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how to automate purchase orders

How to Automate Purchase Orders for Shopify to Save Yourself Time and Money

If you run an ecommerce business on Shopify, you already have so many things to think about and processes to manage. Small business owners have very few dull moments, but sometimes it’s nice to save some time and breathe a little or simply be freed up to focus on more or different things. That’s why learning how to automate purchase orders can be invaluable to your store, your team and, ultimately, your bottom line.

Here, we’ll go over the typical PO process vs. automatic POs and the benefits of using an automated workflow. Then, you’ll see how you can automate your PO process for Shopify using a handy tool like Simple Purchase Orders.

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The Purchase Order Process

An organization’s purchase order or procurement process comprises the sequential steps of a purchase order. For a transaction to flow smoothly and seamlessly, it’s important to create a seamless flow for everyone involved, like the salesperson, manager, and buyer. With a good, solid process in place, everyone’s expectations for orders can be clear and any misunderstandings can be anticipated and minimized or eliminated. Plus, you can track documentation to help keep your budgets in line.

The PO process steps differ from business to business but typically consist of: purchase order creation, approval, dispatch, delivery, invoicing, closure, budget and quality checks, and contract management. It might look something like this:

PO process


What is Purchase Order Automation for Shopify?

Purchase order automation is the use of an automated app or tool to manage or administer everything to do with your purchase order process. You can easily do this directly in your Shopify store using a tool like Simple Purchase Orders. The tool automatically sends a purchase request to the designated team member to review and approve. Then, the PO is automatically created, which removes the need for data entry and physically sending or emailing POs for review and approval.

Challenges of Manual PO Processing

Youll likely face a number of challenges by using a manual PO process such as emailing a form or spreadsheet around to track and process purchase orders.

Lack of Transparency

With a manual system, everyone involved in the PO process won’t have total insight into the documentation they need when they need it. If you’re wondering where a certain PO is in the process, you won’t necessarily know unless you ask someone.

Too Much Documentation

Just about any manual process adds extra paperwork or documentation to the mix and can make it tough to remain organized. This includes the PO process.

Issues with Compliance

Depending on the industry and geographical location in which your Shopify business operates, you’ll have to adhere to some type of regulatory or business requirements. With a manual process – for purchase orders or otherwise – it can be tricky to know whether the correct process was followed each and every time.

Relies on People

In a manual PO process, people are required to move it along the line, whether it’s creating the PO to email or physically distribute for approval, or following up by phone with a supplier. While this isn’t negative on its own, it does leave room for error or delay.

For example, someone can go on vacation for a month and become a bottleneck while a form sits on their desk. Or, maybe they forget about and skip an additional approval requirement or send the request to the wrong team member. Human error is inevitable and you must leave room in your process to expect this. In a manual process, there’s simply more room for this to occur.

Benefits of an Automated PO Process

benefits of automated pos

If you deal with many POs each month, an automated PO process can help you overcome the challenges you’d likely face with a manual PO process. Implementing an automated process can bring significant savings and benefits to your Shopify store. Your team will have an easier time managing invoices and payments, plus a solid process and level of control can be enforced so your business is protected. 

Here are some of the most common benefits of an automated purchase order process.

Fewer Mistakes

When you’re using an automated or digital system with required fields, you remove the chance of illegible handwriting or missing information that’s crucial to the transaction. This gets things right the first time and avoids extra time that would otherwise be spent going back and forth between parties.

Better Security, Compliance and Transparency

When you use manual POs, or paper documents of any type for that matter, you run the risk of confidential information winding up in the wrong hands. Automated purchase order systems only share information with those you designate with the appropriate permissions, and you can set whatever security restrictions or rules you feel are needed.

This means you have total control of which team members can request products or services and who can approve those requests. You can also integrate the system with your existing authorization and authentication tools. Even better, back up your electronic records on an external database, SharePoint site, or Google Drive for extra peace of mind.

Saved Money, Time and the Environment

Your vendors’ information can be efficiently saved in one place when you use an electronic PO form, meaning you don’t need to look in multiple spots for different details. When you don’t use paper, you’re also being environmentally friendly and boosting your store’s image by the number of trees you’re saving. It’s also incredibly convenient to instantly send orders and automatically save a record of them.

All of this saves time, meaning your team members can focus themselves on more important things. After all, manual PO processing is time-consuming and repetitive. It doesn’t make the best use of anyone’s expertise and can be a real time suck.

On top of this, you’ll save money. With automated PO systems, you can more easily see your spending patterns. All you need to do is scan through the electronic documents to see pending orders, the status of others, and payments that are due. This way, you’ll be able to compare different departments’ spending to see which suppliers yield the most profit. In fact, the Center for Advanced Procurement Strategy found that companies can incur a cost of anywhere from $50 to $1,000 per purchase order. When you use automated POs for Shopify, that cost can be drastically reduced.

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How to Automate Purchase Orders for Your Shopify Store

If you’re unsure how to automate purchase orders in Shopify, it’s easy with Simple Purchase Orders. You can manually create automated POs to send for existing orders in your Shopify store. Just follow this simple process.

Add Products to a Supplier

If you haven’t already done so, you’ll need to add all products in the orders you’re working with to a supplier. To do this:

  • Go to the orders page and select the orders you want to create POs for.
  • In bulk actions, select “Auto Create POs”.

spo add products to supplier

At this point, all of the POs will be generated and sent to your suppliers. You’ll see a summary of what’s happened:

spo summary pos to supplier

Send Automatic POs on All Orders Marked as Paid

  • Go to Settings and select “Turn on/off fully automatic PO sending”.
  • Once enabled, the app will receive all future orders that are marked as paid or created in Shopify (depending on the option you choose).
  • It will then use the automatic process to create and send POs to your suppliers.

SPO send automatic POs paid orders

Create a PO from a Product

From “Home” > “Products”:

  • For a listed product already linked to a supplier, click “Create PO”
  • The item gets added. If you have more than one variant, there will be the same number of rows.
  • To add more products quickly, click “Add Products” (they won’t be automatically linked to the supplier).
  • Set your quantity and check that your summary has been updated at the bottom.
  • Click “Create PO”.
  • You can then select “View PO” or “Email PO” or transfer the items into inventory by selecting the appropriate button.

 

Create a PO from an Order

From “Home” > “Orders”:

  • Be sure your order is linked to a supplier. From there, select “Create PO”.
  • The item gets imported, including quantity and billing and shipping addresses. Tax and shipping get pulled from the supplier by default (but you could have settings set to pull this from the order instead).
  • Select “Create PO”.
  • You can then select “View PO” or “Email PO”. Since it’s an order, by default you can’t transfer the items into inventory but this can be changed in the settings.
  • To see all of the order details, click on the order number the PO is linked to.

 

Create a PO from a Supplier

From “Home” > “Suppliers”:

  • Be sure you’ve set up a supplier and linked products to that supplier. From there, select “Create PO”.
  • All products linked to that supplier will be automatically imported. You’ll see a cost price and minimum quantity if you’ve set these parameters. The same goes for default tax and shipping for that supplier. Everything else comes from the settings.
  • Select “Create PO”.
  • You can then select “View PO” or “Email PO” or transfer the items into inventory.
  • To transfer all items at once, hit “Complete/Transfer” or for each item, hit “Transfer”. Specify the quantity and location you want the items transferred to.
  • Then, the PO will update to “Complete” status.

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