Order Acknowledgement

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What Is Order Acknowledgement?

An order acknowledgment is a confirmation by the vendor that they have received the buyer’s purchase order. 

By acknowledging the order, the vendor also can confirm if they accept the order as-is or request any changes if required.

For example, if a buyer orders a back-ordered or discontinued item, the vendor can inform the buyer about that. 

The vendor’s acknowledgment ensures that the order will get delivered on time, or at least the vendor has the option to provide a revised date. 

With an order acknowledgment process, you can plan for your deliveries and ensure that you don’t run out of critical parts. 

Order Acknowledgment Process

Here are the typical steps in an order acknowledgment process:

1. Issue the purchase order

The first step is to issue the purchase order to the vendor. If you are using a manual purchasing process, this involves creating the purchase order and then emailing the vendor.

If you use a purchasing system, the system takes care of issuing the purchase order and then sending it to the vendor. 

2. Acknowledgment by the vendor

The next step is for the vendor to acknowledge the order based on the agreed-upon process. 

The vendor can email the acknowledgment or use a system for doing that. The options are discussed in more detail later. 

The vendor typically sends the following information:

  1. The vendor confirms that the order has been received. 
  2. The vendor confirms they have items in stock and ship per the agreed date.
  3. If the items are unavailable, the vendor sends back the details for back-ordered items.
  4. In some cases, the vendor might suggest an alternate product that is readily available. 

3. Revision of purchase order

The revision of the purchase order is optional because it is only required when the vendor cannot deliver the order as-is. 

It might include changing the promised delivery date or changing the products purchased to different SKUs altogether.

Order Acknowledgment Options

There are primarily two ways for the vendors to acknowledge a purchase order. 

Email

Email is the most common way for the vendor to acknowledge the order. It is easy to start, and you don’t need any infrastructure to support this. 

All you have to do is to include the instructions for order acknowledgment when you email the purchase order to the vendor. 

Many companies that use emails for acknowledgment have a dedicated email for acknowledgments. 

A buyer then takes ownership of updating the order status based on the email from the vendor. 

If an order needs to be changed, the buyer takes care of changing the purchase order. 

Purchasing system

If emails are a little overwhelming for you, you can use a purchasing system to request acknowledgment of the order. 

If you are already using a purchasing system to issue the orders to the vendors, then include the instructions in your purchase order process

With a purchasing system, the supplier can click on a link to open the supplier portal and acknowledge the order. 

The purchasing system notifies the buyer when the order is acknowledged, and the status is updated to reflect that.