Top 5 Purchase Order Management Tools

In the fast-paced and dynamic world of business procurement, staying organized and efficient is crucial for maintaining smooth operations. Purchase Order Software plays a pivotal role in automating and streamlining the purchase order process. It helps businesses efficiently handle the procurement cycle from order creation to payment tracking, ensuring that everything runs smoothly, on time, and without errors. In this article, we aim to provide a comprehensive understanding of purchase order software, covering its core features, benefits, key considerations for selection, and implementation process.

What is a Purchase Order Software?

Purchase order software is a type of financial software that helps you automate your purchase order creation, approval, tracking, and sharing with suppliers. It brings efficiency, compliance, and transparency to your procurement processes. Purchase order automation eliminates manual work and minimizes the risk of errors and delays.

Benefits of a Purchase Order Management Tool

A purchase order management tool is a game-changer for businesses looking to streamline procurement operations and enhance efficiency. It automates purchase order process by eliminating manual paperwork, enhances visibility into spending, and ensures faster approvals. Here’s a closer look at the key benefits it offers:

1. Efficiency

Purchase order software significantly improves the efficiency of procurement processes by automating repetitive tasks.

• Supplier or hosted catalogues eliminate the need for manual data entry. It reduces errors and time spent on manually filling out order details and boosts productivity.
• Automated workflows help businesses speed up their procurement cycles. It ensures that purchase requisitions are processed more quickly and deliveries are made on time.
• Dynamic approval routing ensures that orders go through relevant approval chains and are approved without unnecessary delays.

2. Cost Savings

Purchase order automation helps businesses identify and capitalize on cost-saving opportunities:

• Procurement reports and analytics allow businesses to track spending patterns and identify areas where they can reduce costs by negotiating better terms with suppliers or switching to lower-cost vendors.
• Real-time inventory tracking and stock level alerts help businesses avoid the costs associated with overstocking (e.g. storage fees) and stockouts (e.g. lost sales or production delays).

3. Accuracy

Accuracy is critical in procurement. Automated PO software ensures that orders are accurate, consistent, and aligned with business requirements.

• Automation reduces the chances of errors such as duplicate orders, incorrect pricing, or miscommunication with suppliers. It helps businesses maintain accurate records.
• PO software validates orders against inventory or vendor catalogues to ensure that only the right items are ordered in the right quantities.

4. Visibility

With purchase order software, businesses gain greater visibility into their procurement activities:

• Purchase order software allows businesses to track the status of every order, providing real-time updates on order placement, approval, shipment, and delivery.
• It keeps detailed records of all past orders and supplier performance. PO systems help you to make data-driven purchasing decisions.

Core Features of Purchase Order Software

To fully appreciate and realize the value of the purchase order software, you need to understand its core capabilities and functionality. We've listed the features that are designed to automate and streamline different stages of the procurement process.

1. Order Creation and Management

Purchase order software allows businesses to create orders quickly and easily using pre-designed templates. PO templates include all the necessary fields, such as vendor information, product descriptions, quantities, pricing, and delivery terms. You can customize these templates to meet your process and policy needs.

2. Vendor Management

Effective vendor management is critical to successful procurement. Purchase order software helps businesses to build strong supplier relationships and optimize their supplier base. It typically offers,

• A centralized supplier database where businesses can store essential supplier information such as contact details, payment terms, delivery schedules, and past purchase histories. It ensures that all supplier data is organized and easily accessible.
• The PO software helps businesses track supplier performance over time. You can measure, monitor, and optimize metrics such as on-time delivery, product quality, and responsiveness to build better supplier relationships.
• Many purchase order software solutions offer integration with vendor catalogues, allowing users to view supplier products directly within the system. It helps to eliminate off-contract purchases and forces users to select items from a pre-approved catalogue.

3. Approval Workflow

The purchase order system ensures that all purchase orders are properly reviewed and approved before being sent out to suppliers. It facilitates this by,

• Enabling you to automate and set up a multi-level approval process. Automated workflows ensure that POs go through the appropriate channels before being finalized.
• Purchase order software routes orders to the appropriate approvers based on preset criteria like spend value, department, and requester role. It eliminates delays caused by manual routing and ensures faster approval cycles.
• It allows administrators to set role-based permissions and ensures that only authorized employees can create, approve, or modify purchase orders. Role-based permissions improve security and compliance.

