We hear the expression “Work smarter, not harder” all the time, but not all of us follow it. Applying this philosophy to run a business requires you to take a step back and check things that will assist you in better and faster processes. Small tasks take a lot of time to complete, so special attention needs to be given to them. When its business we are discussing about, one aspect of it is often neglected. This is what we call purchasing.
Any brand or company that keeps an inventory management system is familiar with purchase orders and the receiving procedures. The purchasing area of a business allows you to control the operational purchasing life cycle, which includes activities like managing and controlling purchase requests, collaborating purchase orders and generating receipts for goods or services before delivery of products. The purchasing area of a business becomes relevant when you have to buy stock for manufacturing and for direct sale to customers. It is also important when you require buying any non-stock materials for day-to-day operations of the company or while managing your purchasing costs centrally. Most companies manage their purchasing task by giving responsibility to several key employees or by decentralizing the task. As a result, they spend too much on unnecessary purchase, or keep a stock of inferior quality products.
Without a doubt, it can be said that when purchase order processing is maintained in an effective manner, the operational costs associated with that purchase is reduced. Moreover, by streamlining the process of purchase order, your company receives the following benefits:
- Higher profitability
- Better inventory visibility
- Better real-time material visibility
- Improved capability for decision making and accountability
Tips to Streamline Your Purchase Order Process
Owing to the several benefits and the operational efficiency that a streamlined Purchase Order Process can bring, here are a few tips that can assist you in making the PO process more time saving.
Automate PO Process with Purchase Order Processing
POP or Purchase order processing allows the scope to implement automated system to manage the purchase orders of a company. For a successful business, it is necessary to make complex relationship with suppliers and have control while ordering or making supplier payments. Without these components, managing a business becomes tough. If you process orders quickly, make payments efficiently and accurately, developing rewarding relationships with suppliers becomes easy. Moreover, this gives you the chance to secure preferential rates on items from suppliers, an ultimate benefit for the company.
Improve Processing Of Sales Order
Sales orders are vital in an industry for building business growth. With efficient management and processing of sales order, a company can achieve better results. A sale order can come via post, email or fax and processing them individually is time consuming and costly. Improve the overall method of sales order processing. Ensure that all orders are processed accurately every time. Doing this will not only help you to generate revenue but also lead to better customer satisfaction and repeat business.
Make Use of Barcode Scanners
It is always a great idea to keep use of mobile computers with barcode scanners or RFID readers ready at the receiving dock for identification of products at the earliest. By doing this process, you will ensure that the products from the docks are identified and removed to inventory immediately. This process also allows you to identify any error that might occur during manual receiving and eliminate it right at the roots. By using this technology, any errors associated with inventory accuracy are avoided.
Look For Suppliers Providing Barcodes
Always ensure that your suppliers have barcode labels for all packages and ASNs incorporated for the shipments. As the materials arrive at the receiving dock, it becomes easy for you to prioritize items for unloading and receiving. It also becomes easy for your staff to identify each item at the loading point and associate it with a valid purchase order, thus eliminating excessive back-and-forth of operation in the procurement department.
Separate Personal & Business Banking
One common mistake that every startup business does is keeping the same account for personal and business accounting. If you own a business or plan to start one, a business account and business credit card is the safest bet. It will not only help you in managing taxes but also save time when sorting personal from the professional. Again, if you start intermingling business credit with personal, you negate the protection that being an LLC can afford. By organizing your financial accounts at the very beginning, allow you to keep track of any changes that may happen financially in your business.
Keep Tracks of All Orders
A trusted purchase order comes to play when orders are tracked. Once you have agreed to a certain price with a vendor for a certain product, raise a purchase order to the supplier to go ahead and deliver the materials at the agreed price. This will aid you to stay on the top of purchase tracking especially when the items are invoiced and delivered. Always cross check items with the purchasing order and during the invoice arrival. Spot-check your quality and quantity to avoid any future time consuming errors.
Evaluate your Purchase Policies
Do you have a purchasing policy for your organization? If not, then you should have one immediately. A purchase policy can help you develop efficient purchase order processes. Ensure that your purchasing policy answers important questions like:
- Who has the authority to make purchases for your company?
- How many vendors should be compared before raising a purchasing order?
- How can any conflict of interest be avoided?
- Are there limitations on the amount that can be spent before further approval?
Rasbor and Electrical Best Buy Come Together
Electrical Best Buy is the transition company of Mohan Group that started its operations as a one-man organization since 1967. The company is known to be one of the largest distributors of electrical products in India. Mohan group chose Rasbor as its transition partner. Humbled by their choice, we tried our very best to deliver solutions for the digital transformation. Electrical Best Buy had several issues that required action. From brick-and-mortar store, Electrical Best Buy was going digital and Rasbor was helping them during this phase. After a thorough analysis, we found several big changes needed for the site. Moreover, the operation process was not updated according to this digital transition.
To make things right, we implemented several procedures, one such effective process was getting their Purchase Order Process streamlined. From the creation of PO to its redesigning was done by us. We brainstormed to create the most cost effective and less time-consuming PO. The process eliminated navigation through several different pages. The new window had a single window, sufficient for the operation. All sales orders are auto created as soon as an order is placed. The new interface can create a PO and multiple POs against one or several sales order with ease. Product and discount details from suppliers are also populated into the interface. Barcode implementation was done to reduce excessive back-and-forth of operation.
Streamlining Purchase Order Processes can be often confusing and hard to plan, especially when you do not have the right resources and accurate data. In such situations, a professional company can help you identify the process and find out better ways to do it. These effective tips mentioned above will assist you when you know what you want from the streamlining process. If you have put any new practice in place small business purchasing process, share with us your feedback on our Facebook and Twitter pages.