Streamline Procurement with An Innovative New Feature for Processing Purchase Order Acknowledgements
Here at Next Process, we’re always on the lookout to develop new features and make our products more useful to clients who are using our software. Part of this process involves listening to requests and suggestions from current clients, which is what led to a new feature we’re developing as part of our procurement and purchasing software.
This new feature will help streamline procurement by making the process of verifying and acknowledging purchase orders (POs) more efficient. Instead of manually checking PO acknowledgments from vendors to make sure they match the PO your company submitted, our software will do it for you. This new feature makes the purchasing process more efficient and opens up exciting possibilities for leveraging data to support a sustainable supply chain.
Problem: The Current Purchase Order Process
Currently, when your company generates a purchase order and sends it to a vendor, the vendor replies with an acknowledgement. A purchase order is a contract, and the vendor’s acknowledgment includes confirmation of the product, the quantity, the price, and the promised delivery date.
Usually, the acknowledgment has the exact same information as the PO. Sometimes, though, the vendor will reply with a different delivery date or to communicate a price increase. Employees on the procurement team typically receive these acknowledgments in individual or shared email inboxes. They have to manually open and examine each emailed acknowledgment to check it against the submitted PO. This is a tedious process.
Solution: An Innovative Feature for Purchase Order Acknowledgment
One of the things the NextProcess team prides itself on is finding innovative ways to automate manual processes and support businesses. In response to the need for reconciliation of POs and PO acknowledgments, we’re building a new feature into our procurement and purchase order software.
This new feature will capture key data from purchase order acknowledgments and compare the acknowledgment against the original purchase order. If everything checks out, the system will make a log entry noting that the POs and acknowledgement match, and no one will have to spend time reviewing it manually. If there is a variance in the quantity, item cost, or promise date, the software system will notify the procurement team so they can see what’s going on.
Case Example: Our Client’s Need for an Automated Process
We started developing this new feature when a current client requested a feature that could “invert the invoice process” to simplify procurement. Our client wanted to have the acknowledgment data captured and compared against the original purchase order information. By doing so, they would only need to address the purchase orders where there was a variance. This feature would effectively double the transactional processing for the client, providing a more detailed record of procurement activities.
Currently, NextProcess software can automatically check invoices to make sure they match purchase orders. With this new feature, the system will also automatically check PO acknowledgments from the vendors. As with all processes run through our software, the system automatically logs every step in the process, so you have an easy-to-audit record of financial activity.
How This Feature Will Work with The Current Software
NextProcess’s procurement and purchase order software is already packed with features to streamline the procurement process. This new feature will fit in seamlessly, providing users with additional functionality and automation options.
Our software makes it very easy for employees with purchasing permission to place orders within the software. Punch out and item catalogs make purchasing simple, and the system automatically generates and sends policy-compliant POs to pre-approved vendors. The new features will take over the next step of verifying that the vendor’s purchase order acknowledgment matches the original PO.
You can automate your whole procure-to-pay process with NextProcess software by also implementing the accounts payable automation solution. When using this software, invoices associated with POs are typically processed within 12 hours.
Broader Implications and Future Applications
The PO acknowledgement feature is in the developmental stages, but we’re already coming up with exciting new ways for businesses to use it. In addition to making the purchasing process much more streamlined, companies could potentially use this feature to evaluate vendor performance over time.
With this new feature, the procurement system will keep track of which vendors make changes to purchase orders, what types of changes they make, and how often they make changes. For example, the software could track how often vendors meet the promised delivery dates or stick to the agreed prices.
If one of your trusted vendors must delay shipment by a week, then it’s inconvenient but not likely to damage your relationship with that supplier. However, if you notice a pattern of delayed shipments and/or price increases from the same vendor over and over, it might be time to look for an alternative supplier.
Collecting and using this type of vendor data could be an invaluable asset to your company’s efforts to maintain a sustainable supply chain. While this tracking feature isn’t available yet, it’s an exciting avenue for future development.
The new feature presents a promising solution to a common problem in the procurement process. Automating verification of purchase order acknowledgment could significantly reduce the manual labor involved in the purchasing process. This feature could also potentially provide a platform for enhanced vendor evaluation in the future.
The new PO acknowledgement verification feature exemplifies how technology can improve efficiency and accuracy in business operations. If you’re already a NextProcess user, this feature will be automatically available to you when development is completed. If you’re not using our software yet, you can contact us today to set up a free demo and see first-hand how automated purchasing can empower your business.