The Complete Guide To Understand a Digital Purchase Order

Vikram Deo

Vikram Deo

Senior editor

Parul Saxena

Chief editor

Last updated: July 7, 2021

A Purchase Order provides a legal record and precise guidance for the vendor and a concrete audit trail that will reference when illogical things occur.

Looking for Order Management Software? Check out SoftwareSuggest’s list of the best order management software solutions.

If you use paper-based purchase orders, you create more work than necessary with a range of inherent flaws that you can avoid if you switch to a digital purchase order system.

What is a Digital Purchase Order?

Electronic purchase orders or digital purchase orders are paperless purchase orders that show the purchasing terms and limitations that both the supplier and the purchaser must incorporate. digital purchase orders can be produced directly or from a purchase order in a digital buy order system.

Digital purchase orders set the terms of the transaction while saving complete related documentation in one spot. As a result, digital e-commerce order solutions keep a perfect purchase record, minimize errors, and keep on track of entire purchase procedures.

An excellent digital purchase order software allows seamless exchange of obtaining data between the supplier and the buyer, reducing processing time.

Digital purchase order (PO) systems make proper finance systems and employees can track pending and planned purchases before investing or employing any further payment.

What are the Components of a Digital Purchase Order?

  • Brand names
  • Quantity purchased
  • Products being purchased
  • Rates
  • Company billing address
  • Delivery date
  • Delivery location
  • Terms & Conditions

Digital Purchase Order System vs. Paper-Based Purchase Order System 


In all moves, the digital purchase order system assures accuracy and uniformity. Unfortunately, manual errors, inconsistent purchasing judgments, and mistakes are common in traditional Purchase Order.

Time Management

The purchasing department in the digital purchase order system can devote its efforts to vital projects management like process development. But, on the other hand, the purchasing crew in Paper Purchase Order kills most of their time doing the same things repeatedly. 

Risk Control

Digital system ensures a genuine procedure with no room for compliance matters. Process visibility in traditional Purchase Order. is limited and poses a greater risk of non-compliance issues. 

Smooth Relationship Between Clients

A digital purchase order system reduces worker concerns and progresses a concrete seller-buyer relationship. The case is not the same in traditional purchase orders.

How Does the Digital Purchase Order System Work?

Create buy orders, set up automatic approval routing, and get supplier delivery with the digital purchase software. Your suppliers have access to an online supplier portal where they can access your purchase orders, invoices and issue order acknowledgments and 

A buyer will be generating a purchase requisition and sending it to the appropriate staff person for approval. When the buy request is authorized, it becomes a buy order and is immediately forwarded to the supplier. The supplier acknowledges receiving the purchase order. If the order is met, the supplier converts the Purchase Order into an invoice.

The invoice is matched to the original purchase order and Receipt of Goods in a process known as three-way matching. Matching ensures you are only paying for goods that have been ordered and received. Finally, the invoice goes into enterprise resource planning for payment.

Benefits of Using Digital Purchase Order

The digital purchase order system helps firms control expenses in numerous ways, including control and tracking tools, invoices, and purchase order approvals.

The two main advantages are 

  • A reduction in duplicity.
  • A reduction in payment and invoice errors

Budgeting made easy

It is not possible to budget properly without keeping track of your expenses. An account statement is a tool that aids your business in achieving your organization’s objectives. Budgeting is made easy with digital purchase orders.

No Boundary Restrictions

The primary advantage of digital PO is that there are no boundary restrictions. You can approve or reject POs as per your comfort, and it’s just a click action.

Improves liability

Profitability and corporate success are built on accountability in ways that a paper-based system cannot; digital purchase order keeps your employees accountable in various ways. It ensures if the budget is under control and notifies you immediately if it goes beyond a specific limitation. Any invoice fraudulently and other irregularities are corrected automatically.

Time Reduction

The use of a digital purchase order eliminates the need for human data entry. When it comes to budgeting, less time is spent on tracking obligations and invoice processing. Digital approval processes are quicker than traditional review processes, and a single spot for information saves your searching time.

Easy access 

A digital purchase order system allows you to find previous orders quickly, retrieve information. This information helps you optimize rates and control costs in a better way.

Less manual dependency

When you have a proper system, you don’t have to depend on any individual to know about the transactions. The digital purchasing order system provides everyone with the latest information.

Simplify internal permission

The approval of purchase orders by paper and email is time-consuming. Using a digital purchase order system, you will have a complete overview of all the purchase orders. 

What are the Features available in a Digital Purchase Order System?

If you are buying a digital purchase order system, look for these features.

Automatic Match Generation

Digital purchase order system forms three-way auto, two-way Purchase Orders pairing with associated purchase orders and invoices.

Automated Purchase Order Journey

Instant Reporting

With our user-friendly report medium, you can generate a record and customize a template from the start.

Cloud Storage 

With Cloud Storage (consolidated documentation), you can easily save and retrieve digital purchase orders.

Access to all channels

Allow users to create, manage, and process purchase orders from anywhere.

Permissions with Restrictions

Limited formatting and User-specific licenses make it simple to assign approval tasks.

Instant Reminders

Allow stakeholders to keep informed throughout the purchasing process with instant reminder alerts.

Personalized Workflow

With robust and personalized workflows, you can form a different process flow of actions and decisions.

Flexible data fields

Flexible data fields are used to record data that can’t be monitored using standard fields.

Wrapping Up

If you want to quicken your approval process( from days to just a few hours), an incredibly flexible system, you must opt for the digital purchase order system.

Vikram Deo
With an experience of 11 years, in the industry, and having the uncanny ability to convert difficult concepts into engaging content, Vikram has the ability to perfectly insert gusto into content. When he is not researching about new marketing concepts and writing to attract, he enjoys the occasional fictional books and loves playing with his 2 dogs When he is not researching about new marketing concepts and writing to attract, he enjoys the occasional fictional books and loves playing with his 2 dogs"

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