4. Inventory Management

Effective inventory management is crucial to prevent over-ordering or stockouts, both of which can lead to lost sales and operational inefficiencies:

• Purchase order software can integrate with inventory management systems to provide real-time visibility into current stock levels. It allows you to raise purchase orders only when the stock is running low or when there's a need to replenish inventory.
• It can trigger alerts when inventory levels reach predefined thresholds to auto-create or prompt users to create new purchase orders before stock levels run too low. Auto triggers and alerts help you to prevent stockouts and disruptions in production or sales.

6. Reporting & Analytics

Data-driven insights are crucial for optimizing procurement processes. Purchase order automation tools often include robust reporting and analytics features:

• It keeps a detailed record of all past purchase orders, enabling you to analyze your spending patterns, identify cost-saving opportunities, and negotiate better terms with your suppliers.
• PO software provides the ability to generate customizable reports, such as spending trends, order volume, and supplier performance.

7. Integration

To maximize the utility of purchase order software, it must integrate well with other business systems. Integrating your purchase order platform with an ERP system allows your business to synchronize procurement activities with other functions, such as accounting, sales, human resources, and supply chain management.

Key Considerations for Selecting Purchase Order Software

Choosing the right purchase order software requires careful consideration of several factors:

1. Business Size & Needs

The PO software you choose will depend on the size of your business and your specific needs. If you're a small business, a simple and affordable solution with basic features for order creation, vendor management, and approval workflows will be a great fit. However, larger enterprises need a more advanced system with customizable workflows, complex reporting, and deeper integration with existing enterprise systems.

2. Integration with Existing Systems

Ensure that the software integrates seamlessly with your current systems, such as ERP, inventory, and accounting software. Integration reduces manual effort, ensures that all systems are synchronized, and improves data accuracy and efficiency.

3. Customization Options

Look for a purchase order software that offers customization options, allowing you to tailor workflows, approval processes, and reporting to fit your business needs. This flexibility will ensure the software works well within your existing procurement processes.

4. Total Cost of Ownership

The total cost of ownership is the overall costs the software will incur in its entire lifespan, including subscription cost, implementation, ongoing maintenance, support, and upgrades. Understanding the TCO of the purchase order software will help you to make informed investment decisions and avoid any surprises in the future. For example, a discount on your initial implementation or subscription cost and a higher cost for ongoing support, when you look at the initial cost involved, will look like a great deal. However, when you review it holistically, the deal will look a lot less compelling. So, consider the total cost of ownership when comparing the different software vendors.

5. Security Features

In procurement, you handle sensitive data like financial and supplier information, so it's essential to have robust security features in your purchase order software. It is crucial for protecting sensitive data, preventing financial losses, and ensuring compliance with regulations. PO software should have capabilities like data encryption, authentication, and role-based access control to safeguard supplier details, financial information, and other sensitive data. Strong security features help prevent fraud, such as false invoices and duplicate payments, and offer real-time monitoring to detect suspicious activities quickly.

6. User Experience (UX)

One of the key reasons why most technology investments fail is the lack of user adoption. The primary reason for employees to resist changing to a new system is when the PO software is difficult to learn and use. So, UX should be one of the important criteria when choosing your purchase order software. An intuitive and easy-to-use PO system improves efficiency and process compliance and reduces frustration.

Top 5 Purchase Order Tools for 2024

Choosing the right purchase order software is essential for streamlining procurement, improving financial control, and ensuring smooth supplier relationships. Different platforms cater to varying business needs - some excel in customization, others in automation or integrations.

Here are five top-rated purchase order software solutions based on user feedback and reviews.

Procurify

Procurify simplifies and automates the procure-to-pay process, providing businesses with greater visibility and control over their spending. It's an AI-powered platform that aims to streamline purchasing and accounts payable in one tool. Procurify emphasizes proactive spend management, helping businesses move faster and make smarter spending decisions. Here's a summary of its key modules, features, and benefits:

Key Modules

• Purchasing: Manages the entire purchasing process, helping to reduce rogue spending and ensure confident buying decisions.
• Accounts Payable: Automates workflows like invoice capture, three-way Matching, and payments. It reduces errors and saves time.
• Expense Management: Captures, approves, and tracks all business expenses in one place, with tools like Spending Cards for proactive expense control.

