When it comes to large corporations, purchase orders have been a staple in finance departments. However, they require lots of time and effort to process. These days, modern technology has brought us applications that automate every stage of the purchase transaction, making it a lot less labor-intensive.

Keeping all of this in mind, should more businesses be using purchase orders? Maybe so- there are several benefits to using purchase orders. We’ll take a closer look at these below:

Purchase Orders Increase Efficiency

If you don’t use purchase orders, it’s hard to know if what you received is actually what you ordered and whether or not you received your full order. In addition, it’s hard to enforce accountability and budgets without purchase orders. If you have to look up information in various spreadsheets and cross-check various systems, it takes time. However, if you have purchase orders, you can prevent all of that.

Purchase Orders Reduce Fraud

Another benefit of purchase orders is that you have an audit trail. Purchase orders help prevent internal fraud. For example, it keeps an employee asking for more money than they need to pay for something and pocket the rest.

Purchase Orders Provide Better Information

If you have a purchase order, you have all of the information you need about a purchase at your fingertips. This can help you create a picture of vendor behaviors and purchasing trends- which can help with budgeting, planning, and negotiations.

Purchase Orders Offer Easier Planning/Control

When the appropriate processes are in place, administrators can ensure there is money in the bank before a purchase order goes through. This makes it much easier to plan/control cash flow and establish budgets, which is critical for small businesses.

Purchase Orders Ensure the Accuracy of Records

When you have a purchase order for every transaction, the accuracy of records such as profit & loss statements, income statements, cash flow statements, and other financial records is increased.


While it’s true that purchase orders may equal more work- especially in the beginning- it can be great for your business in the long run. If you want to learn how purchase orders can save your business money, contact BT84 Commercial Capital & Business Solutions.