{"id":15177,"date":"2024-08-02T13:38:42","date_gmt":"2024-08-02T13:38:42","guid":{"rendered":"https:\/\/trustpair.com\/blog\/purchase-order-process-definition-steps-and-best-practices\/"},"modified":"2025-07-15T13:50:37","modified_gmt":"2025-07-15T13:50:37","slug":"purchase-order-process-definition-steps-and-best-practices","status":"publish","type":"post","link":"https:\/\/trustpair.com\/gb\/blog\/purchase-order-process-definition-steps-and-best-practices\/","title":{"rendered":"Purchase order process: definition, steps, and best practices"},"content":{"rendered":"<p>The manual way of processing a purchase order can cost a business more than $500 for every order, according to APQC. It is worth exploring automation for the purchase order process. Read on to find out a <strong>definition, the steps, and best practices for an optimized purchase order process.<\/strong><\/p>\n<p>Trustpair\u2019s software integrates with different procurement and purchase management platforms that look after purchase orders. It adds a layer of security to these solutions thanks to anti-fraud features. <a href=\"https:\/\/trustpair.com\/gb\/demo-5\/\">Request a demo to learn more!\u00a0<\/a><\/p>\n<p><!--HubSpot Call-to-Action Code --><span id=\"hs-cta-wrapper-f87ea066-7298-4ae0-bcd1-f309efec12d5\" class=\"hs-cta-wrapper\"><span id=\"hs-cta-f87ea066-7298-4ae0-bcd1-f309efec12d5\" class=\"hs-cta-node hs-cta-f87ea066-7298-4ae0-bcd1-f309efec12d5\"><!-- [if lte IE 8]>\n\n\n<div id=\"hs-cta-ie-element\"><\/div>\n\n\n<![endif]--><a href=\"https:\/\/cta-redirect.hubspot.com\/cta\/redirect\/5278241\/f87ea066-7298-4ae0-bcd1-f309efec12d5\"><img decoding=\"async\" id=\"hs-cta-img-f87ea066-7298-4ae0-bcd1-f309efec12d5\" class=\"hs-cta-img\" style=\"border-width: 0px;\" src=\"https:\/\/no-cache.hubspot.com\/cta\/default\/5278241\/f87ea066-7298-4ae0-bcd1-f309efec12d5.png\" alt=\"Nouveau call-to-action\" \/><\/a><\/span><script charset=\"utf-8\" src=\"https:\/\/js.hscta.net\/cta\/current.js\"><\/script><script type=\"text\/javascript\"> hbspt.cta.load(5278241, 'f87ea066-7298-4ae0-bcd1-f309efec12d5', {\"useNewLoader\":\"true\",\"region\":\"na1\"}); <\/script><\/span><!-- end HubSpot Call-to-Action Code --><\/p>\n<h2>What is a purchase order process?<\/h2>\n<p>A purchase order process involves all the steps that are taken <strong>from the order creation to the order closure<\/strong>. It is a part of the overall <a href=\"https:\/\/trustpair.com\/gb\/blog\/procure-to-pay-process-definition-and-challenges\/\">procurement process.<\/a><\/p>\n<p>The orders process can differ depending on the size of the organization and the industry.<\/p>\n<h2>What are the steps of the purchase order process?<\/h2>\n<p>These are the <strong>seven purchase order process steps:<\/strong><\/p>\n<ul>\n<li>Create the purchase order<\/li>\n<li>Get approval<\/li>\n<li>Send to vendors<\/li>\n<li>Negotiate the contract<\/li>\n<li>Receive the goods<\/li>\n<li>Perform three-way matching<\/li>\n<li>Close out the order<\/li>\n<\/ul>\n<h3>Create the purchase order<\/h3>\n<p>Create a purchase request. <strong>Your business will need to identify what you want to purchase<\/strong>, how much of it, the time frame involved, and your budget in order to requisition supplies.<\/p>\n<h3>Get approval<\/h3>\n<p>Next, your company will <strong>send this request off for approval to the relevant people in your organization.<\/strong><\/p>\n<p>Depending on the size of the company, there could be differing layers of approval. For example, in large organizations, multiple approvals may be needed, including one from the head of finance.<\/p>\n<p>An approval could be verbal, over email, or via paperwork. If manual processing takes place, it can be really time consuming, especially with hundreds of suppliers.<\/p>\n<p>Considerations will include as to whether it aligns with the budget pre-approval.<\/p>\n<h3>Send to vendors<\/h3>\n<p>Following approval, the chosen suppliers will <strong>receive the purchase order.<\/strong> These vendors can then provide bids on the purchase order. Alternatively, if a buyer is more set on one supplier to cover an order of items or services then it may just go to them.