6 Purchase Order Myths You Need to Know

Consider us the “Mythbusters” of the procurement world. We’ve collected some myths and misconceptions about purchase orders and compiled them here, so we can clear a few things up. Think purchase orders and invoices are the same thing? You’ve come to the right place, friend—let us enlighten you.

1. “My Business Doesn’t Need Them.”

Some business owners think that because their companies are small and don’t do a lot of ordering, purchase orders are an unnecessary extra step in the purchasing process. Purchase orders create a legal contract between you and your supplier, so if your supplier fails to deliver on time and as promised, you have proof of what you ordered and when. Essentially, they provide a paper trail of your business dealings. Plus, you get to say things like, “I need to check purchase order 3521 to confirm the number of glasses we ordered.” Fancy.

2. “Purchase Orders and Invoices Are the Same Thing.”

That’s like saying a horse and a donkey are the same thing. They may have many of the same features, but there’s a world of difference. A purchase order is drafted by the buyer and indicates the buyer’s order. An invoice is drafted by the seller and indicates payment terms, such as the date payment is due if it has not already been made. See? Similar, but not the same.

3. “If My Current System Works, There’s No Need to Change it.”

That “If it ain’t broke don’t fix it” mentality is only good so long as everything works properly. Waiting until something breaks down to make changes might mean you’re too late. Rather than waiting until a formal purchasing system is vital, switching to such a system when you’re small—and getting used to purchase orders when you only have a few—allows you to work the kinks out of the process, and figure out how to make things more efficient.

4. “Purchase Orders Are Too Complicated.”

Unlike your relationship status on Facebook, purchase orders aren’t that complicated. Purchase order templates can be created online, with consistent information (such as your company’s name and contact information) kept the same. Information that varies—such as the items being ordered—can be easily edited.

5. “They’re Only Useful For the Purchasing Department.”

Sure, purchase orders are a great tool for the purchasing department, but they’re also great for budgeting. Having easy access to records of what your company has purchased and when allows you to keep track of your spending, find unnecessary spending and forecast future spending, all of which helps you save money. You do like saving money, don’t you?

6. “They’re Boring.”

Some people really like paperwork, okay? Using purchase orders won’t always be fun, but it won’t always be boring either. Try it out, maybe you’ll even find it therapeutic. Ok so maybe not everyone likes paperwork. But savvy business people like processes. If paperwork is not your jam (and let’s be honest, it probably isn’t), consider moving to an e-procurement platform. E-procurement software like Procurify will digitalize your POs with flexible purchase order software and other purchasing software, storing them in the cloud and making them accessible from any device connected to the internet – even your mobile phone!

Now that we’ve busted some purchase order myths, we suggest if you don’t already use purchase orders, you begin immediately. Trust us, someday you’ll thank us for the advice.