Whether you are a freelancer or an enterprise, Purchase Orders are a crucial part of accounting. If you have wondered, whether your small business really needs a purchase order for every little thing, it is a resounding Yes, it does and here is why!
1. Communicate Everything. Together
Purchase order (PO) marks the end of multiple documents, one for price, one for quantity and one later for the delivery address. Capture all these details on a single document and email it to your vendor.
2. Save Paper.. and Work!
We know the amount of paperwork (and therefore paper) you have to do for managing purchases for your business. With a purchasing system in place you can easily get rid of the notebook and sheaves of paper you use to maintain records of your purchases.
3.No Goof-ups
You ask for 50 pens and the vendor sends you 30 “as agreed on the phone” (which you never did). You agree on a certain price but he charges you more , “since the prices have gone up”. Sound familiar? Never again with PO.
4.Order, Receive and Track payments
You can order multiple items, multiple times a day. When you receive the products ordered, use the PO number to search the system and track it in no time. Also with PO, you can link the order number as reference to your bills to know what you have paid for.
5.Above all, Account all your purchases
Any purchase is an expense incurred to your business. Accounting for all of them is important to know how much profit you make. With PO, all your purchases are automatically accounted for and reflected in your books.
PO need to be issued not just to buy stationery but also raw materials. It is a legally binding document which tells you and the vendor what is needed, when it’s needed and at what price. And with PO, you can account for even the tiniest of purchases. (Pins, anyone?)
Use Purchase Orders. Do it the easy way.
This is great insight on purchase orders. I don't think people realize how much they can save by using purchase orders. It's a great way to not get ripped off as well.