Best Purchase Order Software for QuickBooks

 

Controllers & Finance managers: Are you looking for a purchase order software that integrates with QuickBooks Online or QuickBooks Desktop?

In this article, we will break down different options that are available to you in helping with streamlining your procurement process.

If you are a small operation and create less than 10 purchase orders a month, this might not be the right strategy for you. In that case, we recommend using QuickBooks Purchase order functionality.

By implementing a Purchase Order Software that works with QuickBooks, our Clients have seen the following results

  1. Up to 45% reduction in the purchase approval process. By getting rid of manual email-based approvals, companies not only improve productivity but also increase purchasing compliance and have better supplier management.
  2. Up to 30% reduction in time spent on processing invoices. By automated Bill creation in QuickBooks, you eliminate the need for manual data entry.
  3. Better spend visibility for CFO’s because now they can see what is being purchased and by whom.

Here is what we are going to cover:

  1. What to expect from a purchase order system and why QuickBooks might not be a good option for a purchase order system.
  2. Two different categories of purchase order systems.
  3. Three different options for purchase order systems.

Before we get started, download the purchase order system selection guide and follow along to select the right system for you.


Download Purchase Order Software Checklist

Then follow along to decide what features are important to you.

How to Make a Purchase Order for Your Small Business with QuickBooks

As we mentioned above, if you are a small operation and creating less than 10 purchase orders a month, you probably don’t need purchase order software.

You very well can use QuickBooks capabilities to create and generate purchase orders.

QuickBooks Online and Enterprise has reasonably good capabilities for creating a purchase order.

You can create a purchase order from the item list (if you maintain one) or you can just enter the description of what you are purchasing.

Here is an example of a QuickBooks Online purchase order:

purchase_order_QuickBooks

The challenge with QuickBooks is that it has a limited set of controls.

For example, if you want to give access to Purchase order functionality, that is not possible.

Controllers don’t want to risk someone messing up with a chart of accounts. They also don’t want costs booked to the wrong account.

If you have a small operation, here is what we recommend.

  1. Setup a basic requisition process so that employees can create requisitions and get them approved by their managers.
  2. After the purchase requisition is approved, have a purchase order document issued from QuickBooks.
  3. Have a single person responsible for entering the purchase order so that you don’t have control issues.

The process is manual but can be effective if you are dealing with a low purchase order volume.

Here are some areas where the above solution is not going to work.

  1. You need better purchasing controls for compliance.
  2. You are creating 10+ purchase orders every month. As the volume increase, it is difficult to scale the manual process.
  3. You want to make it easy for users to create requisitions but don’t want to clutter the item master in QuickBooks with non-inventory items.

If you are dealing with any of the above, read on…

Two categories of Purchase Order Software

We are going to present a few options so that you can decide what option is best for you.

In our view, Purchase order software can be categorized as follows:

Purchase order Software categories

Purchase Order System

The purchase order system only covers the requisition and purchase order processes. With a purchase order system you can:

Automate purchase request and approval process:   

For example, you have a paper-based requisition process. Employees are filling up requisition forms and then sending them to managers for approval. This is a time-consuming process and eats a lot of your team’s productive time.

Automated PO creation:

With automated PO creation, you don’t have to worry about generating purchase orders and sending the purchase orders to vendors.

You can set up a template and the system automatically generates a digital purchase order. You can set up a PO number sequence so that is easy to identify purchase orders.

Once the requisition is approved, you can set it up to automatically create a purchase order and assign the cost to different cost centers. Once the order is generated, you can track open vendor orders.

Reduce time spent on creating purchase:

With a purchase order system, the end benefit is that you can reduce the time spent on processing purchase requisition and purchase orders.

Our Clients have seen anywhere from 30-50% cost reduction with the automation of the purchasing process.

With an average purchase order cost of $65, you can save up to $33/order. 

Not that it is a better process for your employees, a purchase order system pays for itself.

When this makes sense?

As we mentioned earlier, if you are creating more than 10 purchase orders a month, purchase order automation is right for now.

Implement a purchase order software if you are

  1. Manually creating purchase requisitions and sending for approval.
  2. Your employees complain that the purchase requisition process takes a long time.
  3. You create 10+ purchase orders a month.

