Poorly drafted purchase orders can throw the entire procurement process off balance. They can lead to insufficient, excess, or wrong procurements. Moreover, a mistake-laden purchase order can set off a chain of events that can cause confusion on both buyer’s and supplier’s sides. Here, we will outline some recurring blunders that procurement teams should be mindful of while creating purchase orders.
Not Mentioning the Shipping Details
Many enterprises use purchase order templates that include the description and amount of the item that needs to be procured with its quoted price – such POs work. However, the absence of shipping details from the PO means the vendor may need to contact you before dispatching the order, thus creating an avoidable delay in the supply chain.
Missing the Complete Scope
It is important to outline the complete scope of the purchase in the PO to ensure you get the right thing. For instance, if you need chocolate semi-sweet 52% (Surfin), you need to mention it in the PO along with its quantity, item category, and code. You can’t hold suppliers accountable for any discrepancy in the delivery of ordered items if the PO has incomplete details.
Using Terms that Are in Conflict with Incoterms
If you are working with international suppliers, make sure your POs don’t contain any term that is in conflict with Incoterms (International Commercial Terms). This is another recipe for creating procurement confusion.
SimplyPurchasing by Microsys is a procurement management software system that lets you create well-thought-out POs in different formats, checking all the relevant boxes and free of any mistakes. The software is also a great solution for improving category and vendor management.