The answer to this question is simple: inventory. Once you’ve placed the orders and the suppliers delivered the goods, they already form part of your inventory, even if they’re still untouched or they’re considered as raw materials and supplies. As long as they are in the warehouse and they form part of your business, these items are already called inventory.
Inventory incurs costs, which can be classified as fixed or variable. A good example of a fixed cost is electricity that may be needed to maintain the goods. The rent of space for inventory is also a fixed cost. Regardless of how many inventory items you have, the price remains the same.
Variable costs, meanwhile, change depending on your inventory. Goods depreciate, and keeping them in pristine condition may mean more spending as time goes by.
Because you can’t afford to make huge mistakes with inventory, you have to make use of purchase order online software.
But How Does It Truly Help?
One of the main functionalities of purchase order receiving software is the ability to compare goods purchased and items received. It’s possible that you’ve ordered more but received less or vice versa. Either way, any discrepancy can result to either a loss or a cost, which doesn’t really favor your business.
By using purchase order online software, comparing these two things can be done in mere minutes. In case of any differences, you can then find a way to reconcile the items, perhaps double-check the goods that have arrived or contact the vendor for any possible error in the delivery.
When your company is grown, there’s a very high chance that you would need to deal with hundreds of goods for inventory in one day. Processing and comparing them one by one can prove to be a waste of time and money. These types of software can speed up the task by doing batch processing.
The purchase order receiving software, moreover, can hold documents and images that pertain to orders purchased and received. The paper trail can be handy when you want to establish accountability. Who was responsible for the receipt? Should he be held accountable for the loss, if there is one? Was the loss deliberate?
The paper trail is also necessary when you or someone else is doing auditing. In fact, with the purchase order online software, auditors don’t need to be present in the warehouse where inventories are kept to perform their jobs as they can conveniently trace the flow of transactions from the comfort of their own home or anywhere they’d like to be. You can generate reports to keep them up-to-date, as well as use the data to make better purchasing decisions like improving the process flow.
Inventory management is very much a part of your business process, and being efficient in it begins with the purchase receipt. Get this right and the likelihood of making huge and costly errors will be greatly lessened.
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