Purchase Order and Invoicing Software

On the other hand, purchase order and invoicing software help you to automate the entire purchasing and invoicing process.

With an integrated purchasing and invoicing software you can achieve the following:

Automatically match PO’s and Invoices:

Instead of spending time manually matching invoices with purchase orders, you can use an integrated system to automatically link the incoming invoices to purchase orders.

Route Invoices for exception approvals:

After the invoice is matched with a purchase order, there might be exceptions like purchase quantity mismatch or pricing mismatch.

With automatic approval routing, you can reduce the time spent on managing invoice exceptions.

Reduce time spent on matching invoices:

You can reduce the time spent on processing invoices by up to 30%.

This a conservative estimate based on the results we have seen for our Clients. This includes the reduction across the process, starting from entering the invoice to matching and payment.

When this makes sense?

  1. When the invoice matching process is highly manual.
  2. Your vendors are sending invoices that don’t have a purchase order # on them.
  3. AP team is spending 10+ hours every month to match the invoices with purchase orders.
  4. You have a manual process for getting the invoices approved before they can be paid.

Key Features for Purchase Order Software

We tend not to give generic advice on what is the best purchase order software for you. The reason is that it depends upon your objectives.

So here are some key features for each category of purchase order automation solutions so that you can decide what works best for you.

Purchase Requisitions

A purchase requisition is the core functionality for a purchase order software. With purchase requisition automation, you can eliminate the manual purchase requisition process for your employees.

The key here is not to just replace the paper form with an electronic form. Because no one likes to fill forms!

Instead, use this as an opportunity to simplify the purchase requisition process. Here are some ideas

  1. Eliminate data entry by use of catalogs
  2. Reduce the back and forth with finance regarding chart of accounts usage by using system defaults based on the user department and purchase requirements.

Approvals

To get better control over your spending, you need a purchase approval process.

This gives management the ability to control spending as well as manage budgets effectively.

Here are two things to keep in mind:

  1. You need a system that is flexible enough to meet your approval requirements.
  2. With that said, you don’t need to review every small-dollar purchase.

Use approvals as a mechanism to set up accountability for your middle management tier.

Create and Manage Purchase Orders

Once the requisition is approved, you can convert that into a purchase order and send it to the vendor.

With the purchase orders functionality you should be able to:

  1. Convert a requisition into a purchase order and automatically dispatch the PO to the supplier.
  2. You should be able to track the lifecycle of the purchase order. I.e. order acknowledgment, tracking, delivery receipt, etc.

Catalogs

With catalogs, you can make a repeat purchase a breeze for your employees. You can connect with the vendor website or building your own catalog to improve purchasing experience.

If you would like to read more about these features, start here:

13 key features for a purchase order system.

Key Features for Purchase Order and Invoicing Software

The second category of software solutions is an integrated purchase order and invoicing software.

With purchasing and invoicing in one system, you can manage the whole purchase order and invoicing process in one system.

You don’t need to spend time matching invoices and chasing managers for approvals because the system automatically does that for you.

Key features for this category includes what we mentioned above for purchase order software and the following:

Invoice automation for creating invoices

Invoice automation includes capabilities to automate the process of capturing the invoices from the vendors and automatically creating an invoice in the system.

The benefit you get from invoice automation is that you don’t have to spend time manually entering the invoice data into the system.

This can be done in the following ways:

Email Invoice automation:

With email automation, you can ask the vendors to email you an electronic copy of the invoice. The system can then read that email and create an invoice for you.

Supplier portal:

The supplier portal provides suppliers with an easy-to-use interface so that they can submit invoices against open purchase orders.

Electronic invoices:

Electronic invoices are a system-to-system interface where the supplier sends electronic invoices by using a standard like cXML or EDI.

OCR

With the OCR (Optical character recognition) the system eliminates further data entry by reading the invoice PDF document and extracting invoice information like line item details, pricing, etc.

The accuracy of the data extraction could vary from invoice to invoice but you can greatly increase the accuracy by pulling the PO information and matching it with the invoice line items.

3-way Invoice Matching

With a 3-way matching engine, you don’t have to spend time ensuring the accuracy of the invoices and whether they match the purchase order or not.

The system automatically does that for you by looking up the purchase order number and matching the lines.

