Don’t Pass on Electronic POs

If your organization doesn't already embrace electronic POs (aka e-purchase orders), you may wonder if they affect procurement timelines. Would they add a step to your process? As it turns out, they can make the purchasing process much faster and allow for better financial controls. Electronic POs also provide:

• Better budgeting, forecasting, and planning - You can identify trends and potential savings or negotiation opportunities. And since electronic POs are generated before making purchases, managers and stakeholders can forego approving them if they’ll put you over budget.
• Internal fiscal controls - electronic POs allow you to control the number of employees who are authorized to make purchases. They can also enable you to cut down on maverick spend by limiting which items are allowed to be purchased from which vendor. They'll also help minimize errors.
• Help identifying fraud - You’ll be able to catch if an employee is requesting more money than needed for an order (so they may pocket the difference) and/or determine if they’re ordering items for personal use.

Electronic POs - Part of Your AP Automation Platform

Some AP automation or procure-to-pay companies include electronic POs as part of their platform. These e-POs work a lot like their paper counterparts by including such data as items ordered, price, quantity, special handling instructions, etc. But they are generated, routed, and approved electronically.

In the case of the Nexus procure-to-pay platform, an authorized user – which could be a procurement specialist, a maintenance tech, or a property manager - simply creates an electronic PO by filling in a few fields. It’s then routed automatically to a designated approver(s) for review right within the NexusPayables platform. Once approved, the e-PO is sent directly to the supplier for fulfillment.

Once the order is fulfilled, you can flip electronic POs to invoices. All the PO data will be auto-populated into the invoice – so there’s no double entry. You can also choose the line items you want to include in the invoice.

Many invoice automation platforms can handle a three-way-match: a PO to a receipt to an invoice. This facilitates faster invoice processing and minimizes errors.

The matching process becomes a bit more challenging when the vendor only delivers one or two of the three items or services included in the purchase order and wants payment for those delivered. The PO needs to remain open. ​

But not to worry. Some platforms, like Nexus, can keep the PO open, while paying only for the services that were delivered.

Speed up Procurement by 70%

On the whole, electronic purchase orders allow for added control and visibility. They can be created - and approved quickly - directly from the AP automation platform. Rules can be created to limit the purchase amount and/or require different levels of approvals.

On average, Nexus clients shave 70% off the time spent managing purchasing, partly because they can easily route purchase orders from the properties to corporate and then to accounting (see Business Case).

Thus, if you want to put some controls on the spending process, while also speeding it up, don't pass on the PO.