Ever made a serious spending mistake and wish you could press a real-life-undo-button?
Unfortunately spending mistakes often have serious real-life-consequences. Consider now that you are in charge of company spending and responsible for everyone else’s spending blunders. A recent study found that more than 80% of companies fall victim to spending mistakes annually.
When we look at the purchase order systems used by these companies, it all starts to make sense.
Upon closer examination, a correlation between two key factors becomes evident. More than 80% of companies make spending mistakes annually and more than 70% don’t use an online PO system or ERP software. It stands to reason that more spending mistakes are made when using a paper based or Excel based PO system. This conclusion was easily drawn, but how exactly does a PO system help you control company spending?
Management gets control over company spending
With a dedicated online PO system, management is in complete budgetary control. Purchase Requisitions have to get rubber stamped before they get authorized. This might seem like micro-management at its worst but approval routing automation can be set up, to involve different levels of management, with allocated sign-off rights to fit your company’s needs. With this 1 function in place, you are already combating rogue spend and company fraud.
Minimize on matching discrepancies with all your documents in one place
Having your quotation, invoice and receipt attached to the PO itself, helps you to match charges vs actual services/products delivered. This puts you in the position to detect invoicing discrepancies and take measures to drive down variances.
Prevent over purchasing
Raising a purchase requisition, with the knowledge that management will have to sign it off, forces the requester to take a few seconds and really think about the purchase. Considerations like justification and quantities of purchase are now already surfacing in the mind of the person raising the order.
Better cash flow management within the business
As soon as purchase orders are collated, they become a useful tool for managing cash flow within the business. ‘Cost of sales’ figures are available quickly and supplier credit limits can be managed.
Hence: a dedicated online PO system = spend control.
For more info on how a dedicated online PO system will help your company, sign up for a free trial at Procurementexpress.com.