Purchase Order Myths

Some of the common misconceptions about purchase order include:

Purchase Order Myths

Purchase orders are not important

Most of the Small Medium Enterprises consider purchase orders as not important in their business operation as they do not do lots of orders. However, the purchase order is meant to act as a legal contract between the buyer and the supplier so that the supplier is held accountable in case of a breach of contract. It also cats as proof of the ordered items and when the orders were made.

Purchase orders and invoices are one and the same

Despite the similarity in their features, the two documents serve different purposes. The purchase order is usually drafted by the buyer and indicates to the supplier what the business organization needs. It also gives a detailed decision of the quantity, price or any discounts that were negotiated. On the other hand, the invoice is usually drafted but the seller after the receiving staffs have acknowledged receipt of goods. It also indicates the terms of payments to be met, when the payment is due, guides them in knowing where the payment will be made etc. it also acts as confirmation that the buying company does owe the supplier some money for the goods ordered. Thus, the two documents may look similar but are not the same.

If my current system, works there is no need to change it

The ‘mentality that if it is not broken do not fix it’ is good as long as everything is working properly. Waiting for the eventuality in this respect the break down, may indicate that making any new changes can be too late to salvage the situation. Rather than waiting for the formal purchasing system, use this system as you grow your company. This creates familiarity and better understanding of how it works thus one can figure out in advance how to make things more efficient.

They are boring

Some people are so used to paperwork that they end up being rigid to changes. However, e-procurement software like procurify digitizes you purchase orders and stores them in the cloud. This makes it easily accessible from any devise connected to the internet including your mobile phone. It also gives you a quick review of the business performance.

They are only useful for the purchasing department

The purchase order are essential for budgeting and  decision making. they give you easy access to company’s records of purchases made and helps you keep track of your spending.