September 18, 2023
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Purchase Orders (POs) play a pivotal role in the financial workflow of many businesses, yet their value is often understated or misunderstood. For those who might be unfamiliar, let's start with the basics.
What are Purchase Orders?
At its core, a purchase order is a commercial document that shows a business’s intention to buy goods from a supplier. The British Business Bank describes it as an invoice in reverse, because it lists the items a business is agreeing to buy, alongside prices and quantities.
The Value Proposition of Purchase Orders
Understanding the inherent value of Purchase Orders (POs) is vital for businesses to fully capitalise on their benefits. Here are three reasons to adopt a robust PO system:
Financial Control: POs ensure that a clear budget for spending is established and that expenditures are kept in check, with any financial commitments being made in alignment with the company’s strategic goals. By defining the terms upfront, companies can better manage their financial flow and reduce the risk of unexpected costs.
Clear Communication: The importance of clear communication with suppliers cannot be understated. When businesses explicitly detail their requirements via a PO, it minimises ambiguities and reduces the chances of receiving incorrect items. This clarity fosters a healthier relationship with suppliers and ensures smooth collaboration in the long run. Maintaining good relationships with suppliers is foundational for future interactions and securing favourable terms.
Why Purchase Orders Often Go Unused
The decision to bypass purchase orders often stems from the perceived complexity associated with them. Many businesses find the process of creating, approving, and managing POs cumbersome with their current tools. This can lead to purchase orders being bypassed altogether, or used incorrectly, for instance POs being raised after the spend has already been committed.
The following statistics are taken from a survey conducted by The CFO.
How Kloo has Revolutionised POs
Here at Kloo, we understand the pain points associated with traditional purchase order processes. That's why we've developed a trans
formative accounts payable software that overhauls the way businesses view and use POs. Here's how Kloo is transforming the game:
Intuitive Purchase Request Creation: With Kloo, raising a purchase request becomes a seamless part of your work routine, meaning you don't have to exit your workflow to start the process. With Kloo, payment requests can be raised in natural language via email or chatbot. Simply request the spend in your own words (no tedious form-filling), the AI will automatically populate many of the the requisite fields such as supplier information, and only ask you for the truly necessary information. Like this, you can raise a purchase request effortlessly, without ever having to even log in to the platform or fill a single form.
Machine Learning at its Best: Kloo's software utilises machine learning to understand the coding of previous POs, predicting your needs, and drastically reducing the need for manual input of data, which is both time-consuming and prone to error.
Automated Approvals: No more chasing down approvals. Our system automatically directs the PO to the appropriate, pre-defined workflow, ensuring timely and efficient processing. Not only does this expedite payments, but automated reminders can prevent bottlenecks in the process, ensuring that each stakeholder performs their part efficiently.
Context is Key: One of the unique features Kloo brings to the table is its ability to provide supplier and historical spend context to the approval process. Approving POs is not just about looking at numbers but understanding the broader context to make informed decisions.
Efficient Invoice Processing: Once an invoice is submitted, Kloo leverages Artificial Intelligence to drive the matching process between the invoice and PO. This minimises discrepancies and accelerates the approval and payment process.
Purchase Orders, when managed effectively, are an indispensable tool for businesses, setting the foundation for financial prudence and effective supplier relationships. Kloo's innovative approach addresses the traditional roadblocks preventing their widespread use. By integrating advanced AI and machine learning, Kloo ensures that the power of purchase orders is accessible, intuitive, and valuable for every business. Dive into the future of efficient and streamlined financial processes with Kloo.