For example – matching the unit price on the invoice to the price on the purchase order or matching the purchase order quantity with the invoice quantity.

Exception management

With exception management, you don’t have to spend time chasing your stakeholders to approve invoices with exceptions.

 

For example, if after matching you realized that the receipt is missing, then the system can automatically remind stakeholders to create a receipt in the system.

To make the evaluation process easier for you, we have compiled the key features in a checklist that you can download below:

Download Purchase Order Software Checklist

Purchase Order Software Options for QuickBooks: Online and Enterprise

In this section, we are going to present 3 options for purchase order systems that work with QuickBooks. We picked these vendors based on what we hear from the market as top compared products.

We will describe each option based on their solution category, what the system does, key features, and pricing information.

Option1: ProcureDesk

Solution overview:

ProcureDesk provides an integrated purchasing and invoicing solution that works with QuickBooks and other mid-market accounting packages like Xero.

An integrated purchasing and invoicing platform enable complete transparency and strong cost control.

Solution category:

Purchase order and Invoicing Software

Key features:

Purchase requisitions:

With purchase requisitions, you can provide an easy way for your employees to request products or services they need to support the business.

With configurable fields, you can capture all information required for management to review the purchase requests

Here is an example of a requisition screen:

purchase_requistion

Vendor catalogs:

There is no point in implementing a purchase order software and still, have your employees enter in description and details about what they want to purchase.

You just moved them to a pretty purchase requisition form but that doesn’t decrease the time it takes for them to create a purchase requisition.

With catalogs, you can significantly reduce the time spent on creating purchase requisitions.

Internal_Catalog

Not only that, it cuts down the errors in the purchase requisition and avoids back and forth on the purchase orders.

With punch-outs you can directly link the requisition process to the vendor punch-out enabling faster requisition processing.

Punchout-catalog

Approvals:

With a flexible workflow engine, you can route your request for approval to the right stakeholders.

The flexible workflow engine supports approvals based on departments, dollar amounts, budget owners, etc.

purchase_order_approval_workflow

Purchase orders:

Purchase order functionality makes the purchase order creation and dispatches a completely automated process.

ProcureDesk can send the purchase order in the format that works for your suppliers.

For example, email the purchase order to the supplier or send the purchase order electronically via cXMl or EDI.

Digital_purchase_order

Order tracking:

After the order is placed with the vendor, you want the capability to track the orders and mark them received when the vendor delivers the product.

With ProcureDesk order tracking, you can track the purchase order lifecycle. We have inbuilt order tracking to allow you to track your orders across multiple carriers like UPS, USPS, FedEx, and so on.

Budgets:

With budgets, you can approve with confidence!

You don’t have to ever worry about going over budget or worrying about whether you have the budget in the first place.

With budget tracking, the system automatically shows you budget consumption so that you can effectively track your spending.

budget_approvals

Reporting:

Track your spending and cash flow with inbuilt reports and dashboards. With Dashboard, you get a single view of spending across multiple companies.

Whether you want to track spending by the supplier, or by department, Dashboards provide you easy access to your spend data without running reports in your accounting system.

Spend_Dashboard

Invoicing:

With the invoicing module, you don’t have to worry about uploading invoices into the system, matching with PO’s, and then following up with different stakeholders for approvals.

With Invoicing:

  1. The system can import supplier invoices from different sources.
  2. Match the invoices with the purchase orders.
  3. Identify any discrepancies and inform stakeholders about what they need to do.

OCR:

With OCR (Optical Character Reader) you can read the invoice text and then automatically create the invoice.

You don’t have to worry about copy-pasting the data from the invoice into the system and with automated matching, it can easily identify the lines that are being invoiced.

Invoice_PO_3-waymatch

Supplier portal:

The supplier portal provides a self-service mechanism for the suppliers so that they can submit their invoices against a specific purchase order.

It makes it easy for suppliers to submit the invoices but also makes it easy for them to track the status of their payments.

You get the benefit of not entering the supplier invoices and suppliers get better visibility.

Expense management:

With expense management, you can reduce the time spent on entering and processing expense reports.

With expense management:

  1. The system automatically creates the expenses by downloading transactions from the credit card provider.
  2. Users can easily take pictures from their mobile phones and attach receipts.
  3. Managers can easily review the expense before the Accounts payable team processes it.

