In earlier blogs, we covered why and how purchase orders can benefit small businesses and the difference between a requisition and a purchase order. Skeptical entrepreneurs and small business owners may still doubt how purchase orders can do anything but add to the pile of paperwork they already face. Yes, creating a requisition and purchasing process might mean more paperwork… unless it’s done correctly.
But consider the very inefficient flip side. Joe learns about software that he believes can reduce time spent in the shipping department. He goes to the production manager and suggests the company buys it. The production manager goes to the accountant who in turn goes to the CEO to make the request. Of course, the CEO wants to know the cost, how much time and money it will save, and the anticipated ROI, so he pushes back on the accountant who pushes back on the production manager who finally pushes back on Joe. Joe does the research and compiles the data, giving the necessary details back to the production manager who forwards it to the accountant who forwards it to the CEO… who then approves the purchase, tells the accountant who tells the… you get the picture.
That’s a lot of wasted time… and don’t think for one second that trying to communicate this via email is going to improve anything. Email communication always has the tendency to run amok.
With a well-structured purchasing process in place and the software to enhance it, the scenario would play out like this: With formalized requisition documentation, Joe knows from the outset what details he must provide before even asking. He completes his requisition and forwards it to the production manager. If the purchase amount is within his authorization level, the production manager can approve it, having all of the data at his fingertips if he needs to justify the purchase higher up the chain of command. If the amount exceeds his authorization, he forwards it to the accountant who approves or forwards to the CEO. No wasted time and no back-and-forth emails.
Req2PO is a web-based app that is designed specifically to streamline the requisition process and, once approved, to convert the information to a purchase order to eliminate any redundant task work.