How do you track a partially delivered purchase order?

Record the quantity or value received against the relevant PO lines and leave the outstanding amount open. Check each invoice against what has been delivered and your agreed terms.

What is the difference between a PO number and purchase order tracking?

A PO number identifies an order. Purchase order tracking records what happens to that order, including approvals, supplier communication, deliveries, invoices and closure.

Who should update a purchase order’s status?

Give each stage to the person closest to it. A buyer can own supplier follow-up, an approver can authorise the request, the receiving team can confirm delivery, and finance can record invoice matching. Clear ownership matters more than making one person update everything.

Purchase Order Tracking Guide | Zahara

What is purchase order tracking?

Purchase order tracking involves monitoring a purchase order from its initial request through approval, delivery, invoicing, and closure. It ensures organisations know what has been ordered, delivered, and invoiced, providing visibility into committed spend and outstanding deliveries. Effective tracking helps prevent discrepancies and maintain financial accuracy.

Editor's Notes:

Managing purchase orders can feel like juggling flaming torches — there’s plenty of room for things to go wrong. Effective purchase order tracking is crucial for finance teams to maintain control over spending, ensure timely deliveries, and avoid invoice discrepancies. Let’s dive into how you can streamline this process and keep everything running smoothly.

Jump to TL;DR

What is Purchase Order Tracking?

Purchase order tracking is the process of monitoring and managing a purchase order (PO) from the moment it is requested until it is closed. This involves several stages: the initial request, approval, delivery of goods, invoicing, and finally, order closure. By effectively tracking POs, businesses can have a clear view of what has been ordered, what has been delivered, and what has been invoiced.

Why Does Purchase Order Tracking Matter?

For finance teams, purchase order tracking is essential for several reasons. It provides visibility into committed spend, allowing teams to manage budgets effectively. By tracking deliveries, finance can identify outstanding items that need attention. Moreover, it helps ensure that invoices are accurate and reflect what was actually delivered, preventing discrepancies and potential financial losses.

What Information Should Be Recorded?

Effective purchase order tracking requires meticulous record-keeping. Key information to record includes:

PO Number: A unique identifier for each order.
Supplier Details: Information about the supplier fulfilling the order.
Owner: The individual responsible for the order.
Value: The total cost of the order.
Approval Status: Whether the order has been approved and by whom.
Expected Delivery Date: When the goods are anticipated to arrive.
Goods Received: Confirmation and details of what has been delivered.
Invoiced Amount: The amount billed by the supplier.

The Purchase Order Tracking Process

Raise the Order

Begin by creating a purchase order, ensuring all necessary information is included and accurate. This step sets the foundation for the entire tracking process.

Approval

Once the order is raised, it must be approved by the relevant authority. Delays at this stage can impact the entire process, so it’s crucial to have a streamlined approval workflow.

Send the Order

After approval, the purchase order is sent to the supplier. This step is vital for initiating the fulfilment process.

Receive the Goods

Upon delivery, verify that the goods match the order specifications. This ensures that any discrepancies are identified early.

Match the Invoice

Ensure the invoice matches the goods received and the original purchase order. This step is crucial for avoiding payment errors.

Close the Order

Once everything has been verified and payments are made, the order can be closed. This final step helps maintain an organised record.

Common Problems in Purchase Order Tracking

Despite best efforts, several issues can arise in purchase order tracking:

Delayed Approvals: Can slow down the entire procurement process.
Partial Deliveries: Require careful tracking to ensure all items are received.
Missing PO Numbers: Lead to confusion and potential order mismanagement.
Old Open Orders: Can clutter records and lead to financial inaccuracies.

Comparing Tracking Methods

For smaller organisations, a simple spreadsheet might suffice for tracking purchase orders. However, as the volume of orders increases and multiple teams are involved, this method can become cumbersome and prone to errors. Software solutions, like Zahara, offer a more robust alternative, providing real-time updates and centralised data management.

How Zahara Can Help

Zahara streamlines the purchase order tracking process by connecting approvals, budgets, goods received, and invoice matching in one platform. With Zahara, you can automate workflows, reduce manual errors, and gain complete visibility over your purchase orders, ensuring a smoother, more efficient process from start to finish.

Stay Ahead with Effective Purchase Order Tracking