Inventory management:

Inventory management helps you track inventory of consumables and other products.

With inventory management:

  1. You can manage all the inventory in one single place.
  2. You can easily track where the inventory is used and associate it with different projects.
  3. Avoid inventory stock-outs by tracking on-hand levels and reorder levels.

Pricing:

ProcureDesk pricing starts from $19/user/month and goes up to $50/month.

Here is the break up of different pricing plans

ProcureDesk_Pricing

Option2: Procurify

Solution overview:

Procurify offers an end to end spend management software with purchasing and invoicing capabilities. Procurify claims their software to be intuitive and simple.

By looking at the product screenshots on their website, we agree the product design looks cool!

We are not qualified to comment on the usability portion of the product.

Solution category:

Purchase order and Invoicing Software

Key features:

  1. Purchase requisition: Forms to capture and keep track of purchase requests
  2. Purchase approvals: Ability to route the approvals
  3. Purchase orders: Issue PO’s and generate orders automatically
  4. Reporting: for reporting on spending data
  5. Vendor management: for tracking supplier data
  6. Invoicing: Invoice approvals and 3 way matching
  7. Expense management: for expense reporting and tracking
  8. Budget management: real-time budget tracking.

Pricing:

Procurify does not list its pricing on its website. However, there are different plans to choose from:

Procurify_Product_Pricing___Custom_pricing_packages

KISSFLOW

Solution overview:

Kissflow offers a simple, optimal, and efficient platform to manage and track all of your work

Kissflow is a digital platform that has many solutions. Their Procurement product is part of the digital platform.

Solution category:

Purchase order and Invoicing Software

Key features:

Here are the key features regarding purchase order and invoicing capabilities

  1. Purchase requisition: Forms to capture and keep track of purchase requests
  2. Purchase approvals: Ability to route the approvals
  3. Purchase orders: Issue PO’s and generate orders automatically
  4. Reporting: for reporting on purchasing data
  5. Vendor management: for tracking supplier data
  6. Invoicing: Invoice approvals and 3 way matching

Pricing:

Kissflow starters at $1,990/month billed annually.

kissflow pricing

Kissflow doesn’t break the cost down by features or users.

Purchasing Software with Quickbooks Integration for automated syncs

A key part of the requirements is that any purchase order or invoicing system should sync the data with QuickBooks. You can easily authorize the connection with your QuickBooks account.

This is important for two reasons

  1. You save time by not performing the redundant data entry in QuickBooks.
  2. You avoid any errors related to data entry from one system to another system.

We recommend that the following should be supported by the purchase order system

Master data sync:

With QuickBooks, you can sync master so that it can be used in the transactions. We recommend using the following master data sync from QuickBooks

  1. Item master: so that you can import your item master data into QuickBooks and purchase the items.
  2. Suppliers: so that you don’t have to recreate the data in the purchase order system.
  3. Projects: so that you can allocate cost to the correct projects.
  4. Class: so that you can correctly categorize your expenses.
  5. Chart of accounts: so that the cost can be booked to the right accounts.
  6. Payment terms: so that you can pay your vendors on time.

Transactions sync:

The transaction sync allows you to send the transaction data back to QuickBooks.

This includes the following

  1. Sync purchase order to QuickBooks.
  2. Sync receipts to purchase orders.
  3. Sync Invoices/Bills to QuickBooks so that the order can be closed.
  4. Sync supplier information as it is changed in the purchase order system

The transaction sync should be event-based so that as and when a document is created and approved in the purchase order system, it is automatically sent out to the QuickBooks system.

This saves time and an extra step to sync the transaction data with the accounting system.

Now your turn!

Purchase order and invoicing automation done right can increase the efficiency of your purchasing and invoicing process.

Here is what our clients typical achieve with leveraging purchasing automation:

  1. Reduction in purchase order cycle time by at least 35%.
  2. Reduced time spent on processing and matching invoices by at least 30%.
  3. Reduced cost due to better cost control process.

Download the purchase order selection checklist, and highlight your key requirements:


Download Purchase Order Software Checklist

Then start with evaluating 1-2 options and see what works best for you!

 

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