purchase orders are important

The 7 Benefits of Purchase Orders (And Why Your Business Needs Them)

Businesses are often satisfied with verbal commitments or email threads when making purchase orders. However, despite their name, there are more benefits of purchase orders than the order itself.

Here are seven of the top benefits of purchase orders and how they’ll improve your business.

1. They help you avoid duplicate orders

If one person in your company is in charge of making purchases, keeping track of orders may be easy. But as you scale up, purchase orders can keep track of what’s ordered, by whom and when.

2. They’re required for some financial audits

Certain financial audits require evidence that managers approved your company’s purchasing decisions. Purchase orders are the ideal documents for these audits.

3. They can help you avoid surprise price increases

If a supplier changes prices between the date of order and date of delivery or invoice, a purchase order clarifies the agreed upon price for both parties and clears up potential miscommunication.

4. They help you keep track of incoming orders

It may seem obvious, but having a well-organized purchase order system makes it easy to identify what products are coming in at any time, making inventory and shipping management simpler.

5. They help keep your invoices in check

When making repeat orders of identical or similar products, matching invoices to orders can be tedious without documentation. Including a purchase order number on the invoice avoids this confusion.

6. They ensure clear communication

At the core, purchase orders clearly communicate all the details of a purchase. By having every detail clarified, laid out and documented, you avoid potential conflict or confusion in the future

7. They’re legal documentation

If there are ever any disputes over what was ordered, or the agreed upon price, purchase orders serve as legal documentation that can be enforced. Best of all, they protect both parties.


Find Out Why Purchase Orders Are A Key Tool For Your Organization

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