Key Insights to Master Purchase Order Tracking

Did you know that businesses can streamline their procurement processes and save a significant chunk of their SaaS expenses just by mastering purchase order tracking? It’s quite rare for a single business process to have such a huge impact on revenue. However, effective PO Tracking for SaaS allows businesses to maintain control over their purchases and easily manage licenses, payment, delivery terms, and renewals from a single source of truth. 

Get it right, and you’ll have a streamlined, transparent, procurement system free from duplications and shadow IT. 

What is PO tracking?

In the simplest terms, purchase order tracking refers to the process of monitoring and managing the lifecycle of a purchase order from creation to fulfillment. 

This starts from the initial order request and includes all the steps including approval, vendor selection, order placement, and finally, the receipt of goods or services. Effective PO tracking ensures that every step is documented, monitored, and controlled. Which allows businesses to maintain transparency and accountability in their procurement processes.

For IT and SaaS procurement, PO tracking helps organizations keep tabs on software purchases, subscriptions, renewals, and usage. This is crucial for avoiding issues such as unapproved software purchases, duplicate subscriptions, and forgotten renewals, which can lead to wasted budget and compliance risks.

What are the benefits of PO tracking?

Effective PO tracking can result in significant cost savings, improve performance through accountability, create great vendor relationships, and help manage risks more effectively. Let’s take a quick look at how.

Cost savings

By implementing robust PO tracking mechanisms, businesses can identify and eliminate unnecessary expenses. For instance, tracking POs helps avoid duplicate orders and enables better negotiation with vendors based on accurate data. Another area where effective PO tracking helps is managing renewals. Theoretically, you hold the most leverage over your SaaS providers a few weeks before the renewal is due. They’d be keen to keep your business and you’ll have enough time to try out and implement new tools. PO tracking lets you know in advance about the sweet spot and use it to iron out the best deal possible. 

Enhanced transparency and accountability

PO tracking ensures that all procurement activities are visible to relevant stakeholders. This transparency helps in maintaining accountability, as each step of the procurement process is documented and can be audited. It also facilitates better decision-making by providing a clear picture of procurement activities and their outcomes.

Improved vendor relationships

Consistent and accurate PO tracking helps businesses build stronger relationships with their vendors. By monitoring vendor performance and adherence to contract terms, companies can identify reliable vendors and foster long-term partnerships. This, in turn, can lead to better pricing, terms, and service levels.

Risk mitigation

Understanding and tracking the entire PO lifecycle helps businesses identify potential risks and mitigate them proactively. This includes recognizing patterns of late deliveries, discrepancies in order fulfillment, and compliance issues. Effective PO tracking can help avoid these pitfalls and ensure smoother procurement operations.

Excel vs. automated solutions: Which one's the best choice?

You might be thinking that automated systems are the way to go. However, there's a reason that many businesses still rely on Excel, in particular, or spreadsheets in general for many of their processes, including PO tracking.

Let’s take a quick look at both options. 

Excel sheets

Excel has long been a staple tool for many businesses in managing their purchase orders. It offers a flexible and customizable platform for tracking POs. However, it’s important to note that Excel is powerful only for a handful of scenarios. 

Tailoring it for larger and more dynamic operations is possible, but it’s both complicated and time-consuming. You’d better spend all that effort on something more productive. Here are a few limitations that many Excel users deal with: 

• Manual data entry: Excel requires manual data entry, which can be time-consuming and prone to errors. This can result in inaccuracies and inconsistencies in the data.
• Limited collaboration: Sharing and collaborating on Excel files can be cumbersome, especially for teams in different locations. This can lead to issues with version control and outdated information.
• Lack of real-time updates: Excel does not provide real-time updates, making it difficult to track the current status of purchase orders (POs). This can cause delays in decision-making and hinder efficient procurement management.
• Scalability issues: As businesses grow, managing a large number of POs in Excel becomes increasingly challenging. The spreadsheet can become difficult to handle and navigate.

Automated systems

Automated PO tracking solutions offer several advantages over traditional Excel sheets, particularly for IT and SaaS procurement:

• Efficiency and accuracy: Automated systems minimize the need for manual data entry, reducing the risk of errors and ensuring data accuracy. They streamline the entire PO process, from creation to approval and fulfillment.
• Real-time tracking: These solutions provide real-time updates on the status of POs, allowing businesses to monitor and manage their procurement activities more effectively. This ensures timely decision-making and enhances overall efficiency.
• Enhanced collaboration: Automated PO tracking systems facilitate seamless collaboration among teams, enabling better communication and coordination. This is particularly beneficial for businesses with multiple departments and locations.
• Scalability: Automated systems are designed to handle large volumes of POs, making them ideal for growing businesses. They offer advanced features such as integration with other procurement tools, analytics, and reporting capabilities.

PO Tracking best practices

Before proceeding, it’s important to note that there is no one set of practices to rule them all. It’s business, no Lord of the Rings. Best practices are a general set of instructions that work out in most cases. However, the right approach depends on the unique dynamics of your business and the following best practices for PO tracking are merely a starting point. 

1. Standardize the PO process

Having a standardized process for creating, approving, and managing purchase orders (POs) ensures consistency and reduces the likelihood of errors. Define clear procedures and guidelines for each stage of the PO lifecycle and ensure that all stakeholders are aware of and adhere to them.

2. Utilize automation tools

Use automated PO tracking solutions to streamline your procurement processes. These tools not only increase efficiency but also offer valuable insights into spending patterns, vendor performance, and potential areas for cost savings. Look for solutions that seamlessly integrate with your current procurement systems for a more comprehensive approach.

3. Monitor vendor performance

Regularly assess your vendors using key performance indicators such as delivery times, order accuracy, and service quality. This will help maintain high standards and identify dependable vendors. Utilize PO tracking data to reinforce these evaluations and cultivate stronger vendor relationships.

4. Conduct regular audits

Performing regular audits of your purchase order (PO) processes ensures compliance and helps identify any discrepancies or inefficiencies. Use the insights gained from these audits to continuously improve your procurement practices and mitigate risks.

5. Foster collaboration

Encourage collaboration among the procurement, finance, and IT teams to ensure that purchase order tracking is aligned with organizational goals. This helps avoid duplicate purchases, effectively manage budgets, and ensure that procurement activities support overall business objectives.

6. Leverage analytics

Use the data generated by your PO tracking systems to obtain insights into your procurement activities. Analyze spending patterns, identify trends, and utilize this information to make well-informed decisions. This can result in substantial cost savings and enhanced procurement efficiency.

Streamline your procurements with Spendflo

Effective procurement isn’t only about purchase order tracking. Spendflo provides a comprehensive suite of features designed to streamline your procurement process and help businesses save on SaaS expenses. With Spendflo's holistic platform, you can manage your entire PO lifecycle with ease, from intake to procure. 

Our advanced procurement analytics provide deep insights into your spending patterns, helping you optimize your software portfolio and achieve maximum value. Whether you're in IT, finance, or procurement, Spendflo offers the solutions you need to master purchase order tracking and transform your procurement strategy. 

Book a demo today to learn how you can start leveraging our platform to make your procurement more efficient, transparent, and cost-effective.