Purchase Orders

Purchase Orders

It's a straightforward topic that every business deals with. But don't overlook why purchase orders matter.


We’re not going to get into the nitty-gritty details of what a purchase order is for – you should probably already know that – and there’s going to be some specifics to your company that will vary. But we’re going to have obviously the business, the vendor, the ship to – if that’s any different – the quantity, the item number, description, cost per line item, your subtotal, taxes, all that good stuff.

All important, all relevant, all crucial, but why? What does a purchase order really do? Well, one, obviously that’s how you procure your goods. You send it to your vendor, to your supplier, saying hey this is what I want. But more importantly – this is something that gets overlooked a lot, especially with smaller businesses or businesses just starting out – it is a contract between you and the vendor.

So if there’s ever a dispute, if there’s ever a disagreement about payment, about shipment, even performance, you have something to reference. A lot of times companies just grow organically, as they should, and when they’re small they don’t always think about the necessity of formal purchase orders. There’s almost a unspoken agreement between a small-time and a supplier or a vendor. But the problem with that is it doesn’t keep you safe down the road, if you need information about vendor XYZ about some type of issue, whether it’s financial or otherwise.

And if you’re keeping purchase orders, keeping all those records, that’s good. Now you have something to reference, it is the contract that you’ve been keeping. But, look here; We’ve got all these purchase orders from one company. Here’s another. Here’s a different supplier. Here’s another.

Now maybe you’re filing these separately so you can go through by date – hopefully that’s the case. But you’ve got all of these records. How do you find exactly what you need, according to date? According to vendor? Maybe even according to amount or item or quantity? Well, that’s where we get the automated solution involved.

So, not only are you protecting yourself with a purchase order, you’re also protecting yourself because you know exactly where to find it. You can access it very quickly, and so you’re not wasting time hunting these other things down and you can get back to work. Isn’t that great?

So remember, a purchase order protects you… so protect yourself. And then go one step further; integrate. Get an automated solution and now you’re really protected, because not only do you have the contract in place, you know how to find it if you need it, when you need it.

That’s this Whiteboard Wednesday. I’m James, and I’m all about prote– hmm, that sounds bad.

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