Purchase order software (also known as PO software) helps create the financial document issued to vendors when you are buying supplies or services. Purchase orders will include information such as product type, quantity, and pricing.
Purchase order management software functionality is a key part of any accounts payable process. Purchase order systems can help automate the creation of purchase orders, which will save time when stock levels are running low. Because of this, purchase order software goes hand in hand with inventory management software.
PO software can also have approval and requisition processes. Anytime someone in your company desires a purchase to be made, they will go through the approval process:
If a job or service cannot be completed without purchasing additional goods, a purchase order can be attached to bills or invoices in order to pass the cost onto the customer. Purchase order software can be integrated with a variety of accounting software and invoicing solutions for this purpose.
Purchase order and invoicing solutions let your purchasing staff create POs and track invoices. Purchase orders can be created from requisitions or from integrated an ERP software that is integrated with it. Invoices can be paid directly through the program rather than having to upload/attach the PO into an accounts payable solution.
Many stand-alone purchase order solutions will not have invoicing capabilities built into the solution and will require you to integrate with an accounting or invoicing solution for that purpose. In many situations, in trying to complete a job/service for a customer, you’ll need to purchase supplies or goods, and will need to pass the expense on to the customer.
Lucky for most, any accounting solution with an accounts payable module should allow for an easy transition from purchase order creation to invoice generation.
Many businesses use purchase order software for the purpose of replenishing inventory. Purchase orders hold the information on needed parts or products from vendors your company has a relationship with. If your inventory stays well stocked with raw materials, you’ll be able to fulfill any manufacturing or distribution jobs that come your way.
An integrated purchase order software with inventory will save information on parts and vendors. This helps you organize which vendors you’ve purchased from previously, who has the most affordable costs, who has the best turnaround time, and more.
An efficient PO software with inventory will also automatically generate a PO when inventory level hits a certain threshold, called the “reorder point”, and have it sent to the vendor without any needed user interaction.
For new businesses and small businesses, it may be hard to budget for a purchase order software to adequately meet your needs. Luckily, free options exist. These can come in the form of forever-free packages, limited use packages (usually capping you at specific number of purchase orders each month), or trial versions of paid options.
The Free-Procurement Project by SpendMap is a true free purchase order software. It does not provide limited functionality or only a trial version of their paid-version. Your business can automate the purcahse order process with an unlimited number of POs in the Free-Procurement Project solution from SpendMap.
Key features include professional looking POs, email integration, supplier management, and budget tracking.
Paid versions of SpendMap are available starting at $20/month/user which offer a wider range of functionality.
Zoho Inventory is a free solution in the Zoho suite of applications. Included in Zoho Inventory is the Purchase Order Generator, which can create simple purchase orders with editable fields. You can add your billing address, add your vendor’s address, enter a PO number, and even include descriptions of the bought items.
While Zoho Inventory is free to use, it’s strong suit is in inventory management and not necessarily purchasing. It will mostly act as a simple tool to create a quick purchase order, but it will not allow for a level of automation, collaboration, or customization. You are also limited to only 20 orders/month with the free version. Zoho Books, Zoho’s flagship accounting program, also has a purchase order module included with it but does not include a free version (starting price $9/month).
Paid versions of Zoho Inventory start at $39/month and included the capability to handle up to 1,500 orders a month.
What are the best purchase order software solutions for small businesses? We’ve looked into a handful and have found a few that are continuously affordable, easy to use, and easy to set up.
Coupa is a complete spend management program providing purchase orders and purchase requisition capabilities. The software can be as simple as something you use to create purchase orders, or as complicated as handling anything that relates to your purchasing process.
Coupa has a variety of products you can purchase depending on your needs, such as Procure for e-procurement, Invoice for AP automation, Expense to monitor travel/employee expenses or Pay for B2B payments. They can also be fully integrated to operate as a complete spend management platform.
Coupa has been effectively implemented into a wide range of industries. This includes packaged goods, education, healthcare, manufacturing, and more. Because of this, Coupa stands out as being one of the most versatile purchase order software options available.
Price: Coupa does not make its pricing available online. Coupa does have a free open-source version of the software, although it has not been updated since 2009 and requires an advanced installation process.
Bellwether has a variety of products that can work for your business. From their BMX (Basic Purchasing Software) option to their EPMX (Enterprise Software), there is a purchasing software from Bellwether that will work for you. They also offer free purchasing software called PMX.
Creating a purchase order will be a routine procedure in the accounts payable workflow in QuickBooks Pro. Beyond it’s ease of use, QuickBooks has long been one of the leading small business accounting solutions that provides a general ledger with accounts payable and accounts receivable. A part of their account payables process is the ability to create a purchase order.
A purchase order workflow in QuickBooks is intended to:
Quickbooks can help track items ordered and recieved, help you plan expenses, and manages your funds wisely. The combination of these factors and a strong audit trail will make QuickBooks a great choice for small businesses looking for PO capability with full accounting.
Smaller businesses looking to make a jump to a mid-sized accounting solution with a strong purchasing functionality will want to consider a product such as Sage Intacct. Their purchasing module automates purchasing transactions and has dashboards and reporting tools so your staff can monitor merchandise and service acquisitions.
Sage Intacct lets you implement best practices for purchasing supplies, and lets you create custom templates for requisitions, requests for quotations, purchase orders, and adjustments. It also lets you database your vendor prices. Anytime you pay a price on a purchase order, you can automatically update your vendor costs with those figures for future POs.
Price: Varies depending on the number of users and functionalities needed. Typically starts at $400/month/user.