Ratings

4.6 out of 5 stars on G2

Key features

• AI-Powered Automation
• Customizable Workflows
• Pre-built and Custom Integrations
• PunchOut Integration
• Mobile App
• Spending Cards
• Real-Time Reporting
• Three-Way Matching

Strengths

• Users appreciate the intuitive, easy-to-navigate interface, which makes the purchasing experience seamless.
• The support team is highly praised for being responsive and helpful, with users noting excellent relationships with the implementation and support staff.
• Strong integration capabilities, especially with Amazon PunchOut, and compatibility with major ERP systems like NetSuite and QuickBooks.

Cautions

• Some users find built-in reports lacking granularity, requiring extra work in Excel for more detailed analysis.
• Complaints include limitations in the receiving module, such as the inability to reject items without triggering a new approval process.
• Some customers wish they could consolidate multiple orders into one request and make PO amendments after receiving items.

Precoro

Precoro offers a platform for managing intake, purchasing, and analytics, with a focus on achieving savings through transparent, predictable, and automated workflows. Precoro is designed to be intuitive and help companies achieve procurement excellence and budget efficiency.

Key Modules

• Request Management: Precoro facilitates the creation, collection, and management of requests, including purchase requisitions, requests for proposals, warehouse requests, invoice payment requests, reimbursement requests, and new vendor requests.
• Approval Workflows: It allows the creation of unlimited approval workflows using a workflow scenario builder with document-based and vendor approvals. It routes documents to the right decision-makers and provides a clear audit trail.
• Order Management: Automates the creation of documents like purchase orders, invoices, and receipts, ensuring they are easily trackable.
• Spend Reports: Offers tools for tracking, analyzing, reporting, and auditing operations, including supplier and item management.
• Invoice Management: Manages the approval, revision, and processing of invoices within the platform

Ratings

4.7 out of 5 stars on G2

Key Features

• Order Management
• Approval Workflows
• 3-way Match
• ERP Integration
• Data Security
• Communication
• Data Migration
• Team Collaboration
• Reports and Analytics

Strengths

• Precoro is frequently praised for its user-friendly interface, which is easy to navigate for both end-users and administrators.
• It aims to provide support without chatbots or long wait times and claims to answer 96% of questions within 2 hours.
• Precoro is versatile and can adapt to various procurement models and approval flows, making it suitable for different organizational needs. Users can customize approval workflows, budgets, and reports.
• It can connect with ERP systems and other business tools, such as NetSuite, QuickBooks, Xero, and Sage. 

Cautions

• Some users have reported that certain features are preset and cannot be changed, requiring them to find workarounds.
• Reporting tools could be improved as users noted that the current reporting is simply a data dump.
• It cannot handle vendor advance part payments.
• The conversations are siloed within each process or module and don't carry over to other processes, from the requisition to the purchase order or the invoice.

Order.co

Order.co helps you streamline everything from sourcing products to managing payments, with a focus on providing visibility and control over spending. Order.co is a good fit for smaller organizations that need a simple and easy-to-use platform for managing their purchases of physical goods. It is a guided B2B marketplace that aims to eliminate manual purchasing and payment tasks, offering a user-friendly experience and customizable options. Order.co helps to manage purchasing, payments, approvals, and budgets.

Ratings

Key Modules

• Purchasing: Centralized platform for managing orders and vendors.
• Payments: Centralized payment management, including monthly consolidated bills.
• Approvals: Customizable approval workflows.
• Budgeting: Customizable budget controls.
• Financial Offerings: Access to capital advances, net terms, and virtual cards.
• Reporting: Real-time spend reporting and data analysis.
• Integrations: Integrates with various accounting and business platforms.

Key Features

• Centralized Ordering
• Payment Management
• Vendor Management
• Strategic Sourcing
• Invoice Management
• 3-Way Matching
• Real-Time Spend Reporting
• Automated Approval Workflows

Strengths

• Order.co provides a centralized location for purchasing, eliminating the need to use multiple supplier websites.
• The platform enables users to track purchases, budgets, and rewards easily.
• Order.co has excellent customer service and a friendly and knowledgeable support staff.

Cautions

• Order.co does not allow a single checkout when purchasing goods from multiple vendors. It requires separate orders for each vendor.
• It offers simpler and more user-friendly features for basic purchasing needs and can't handle complex procurement requirements.

Coupa

Coupa is an AI-driven Total Spend Management platform built to optimize both direct and indirect spending for businesses. It aims to provide visibility, control, and efficiency across the entire spend management process. Coupa's platform helps organizations make data-driven decisions, gain real-time cash flow insights, and mitigate risk. The platform also focuses on helping businesses achieve organizational and operational scale. Coupa emphasizes using ethically sourced data to help protect businesses.