<\/p>\n<p><span style=\"font-weight: 400;\">Learn more about vendor onboarding <\/span><a href=\"https:\/\/trustpair.com\/gb\/platform\/vendor-onboarding\/\"><span style=\"font-weight: 400;\">here<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3>Negotiate the contract<\/h3>\n<p>The buyer and the chosen supplier or suppliers must agree to<strong> a legally binding contract on a document.<\/strong> This would usually include details like the terms and conditions.<\/p>\n<h3>Receive the goods<\/h3>\n<p>The goods or services will arrive from the supplier. It is your company&#8217;s role to then<strong> check they match the purchase order process documentation<\/strong> and meet your expectations in terms of the required quality.<\/p>\n<p>The supplier or suppliers will also provide an invoice or invoices for the goods.<\/p>\n<h3>Perform three-way matching<\/h3>\n<p>This step ensures that <strong>all parties have what they require.<\/strong> If the goods are at the expected standard, the buyer then needs to check the goods receipt, the purchase order, and the invoice.<\/p>\n<p>Once the three-way match is complete, the purchase order invoice can be passed onto the financial team for payment delivery. Following the accounts payable being paid, the order can be closed and all of the steps are complete.\u00a0<!-- end HubSpot Call-to-Action Code --><\/p>\n<h2>Best practices to optimize the purchase order process<\/h2>\n<p><span style=\"font-weight: 400;\">Here are some best practices for how to<strong> improve the purchase order process<\/strong>. For best practices to optimize the entire procure-to-pay process, <\/span><a href=\"https:\/\/trustpair.com\/gb\/blog\/5-best-practices-to-optimize-your-procure-to-pay-process\/\"><span style=\"font-weight: 400;\">read this article.<\/span><\/a><\/p>\n<h3>Analyze your purchase order process<\/h3>\n<p>By taking a look at your purchasing processes, <strong>you can identify ways to improve<\/strong>. Thoroughly investigate each step and whether it is being done as effectively and smoothly as possible.<\/p>\n<p>For example, in the approval stage, could you potentially have four people giving the go-ahead for the purchase instead of six. Small changes could help avoid potential bottlenecks in the future.<\/p>\n<p>We would also recommend that you deploy the <a href=\"https:\/\/trustpair.com\/gb\/blog\/is-the-4-eyes-principle-the-most-effective-way-to-block-fraud\/\">four-eyes principle<\/a> in the approval phase. Each verification step of your approval process is given to different employees to improve overall security.<\/p>\n<h3>Put in place clear guidelines<\/h3>\n<p>Having <strong>accessible, clear, and transparent guidelines and a purchase order process flowchart<\/strong> will ensure that everyone in the team is on the same page about the steps for purchase orders.<\/p>\n<p>In order to make the correct payments at point of sale (POS), the purchase order process in accounting must be clear.<\/p>\n<p>The guidelines should include who is in charge of the approvals and how to contact them if you need to move the process along on your side.<\/p>\n<h3>Outline preferred vendor and vendors<\/h3>\n<p>Have your preferred suppliers for varying potential purchases ready to go in a list. <strong>This will make the choosing process simpler<\/strong> as the ideal options will already be there and no research will be required.<\/p>\n<h3>Set KPIs<\/h3>\n<p>Putting together key performance indicators that contribute towards <strong>an effective purchase order process<\/strong>. This could look like numbers surrounding approval time or the speed of delivery of purchase orders.<\/p>\n<h3>Put a staff member in charge of the process<\/h3>\n<p>If you have an internal staff member in place to oversee the purchase order process, they can be a touchpoint for any employees who have queries.<\/p>\n<h2>The benefits of technology for purchase order processing?