conditional steps in the workflow that only activate if the conditions are fulfilled. 

For example, you may add a conditional step that only routes your PO to a VP if the amount is over $100,000.

frevvo conditional purchase order workflow

You can also customize information at each step. 

For example, you can assign steps to particular employees or managers. Alternatively, you can alter the wording in the messages and notifications.

workflow editing on frevvo

At this stage, you can add escalations to prevent delays in the workflow. Escalations help to prevent bottlenecks where one person is holding up the procurement process.

For example, if an approver fails to sign a pending approval, an escalation will pass it on to someone else.

Safety Technology Holdings switched to an automated, complex purchase approval workflow to streamline its purchasing process.

Previously, the technology company had been using a mix of InfoPath, email, and custom-built applications to route purchase orders to either the CFO, VP, or CEO, depending on the invoice amount. Not only was it slow, but it was also error-prone.

Now, Safety Technology Holdings uses frevvo and enjoys complex routing that automatically sends purchase orders to the relevant approvers and suppliers. 

Automatic notifications and reminders that prevent delays and escalations are in place as a safety net.

3. Build a Dynamic PO Form

Build an online purchase order form with dynamic behaviors. 

Using the drag-and-drop menu, you can customize pre-built purchase order template forms or create your own from scratch. 

Add new fields, triggers, and messaging. Set these fields to show up for relevant roles only.

drag and drop form builder panel on frevvo

Template forms are already programmed to auto-populate with relevant data when connected to your SQL database. This can both save time and reduce data entry mistakes. Forms will auto-validate to make sure no incorrect data passes through.

example of automatically populated PO form field on frevvo

Plus, dynamic forms will perform automatic calculations to prevent mathematical errors.

OESJ Central School District is thriving, thanks to frevvo’s digital dynamic purchase order forms.

Before, the PO process used paper and outdated processes. Often, teachers had to hand-deliver paper forms and wait for manual approvals. If there were mistakes, forms would be handed back, causing significant delays.

By switching to frevvo’s digital forms, OESJ easily created a dynamic PO form with the drag-and-drop designer. 

Thanks to frevvo’s complex routing and integration with Google Apps, forms head to the correct location automatically based on the information contained within.

Now that everything is filled in online and approvers can sign electronically, there are far fewer mistakes, and the whole process is much faster.

4. Create Business Rules for Dynamic Behavior

Once you’ve built the look and feel of a form, you need to program dynamic business rules so that your PO form behaves as you want it to.

Set business rules to control what each user sees, how the form routes, and the calculations that occur.

frevvo workflow business rules

You can add and customize the existing steps as well as adding actions to each step.

5. Generate PDF Documents

Sometimes it’s necessary to generate PDFs for the purchase order process. Often, vendors will want custom PDFs for their records. Equally, you may want to save PDFs to Google Sheets for simple record keeping.

Luckily, dynamic PDF generation is simple with frevvo.

You can either generate PDF documents with information from your workflow or you can upload your own templates.

While PDFs are manually editable, these documents will pull relevant data into the forms automatically to speed up data entry. Calculations will occur automatically to reduce errors and accelerate completion.

Dynamic PDFs fully support electronic signatures to make approvals easier.

6. Set Access Control

Set access control on your workflow so that unauthorized personnel can’t initiate the purchase order process.

You can either set entry so the whole procurement team can access the workflow or delegate access to certain team members only. It’s even possible to assign access by individual or role.

workflow access controls on frevvo

Dynamic controls enable you to assign access to different elements of the workflow depending on the role of the person in your purchasing department.

Assign team members that can start the workflow, view and edit submissions, and access the audit trail. You’ll be able to limit who can edit the design of the workflow.

7. Integrate With SQL Databases to Auto-Populate Forms

To access the full capacity of automatic purchase order software, you need to connect your SQL database. 

With the Database Connector, forms will automatically pull information from your databases to auto-populate and auto-validate.

Not only does this accelerate data entry significantly, but it also helps reduce data entry errors. 

This is how ONEIL was able to speed up its purchasing process.

Previously, purchase requests and purchase orders had been run through InfoPath. The process was cumbersome, and there were lots of unexplained errors.

By integrating its SQL database with frevvo, ONEIL created dynamic purchase request forms and purchase order forms that pre-populate automatically. 

Thanks to the auto-population and auto-validation features, data entry is now more streamlined, there are fewer errors, and records are kept complete and up-to-date.

8. Create an Automated Audit Trail

To avoid compliance issues, your audit trail should be up-to-date, correct, and complete at all times.

The problem is that if you are updating your records manually, you may miss information, enter incorrect data, or add duplicate records.

Purchase order software like frevvo will automatically integrate with your record-keeping systems to keep your audit trail updated and correct.

Frevvo can post directly to your database or integrate with a number of different document management systems, including Sharepoint and Google Drive. You can also integrate frevvo with your network drive or save records directly to frevvo’s built-in repository.

Conclusion

Now that you know how to automate the purchase order process with frevvo, there’s no excuse for clunky manual purchasing processes.

Instead, improve efficiency, reduce errors, and cut out delays with purchase order workflow software.

Don’t just wonder about the benefits. Automate your purchase order process today with frevvo’s free trial.

Author:

Ashish Deshpande has worked in the process automation space for over 20 years. He has been instrumental in successfully deploying frevvo’s software at hundreds of organizations such as HBO, New York University, and Boston Public Schools. Ashish has contributed to leading publications such as Forbes, business.com and readwrite.com. Ashish received a PhD in Computer Science from Yale University, and a Bachelor of Technology in Computer Science and Engineering from the Indian Institute of Technology, Mumbai, India.

Leave a Reply

Your email address will not be published. Required fields are marked *