June 18, 2025
Every company engages in purchasing, from acquiring inventory for sale to securing equipment for operations and maintaining necessary supplies. To maintain fiscal responsibility, businesses establish a purchasing process or management system. Given the variations across industries and companies, the central question becomes: how does one have effective purchase order management for business success? Let's delve into this process and explore valuable recommendations.
Understanding the Purchase Order Process
Individual companies develop unique versions and procedures for each step in their purchasing. Often, purchasing involves multiple stages, including an approval workflow we'll discuss later.
Initiating Purchase Requests
Many acquisitions start with a request. Employees might submit these requests verbally or in writing. Subsequently, evaluating the urgency of these requests demands specific skills. Prioritization hinges on factors like necessity and budget.
A request might gain verbal or written consent, yet maintaining documentation benefits both records and the accounting department. For numerous organizations, a computerized maintenance management system (CMMS) serves as a central hub for both requests and the subsequent purchase order phase. For example, the system administrator can configure an approval sequence where a supervisor or manager must authorize the request or order. Upon managerial approval, the process advances.
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