<\/h2>\n<h3><strong>Integration capabilities<\/strong><\/h3>\n<p>Purchase management and procurement platforms offer <strong>integration capabilities <\/strong><span style=\"font-weight: 400;\"><strong>with other tools like Trustpair<\/strong>, best-in-class <\/span><a href=\"https:\/\/trustpair.com\/gb\/fraud-prevention-software\/\"><span style=\"font-weight: 400;\">fraud prevention software<\/span><\/a>. This can add a security brick to these solutions thanks to anti-fraud features including consistent data monitoring in real time.<\/p>\n<p>For example, Trustpair may integrate with a purchase order process in SAP.<\/p>\n<h3>Saves time<\/h3>\n<p>Technology can automate certain tasks that <strong>save time and offer more efficiency.<\/strong> This means that employees can spend more time on other high-priority tasks.<\/p>\n<p>The automation should also increase the overall purchase order process speed.<\/p>\n<h3>Increases visibility<\/h3>\n<p>As purchase order data is held in one single place with a tool, <strong>it increases the visibility that employees have<\/strong>. It also streamlines the visibility process as data can be found quickly.<\/p>\n<h3>Increased accountability<\/h3>\n<p>A digital trail of the purchase order system will <strong>increase accountability.<\/strong> For example, you will be able to see who has approved the purchase order and when.<\/p>\n<h3>Use less paper<\/h3>\n<p>Simply put, one of the benefits of technology and automation tools is that there is less paper in play. This means that there is <strong>less spend on printing costs and your company&#8217;s carbon footprint should be reduced.<\/strong><\/p>\n<p>Get all the latest procurement trends and expert tips for your procurement processes in <a href=\"https:\/\/trustpair.com\/gb\/resources\/ai-cyber-risks-and-global-crisis-procurement-teams-adapting-to-an-evolving-landscape\/\">our Deloitte co-branded white paper!<\/a><\/p>\n<p><!--HubSpot Call-to-Action Code --><span id=\"hs-cta-wrapper-bda0ce33-c370-4f31-a65d-0bf9b1cb6642\" class=\"hs-cta-wrapper\"><span id=\"hs-cta-bda0ce33-c370-4f31-a65d-0bf9b1cb6642\" class=\"hs-cta-node hs-cta-bda0ce33-c370-4f31-a65d-0bf9b1cb6642\"><!-- [if lte IE 8]>\n\n\n<div id=\"hs-cta-ie-element\"><\/div>\n\n\n<![endif]--><a href=\"https:\/\/cta-redirect.hubspot.com\/cta\/redirect\/5278241\/bda0ce33-c370-4f31-a65d-0bf9b1cb6642\"><img decoding=\"async\" id=\"hs-cta-img-bda0ce33-c370-4f31-a65d-0bf9b1cb6642\" class=\"hs-cta-img\" style=\"border-width: 0px;\" src=\"https:\/\/no-cache.hubspot.com\/cta\/default\/5278241\/bda0ce33-c370-4f31-a65d-0bf9b1cb6642.png\" alt=\"New call-to-action\" \/><\/a><\/span><script charset=\"utf-8\" src=\"https:\/\/js.hscta.net\/cta\/current.js\"><\/script><script type=\"text\/javascript\"> hbspt.cta.load(5278241, 'bda0ce33-c370-4f31-a65d-0bf9b1cb6642', {\"useNewLoader\":\"true\",\"region\":\"na1\"}); <\/script><\/span><!-- end HubSpot Call-to-Action Code --><\/p>\n<p><strong>Recap<\/strong><\/p>\n<p>The key steps in the purchase order process involve creating a purchase order, approving it, sending it to a vendor or vendors, and negotiating a contract. Then, you should receive the goods, and complete a three-way match before paying the invoice and closing the purchase order. Trustpair can secure the procurement process by integrating with procurement platforms and adding security.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The manual way of processing a purchase order can cost a business more than $500 for every order, according to APQC. It is worth exploring automation for the purchase order process. Read on to find out a definition, the steps, and best practices for an optimized purchase order process. Trustpair\u2019s software integrates with different procurement [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":15178,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[138],"tags":[],"class_list":["post-15177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement-gb"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Best practices for the purchase order process - Trustpair<\/title>\n<meta name=\"description\" content=\"The purchase order process is critical for businesses to manage their P2P cycle. 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