We’ve just come to the tail end of the Holiday season when everyone’s favorite man in a red suit travels across the world in a single night to deliver gifts. While we can only dream of reaching this level of efficiency in our business departments, digitally transforming key business processes like those surrounding purchase orders can give us a semblance of how it feels. Don’t let another season pass you by. With 33% of businesses using automation in 5 or more departments in 2021 up from 15% in 2020, you don’t want to get left behind!
Why Automate Purchase Orders
Many of the processes that involve purchase orders are monotonous, time-consuming, and draining on company resources. Between tracking down paperwork and checking and correcting the various types of errors, purchase orders are estimated to cost an average of $120 per order. The three-way match, for example, often requires accounting clerks to sift through piles of purchase orders, receipts, and invoices to match the line item data of each document. This process is necessary to ensure that deliveries and payments are accurate to what you ordered. Still, the costs involved in maintaining this best practice can often eclipse the risk of a bad delivery.
Approval can also be challenging. Purchase orders are often manually given to the approver for signage through office mail or by placing them on their desk. This process frequently results in documents being lost, misplaced, or ignored as the approver goes about their day-to-day responsibilities. In fact, IDC estimates that document approval costs the average employee 4.3 hours every week. The process of handing papers for approval is also quickly becoming dated as 58% of customers in 2022 expect companies to be able to continue business digitally.
How PO Automation Can Help
Automated three-way matches recognize line item data on your purchase orders, invoices, and receipts and compare them for accuracy. Any discrepancies are noted so that your accounting staff can address them. This process saves tremendous amounts of time that would have otherwise been spent comparing individual documents and looking for the few orders that need correcting. But the time savings don’t stop there. ECM automation software can also drastically reduce the number of errors that occur in the first place. By automatically scanning purchase orders and recognizing the key line item data, this software eliminates several points of human input where errors may occur. Quality PO automation software will also integrate with your ERP system, eliminating double data entry and further reducing the chance of errors.
Automatically routing digital purchase orders to approvers can remove much of the possibility of these documents getting lost in transition while helping to improve other metrics as well. Not only will Automatic PO Routing give you increased visibility into your approval processes, it will also enforce clearly defined company controls and best practices by ensuring only designated approvers sign off on these documents. This will keep you compliant with federal regulations and prevent unauthorized purchases from occurring. Solutions like Square 9’s Business Essentials also allow you to set regular email notifications for outstanding documents that need to be signed.
All of these time-saving tools can reduce costs by helping you make better use of employees’ paid hours. Along with PO Automation, you can also utilize the same solution for automating invoice routing which can help with qualifying for early payment discounts and ensuring you don’t accrue late payment fees.
Square 9 Softworks offers three-way match automation and approval routing in its affordable yet scalable Business Essentials package. To find out how our solutions can digitally transform your accounting department and other critical business areas, visit our website or watch our webinar.
