One part of being an ecommerce retailer is sourcing your products. That means that you have to have business relationships with suppliers, manufacturers, or distributors in order to procure your inventory. Making sure that you maintain smooth supply chain management is a challenge that requires you to keep track of every transaction you make when buying stock, including purchase orders. Otherwise, you run the risk of encountering complications and delays in fulfilling customer orders. Thankfully, you can use a purchase order management software solution to make sure that nothing slips through the cracks.
Related: These 10 product sourcing tips will cut down on waste, speed up shipping, and grow your profits.
Why Do You Need A Purchase Order Workflow?
Having a purchase order workflow can help streamline major inventory processes and optimize costs. That is why it is essential that you retain a purchase order for every transaction that you make with your suppliers. Not doing so may hinder your ability to explore new opportunities that will allow you to improve overall performance at every stage of purchasing from request to receipt of merchandise.
How Can Purchase Order Management Streamline Your Processes?
Managing purchase orders accurately can have many positive effects on the operation and growth of your ecommerce business. The following are just five of the ways that having the right software solution can help your business.
#1 – Accurate Inventory Levels and Forecasting
Figuring out exactly how much stock you should have on hand is no easy task, especially when your business experiences sudden growth. Accurate inventory management requires forecasting sales and fulfillment times. This becomes way easier if you’ve got tabs on your purchase orders.
When you have a solid purchase order workflow along with your inventory management solution, all of this can be easily automated and updated in real-time, making it simple for you to always have an accurate view of inventory and to avoid stock outs and oversells.
#2 – Easy Access to Transaction Histories of Suppliers
You may already have the best shipping system in place so that your products reach your customers quickly, but what do you do if your supplier is unable to get you your stock in time? Your customers’ orders will be delayed, and that can lead to negative reviews that’ll damage your ability to convert in the future.
When you log each purchase order for every transaction with suppliers, you will be able to determine which supplier gets you your inventory fastest. This will allow you to identify the quickest ways to get products, optimizing your fulfillment process and cutting down on shipping times.
#3 – Optimize Internal Communication
You know that it’s important to be on the same page with your employees. But it’s also crucial that you are in sync with your warehouses. Making sure that you all have access to the same information is not only going to save you the time, but it’s going to eliminate confusion and delays in order fulfillment.
When you utilize a purchase order management system and centralize all of your purchasing transactions, everyone can access to the same accurate, up to date information quickly and easily.
#4 – Accurate Seasonal Stocking
Being an online retailer during the holiday season is enough to make you desperately wish for the new year on its own. If you don’t have a purchase order management workflow in place, you might just pull your hair out!
Keeping enough stock in your inventory during holiday seasons is key, but to do that you have to be able to anticipate demand for your products and forecast what kind of sales you will do. Using purchase orders, you are able to forecast accurately and know which suppliers are going to be your go-to’s for the quickest shipping and best service. This will allow you to fully capitalize on the holiday shopping season.
Related: Not sure how to forecast sales? Perform an annual review. Here’s your FREE in-depth guide on business reviews and annual plans.
#5 – Reporting and Analytics
To make the right decisions for your ecommerce business, you have to have access to the right reports and analytics. The data that your purchase order management software will provide is absolutely essential. Your purchase order history, buying trends, supplier costs, and many useful metrics all start with the transactions that you enter into with your suppliers. A software solution will also keep everything organized for you so you never have to hunt for information. It’s all available at the click of a mouse.
You will come across some business owners who do not use purchase orders because they do not want the hassle of more paperwork or data entry. However, when you use a purchase order management solution, you are able to automate tasks, save time, and manage purchase orders in real-time. You’ll see the benefits and know for sure it’s worth it.