Best Practices for Purchase Order Control
Posted by articlelink01 on November 24th, 2014
There are many practices that guide and control how purchasing is done in a business setup. Purchase orders are commonly used to make acquisition thus purchase order control is a compulsory undertaking for your company. Some companies are never transparent and accountable in the way they make orders for their purchases which is why putting in place adequate controls remain vital. This review will discuss the main best practices that a business can practice to make purchasing control successful and effective. It will be even more effective once there is a software program installed in the company systems to keep a good track of the whole processes.
There is separation of duties where all precise purchasing responsibilities are entrusted with specific individuals. It makes sure no single individual within a company enjoys total control over the purchasing done which can lead to corruption and theft. You can have one person take charge of purchase approvals, another one to receive and confirm purchase orders as well as those for approving invoices, reviewing financial records as well as counting inventory. That is a very productive and bold step that a company can take in controlling how purchase is done. The consequences a company is likely to suffer for ignoring that include unnecessary purchasing, inappropriate charging, incurring unnecessary expenses and impulse buying.
Accountability is another good practice that will help in taking proper control of purchasing in a company. This is achieved through making purchase reviews and approvals as per the laid down procedures where signed agreements and contracts are respected. Your company has to adhere to the ethical practices associated with buying, make periodic reviews and ensure accuracy in the transactions made as well as making timely payments to suppliers. Deceitful purchasing will be the key consequence to suffer from once your business does not allow for accountability as a best practice for purchase order control. Offering security for your assets is yet another practice that can help take control of purchasing in a business.
There are many instances when goods disappear mysteriously within a company after purchase but it’s all because of conspiracy between employees. That will be a thing of the past once you guarantee them security through storing in a secure place. Make sure they are only accessible to authorized members of staff as well as maintaining proper and updated inventory records. This is where purchase order software comes into question because it is accurate, reliable and easy to use.
When reviewing and reconciling invoices and purchase orders from suppliers, ensure it is timely and you will not have problems controlling your purchase. Purchase order control becomes difficult at times when things are done in a hurry but you are advised to take enough time.
Purchase order control is very important in making a business more productive and profitable. Make sure you have embraced the best practices like accountability and separation of duties to make that a reality. Purchase order approval software http://bellwethercorp.com/ is an ideal program to help in enhancing that from a digital perspective.