Coupa has been named a Leader in the 2024 Gartner Magic Quadrant for Source-to-Pay Suites and a leader in The Forrester Wave for Supplier Value Management Platforms.

Ratings

4.2 out of 5 stars on G2

Key Modules

• Supply Chain Design & Planning: Optimizing networks, transportation, inventory, and demand.
• Supply Chain Collaboration: Facilitating collaboration between buyers and suppliers.
• Source-to-Contract: Managing sourcing and contracts effectively.
• Procure-to-Pay: Streamlining the entire purchasing process.
• AP Automation: Automating accounts payable processes.
• Treasury Management: Managing cash flow and liquidity.

Key Features

• Supply Chain Management
• Sourcing
• Contract Management
• Intake
• Procurement
• PO Collaboration
• Service Procurement
• Inventory Management
• Invoice Automation
• Category Management
• Supplier Risk
• Spend Analytics
• AI Platform
• Virtual Cards

Strengths

• Users like having a single platform to manage all spending activities, from sourcing and contracting to invoicing.
• Coupa offers a Total Spend Management Benchmark Report that provides strategic insights based on the performance of the Coupa community.

Cautions

• Some users find the web interface poorly designed and confusing, and the interface is not intuitive.
• Vendors find the Coupa interface difficult to navigate, getting lost trying to access specific forms.
• There can be sync problems between Coupa's core system and other modules as they aren't natively integrated.

ProcurementExpress

ProcurementExpress.com is a cloud-based purchase order software designed to make purchasing less time-consuming and more efficient. It helps to address the challenges that finance teams face in controlling spending by offering tools that automate purchasing tasks. ProcurementExpress brings the entire purchasing process together in a single application.

Key Modules

• Order Management: Procurement Express automates your purchase requests, purchase approvals, and invoice processing.
• Finance Operations: It offers capabilities like budget tracking, rich reporting, mobile app access, multi-currency support, and multi-company management.
• Supplier Management: A supplier portal to manage third-party relationships that include a supplier portal, RFQ functionality, and a product catalogue.

Ratings

4.7 out of 5 stars on G2

Key Features

• Purchase Approvals
• Custom Fields
• Punch Outs
• Invoice Scan & Match
• Single Sign-On
• Budget Tracking
• Rich Reporting
• Mobile App
• Multi-Currency
• Multi-Company
• Custom Dashboard
• Supplier Portal
• Carbon Footprint Tracker

Strengths

• Procurement Express is simple to navigate, with one user stating that "even a technophobe can use it".
• It integrates with Quickbooks Online, Xero, and Zapier, enabling teams to raise purchase requests and view spending per department.

Cons

• Procurement Express is a simple solution with limited functionalities and can't scale with your growing procurement needs.
• It received criticism for its search functionality, clunky expense reporting, and some limitations with Quickbooks Online integration.

Implementation Process

Implementing purchase order software involves several key steps:

1. Needs Assessment

Evaluate your business's procurement needs and identify the key features required, such as approval workflows, supplier integration, and reporting.

2. Vendor Selection

Research different software options, request product demos, and compare features to find the best fit for your business.

3. Customization & Setup

Configure the software to align with your company's workflows and integrate it with existing systems (ERP, accounting, etc.).

4. Training

Provide comprehensive training to ensure that employees can effectively use the software and follow the new approval processes.

5. Go-Live

Once the system is configured and employees are trained, begin using the software for actual purchases. Monitor its performance and address any initial issues.

Make smarter and more strategic purchasing decisions.

Choosing the right purchase order software is crucial for businesses aiming to streamline procurement, minimize errors, and reduce costs. With the right solution, organizations can automate repetitive tasks and approval workflows to gain better insight into procurement activities. PO software empowers you to make informed spending decisions that enhance efficiency and effectiveness.

Given the variety of top-tier options available, you can select the software that best meets your unique procurement process and policy needs. Leading PO software platforms come with a range of features like guided buying, punch-out integrations, and spend reports to simplify procurement and ensure greater transparency and budget control. Invest in the right PO software to stay competitive, eliminate inefficiencies, and make smarter, more strategic decisions.

About the Author

Elanchezhian Anandhan

Elanchezhian Anandhan is a procurement technologist with a passion for transforming how businesses manage sourcing and purchasing through innovative tools and automation. With a background in marketing and extensive experience in SaaS Procurement Technology, Elan specializes in evaluating and implementing cutting-edge procurement technologies to optimize operations and enhance efficiency.