Navigating the pitfalls: Implementing a new purchase order system

Navigating the pitfalls: Implementing a new purchase order system

If I had to pick one process (outside of the core accounting system) which lends itself to automation, it’s moving to an automated purchase order system.

There are numerous benefits of automating the purchase order process– the more obvious ones are:

1. Time saving by removing manual processes and duplicate entries into multiple systems.

2. Removal of paper invoices allows employees who work from multiple locations to access invoices.

3. Proper authorisation of purchase orders and invoices. Compliance with procurement policy can be enforced by only allowing those with proper authority to approve.

4. Control over spend by recording spending on a real time basis.

5. Reduction of human error.

6. Ensuring suppliers are paid correctly and on time.

7. Greater accuracy in accounting reports.

However, having an unsuitable or badly implemented automated system can be worse than a manual one. Here are some pitfalls to avoid:

1. Inadequate assessment of the needs of your business

2. Choosing a system which is overly complex or expensive for your specific business

3. Not involving all stakeholders. In particular those who will be responsible for implementing and using the system

4. Providing insufficient training to staff on the new system

5. Failure to ensure the new system will integrate with your existing systems

6. An inadequate implementation plan.

So how do you avoid the pitfalls?

1. Make sure your existing procurement policy is fit for purpose and will work with your new system.

2. Map out both your current system and what you would like the new system to look like.

3. Research different systems and allow users to get involved in the selection process if at all possible.

4. Provide training in whatever way works best for your organisation. It might be an idea to train some staff to be ‘experts’ so that they can train other staff.

5. Map out how the new system will integrate with your existing systems. For example can you import invoices easily from your new purchase order system to your accounting system?

6. Prepare a detailed implementation plan and share/ agree with all stakeholders. In particular you should have realistic timelines and outline any required transition phase. For example you may wish to stop accepting paper invoices from suppliers but you could decide to phase in this change over a reasonable time period.

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