Why You Should Move Away From Paper Purchase Orders ?

Gaurav Baheti
Jul 29, 2022·4 min

Ten Reasons Why Paper-Based Purchase Orders Should Be Banished

Digitization in the procurement process is picking pace now as the businesses try to move on from the global pandemic. The lockdown requirements resulted in disruption of the supply chain link. Many enterprises are forced to move to digitised procurement software to future-proof businesses. Organisations that are unwilling to take this big step forward will drown in paper management when the competitors adopt digital e-procurement. 

According to McKinsey reports, CPOs hope to increase annual savings by 40%, reduce sourcing time by 30% to 50%, and lower value leakage by 50%. Depending on the scope of your business, you can adopt a procurement system that focuses on identifying and creating value or prevents value leakage. 


Source: [https://www.mckinsey.com/~/media/mckinsey/industries/consumer%20packaged%20goods/our%20insights/driving%20superior%20value%20through%20digital%20procurement/svgz-ops-driving-superior-value-ex1.svgz]

Paper-based purchase orders are labour-intensive, cumbersome, and time-consuming. Honestly, your procurement staff hates creating and managing paperwork. It is one of the main reasons for the maverick spend in your organisation. Indirect procurement spending can be vastly reduced by implementing a digital procurement system. 

Following are some reasons why paper-based purchase orders are no more relevant:

1. Slow Process

Needless to say, manual paper-based transactions are slower than digital transactions. Someone has to print the purchase order documents, fill in the relevant details, and then scan the document to send via email or fax. Procurement software creates digital purchase orders which will be sent to suppliers instantly. 

2. Error-Prone

When you choose paper-based POs for your procurement process, you must rely on your procurement staff to manually and correctly fill the details. Human errors are inevitable; even a small mistake can lead to a significant problem when analysing the procurement cost. Automated POs created by procurement software extract details automatically from several documents, and there is only a single source of truth. 

3. No Tracking

When multiple papers and spreadsheets are used to track purchase orders, the procurement staff will not be able to locate any information quickly. You have to sift through various emails and spreadsheets and refer to printed documents to fetch relevant purchase order data. On the other hand, a procurement system requires a single click to obtain all relevant information about any purchase order created at any time.

4. Expensive

Identifying and sourcing cost-effective suppliers is difficult when you follow the paper-based procurement model. The sheer amount of office stationery used in printing and reprinting documents add to the procurement cost. Suppliers who want you to mail the purchase orders to keep a document trail will add to the procurement cost. 

5. Increased Security Risks

When you deal with paper documents and sensitive and confidential information, safety and security are always at risk. Anyone can easily photocopy a confidential document; controlling spreadsheet access is impossible. A procurement solution provides role-based access control, so confidential documents are only available to those with authority. Also, storing the digital records in safe storage vaults ensures data security.

6. Poor Communication

Your procurement staff won’t be able to communicate effectively throughout the procurement process when paper-based purchase orders are used. There is no easy way to share data with the suppliers or send messages to them quickly. Emails are helpful to some extent, but you have to hope that the suppliers open your email that may be in the spam folder. 

7. No Collaboration

For successful procurement, buyers and sellers must collaborate properly to share information and data. Keeping track of outdated information is difficult with paper purchase orders. There may be multiple versions of the same document, and identifying the latest and relevant version is complex. Procurement software, on the other hand, promotes collaboration with an instant connection between buyers and sellers. Everyone will access the same and updated information through the procurement platform. 

8. Productivity Loss

Companies with inefficient business processes lose 20% to 30% of their revenue annually. Manual purchase order processing is tedious, and your procurement staff will spend most of their time trying to fill in the documents manually instead of doing productive procurement tasks. An e-procurement platform automates mundane tasks so that your procurement team has time to work on creating innovation. 

9. Time-Consuming

With a paper-based procurement model, editing or changing any minor detail is not possible directly. The entire document has to be printed again to make changes. Reflecting these changes in every version of the spreadsheet or email is also not possible. A digital procurement process makes it easier to edit details by clicking on the purchase order. The changes will be reflected throughout the platform, ensuring that only current information prevails everywhere. 

10. Increased Carbon Footprint

Printing and reprinting hundreds of documents consumes a large amount of paper, which is not good for the environment. Governments are proposing green business models, and digitization is the best way to reduce your organization’s carbon footprint. Every document you need to store can be stored digitally in PDF format or any other format of your choice using the procurement software.  

Improve your team’s productivity, data accuracy, and efficiency by automating purchase orders using Procol, India’s leading procurement solution. Schedule a demo with us to know how to automate repetitive procurement tasks and improve the scalability of your business procurement.

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