One in three SMEs are experiencing inefficient purchase order processing (POP), with half the finance professionals polled unhappy with current arrangements which see them spending a day a month responding to queries, according to a survey by software company Invu
The survey of 200 UK SME finance workers in companies employing 10-250 people, undertaken by Redshift Research, found that. (50%) say POP processes are unsatisfactory and 47% want to see corrective action.
Lack of visibility in the purchase requisitioning process results in finance workers spending on average eight hours per month responding to employee queries regarding the approval of a purchase requisition.
Over one third (35%) say that the current POP makes it difficult to make a purchase on behalf of the company or that they have used workarounds. Over half (57%) of companies do not have a set process for the way goods and services are received into the business.
Almost two thirds (64%) say that employees can use emails to make a purchase request; but 51% also admit that formal paper based purchase requisition forms can be used; and 30% can make a verbal purchase request.
Over a third of the sample (36%) still raise purchase orders manually, while 76% report they use MS Office or a separate purchasing system. A quarter (25%)are able to raise purchase orders POs without a nominal ledger code.
The report warns that this fragmented approach to POP results in poor financial tracking, a high risk of purchase order loss and a lengthy approval process, and says one in three SME businesses are suffering unnecessary costs as a result of poor POP processes.
