Purchase Orders
What are Purchase Orders?
A purchase order (PO) is basically your customer's official way of saying "yes, we want to buy this stuff from you." It's a document that lists what they're ordering, how much, at what price, when they need it, and where to send it. Think of it as a legally binding shopping list that triggers your entire fulfillment process.
Here's the thing though - most companies still handle purchase orders like it's 1995. They're printing PDFs, manually entering data into their ERP, and wondering why orders take forever to process. Let's talk about what actually happens with POs in the real world, and why automation might save your sanity.
How Do Purchase Orders Really Work?
The Theory vs. Reality
In theory, purchase orders are straightforward. Your customer creates a PO in their system, sends it to you, you process it, ship the goods, send an invoice. Simple, right?
Not even close.
What actually happens is your customer sends you a PO as a PDF attachment to an email with the subject line "ORDER" (thanks, super helpful). Or maybe they fax it. Yes, fax. In 2025. The PO might be in their weird custom format that looks nothing like your last three customers' formats. Half the time, the ship-to address is different from the bill-to address, but they forgot to specify which is which.
Your order entry team then gets to play a fun game called "manually type all this into our system while hoping we don't transpose any numbers." They're copying product codes, quantities, prices, dates - all while juggling phone calls from customers asking "did you get my PO yet?" (It's been 37 minutes, Karen.)
The Special Cases That Break Everything
And this is before we even talk about PO amendments, partial shipments, or the special joy of customers who send POs for products you don't even sell anymore. Look, your customers aren't trying to make your life difficult. They're using whatever system their company bought in 2008, following processes someone's manager's manager created, and they just want their stuff to arrive on time.
Why Do Purchase Orders Drive Everyone Crazy?
Let's be honest about the pain points here. Manual PO processing is slow. We're talking hours or days to process what should take minutes. Your team is typing (and retyping) the same information into multiple systems. Every manual touchpoint is a chance for errors - wrong quantities, incorrect pricing, shipping to the wrong location.
Then there's the format chaos. Every customer thinks their PO format is standard. You've got customers sending Excel sheets, PDFs, emails with orders in the body text, and occasionally someone innovative who sends a photo of a handwritten PO. (Yes, really. I've seen it.)
The real killer? Lack of visibility. Once that PO enters your manual process, it disappears into a black hole. Customers can't track their order status, so they call. And call. And call. Your sales team spends half their day answering "where's my order?" instead of, you know, selling.
This is exactly why companies automate order processing - to eliminate these constant bottlenecks and visibility gaps.
Don't even get me started on rush orders. A customer marks something "URGENT" and it sits in someone's email inbox for two days because that person was out sick. By the time you catch it, you're expediting shipments and eating the extra costs just to keep the customer happy.
How Does Automation Handle Purchase Orders?
Here's where automation changes everything. And I'm not talking about some fantasy future - companies are doing this right now with platforms like Esker, or well-configured ERPs with EDI capabilities through SPS Commerce or TrueCommerce.
Automated PO capture means those PDFs, emails, and even (sigh) faxes get automatically read and extracted. OCR technology has gotten scary good at pulling data from any format. Your customer can send their PO however they want, and the system captures it. No manual entry.
The system validates everything instantly. Is this a real customer? Do we sell this product? Is the pricing correct according to their contract? Any issues get flagged immediately, not three days later when someone in the warehouse realizes you don't have that SKU anymore.
But here's the beautiful part - straight-through processing. Valid POs flow directly into your ERP or order management system. No human touches it unless there's an exception that needs review. We're talking about processing orders in seconds, not hours.
Your customers get instant confirmation that you received and accepted their PO. They can check order status anytime without calling. Your team handles exceptions and complex orders instead of doing data entry. Modern automation platforms report that 70-80% of orders process without any human touch. That's the majority of your order volume that just... handles itself.
What AI-Based Systems Do Differently
But here's the real game-changer - AI-based automation learns from every PO. It recognizes that Customer X in Phoenix always abbreviates "aluminum" as "alum" in their line items. It knows that Customer Y's "rush" orders actually mean two-week lead times based on historical patterns. It predicts which POs will have issues before anyone reviews them.
AI handles format variations that would break rules-based systems. Customer changes their PO template? The AI adapts automatically. New customer sends a completely different format? The system learns it. This isn't just faster processing - it's intelligent processing that gets better over time.
Handling Complex Purchase Orders
"But our POs are complicated!" Yeah, I hear this a lot. You've got blanket POs that cover multiple shipments over time. Or customers who send one PO with 200 line items across different warehouses. Maybe you deal with configured products where every order is basically custom.
Modern automation handles this too. Line item validation checks each product individually. The system can split orders across multiple warehouses automatically. It handles partial shipments, backorders, and drop-ships. Manhattan Associates and Blue Yonder are built specifically for complex B2B distribution scenarios where every order has its own special requirements.
Even amendments work smoothly. Customer needs to change quantities? Add items? Update the delivery date? The system captures the amended PO, compares it to the original, and processes the changes. No more printing out both versions and highlighting differences with a yellow marker. (You know you've done it.)
How Can You Actually Make Purchase Orders Work?
If you're still processing POs manually, you're probably thinking "this sounds great but also impossible for us." Fair. But you don't have to automate everything at once.
Start by looking at your PO volume. If you're processing more than 50 POs daily, automation will pay for itself within months. Even at 20-30 daily POs, the reduction in errors alone might justify it. Track how long PO processing actually takes - include all the back-and-forth, corrections, and customer service time. You'll be horrified.
Pick your battles. Maybe automate your top 10 customers first - they probably represent 60% of your order volume anyway. Get their PO formats dialed in, then expand. Or start with simple orders and keep complex ones manual initially.
And please, for the love of all that is holy, give your customers a portal where they can check their order status. Even if everything else stays manual, just this one change will cut your customer service calls in half.
Frequently Asked Questions About Purchase Orders
What if our customers won't follow a standard format?
They won't. Accept it. That's exactly why you need automation that handles any format. The technology adapts to your customers, not the other way around. Forcing customers to use your portal or format is a great way to lose customers.
How do we handle pricing discrepancies?
Set tolerance levels. Maybe you auto-accept if the PO price is within 2% of your system price. Anything outside that range gets flagged for review. You can set different rules for different customers. Your biggest customer gets more flexibility than someone ordering twice a year.
What about POs that reference quotes?
Good automation platforms can match POs to existing quotes. The system sees "per quote #Q12345" on the PO, finds that quote, and validates against it. This is exactly the kind of thing computers are better at than humans.
Don't we lose the human touch?
You lose the human data entry. Your team can focus on actually helping customers with complex requirements, solving problems, and building relationships. Nobody ever said, "I love working with that supplier because they're so good at typing my orders into their system."
Still manually entering purchase orders while your competitors ship same-day? See how order automation handles the complete PO complexity - multiple line items, special instructions, ship-to addresses, delivery dates - without the data entry marathon. Because when customers send 50-line POs with split shipments, manual entry isn't just slow - it's where expensive mistakes hide.