A Guide to the Purchase Order Number: Why It Matters, How to Create & Use It
If you own a business that involves selling or buying goods or if you are just a shopaholic, then you are closely associated with a unique number that is given to your order, particularly known as a purchase order number. A purchase order number is nothing but a specific combination of numbers given to your particular purchase order. This number does not get repeated and cannot be assigned to any other order. With the help of this number, buyers and sellers can track their order and make sure that the order is delivered or received successfully. That means this PO Number is very important for customers and vendors.
Why is PO Number important?
A Purchase Order (PO) number is unique for every order and important information about the product like tracking the order, estimated delivery date, payment information, size and weight of the package, and any other development in the order can be traced using this unique PO Number.
A PO number also helps in avoiding duplicate orders and sudden rises in the price. Once you receive a PO number, then it means that the order is placed. Sometimes, some vendors increase the price of products, but as long as you have an invoice with a PO Number on it, you do not have to pay the extra amount. You will only be paying the amount decided at the time the PO number is generated.
PO numbers are also helpful in tracking the finances. They are needed during financial audits. PO numbers also help in keeping track of all the orders.
PO numbers can be used as a legal document and proof of purchase orders. They help in avoiding miscommunication, and in case of any disputes, they come in handy as solid proof proving the purchase.
Whenever any product is purchased, the first thing the customer receives is the Purchase Order Number. This number acts as a legal contract between the vendor and customer. This proves that the customer has purchased the item, and it is now the vendor’s responsibility to deliver it to the customer.
A PO Number helps in calculating the total cost required for the purchase—for example, man-hours, electricity costs, and other office supplies. This is done using various PO software like Planergy, Coupa eProcurement, Tradogram and more. This helps in deciding the scope of business. This helps in determining how much more resources are needed to run the business smoothly. The businesses will be able to find where exactly the problem lies and can take effective measures to solve them.
Considering all of these factors, it becomes easy to make changes in the business if required to improve sales.
Purchase order numbers are the basis of calculating all the operations in a business.
By calculating the Purchase Order Numbers, businesses can predict the market trends and decide when it is best to launch their new products.
How to create and use a PO Number?
Manual PO Number Generator and Automatic PO Number Generator are the two ways a PO Number is created.
Manual PO Number Generator –
A manual PO number generator is usually considered best if one is managing a small business as there are fewer purchase orders compared to bigger businesses. There is more flexibility in generating PO numbers. Any combination of letters and numbers can be added to make order more specific and easy to understand.
In this method, you have to note down all the details regarding the purchase order, like the vendor’s name, date of validity, etc.
Automatic PO Number Generator –
As the business grows and purchases increase, it is better to shift to an automatic PO number generator. Because as purchases increase, it becomes difficult to assign a purchase order number manually, keep track of it, and manage all the details due to a large number of purchases. There are numerous software available to generate PO Numbers manually.
How to use PO Number –
After the order is placed successfully, an invoice is generated. It is always better to place the PO number where it is easy to read. Usually, PO Number is put on the top of the invoice. There are many templates available to design the invoice easily.
How Fashinza Helps
Be it small or big businesses, finding good manufacturers is a tedious task for everyone. Fashinza is a new-age supply chain and product development platform. Fashinza offers manufacturing as a service solution using a powerful technology platform. Since 2020, Fashinza has helped numerous brands in all kinds of manufacturing supports.
Fashinza helps brands start from selecting suppliers to fabric selection and pre-sample approval, to finally tracking the order. With Fashinza, the process becomes very easy.
PO numbers play a crucial role in the business. PO numbers are firm legal proof of any purchase order. These PO Numbers are helpful in keeping track of all the orders and transactions, financial audits to avoid any miscommunication like duplicate orders and tracking the orders. These PO Numbers help evaluate the growth of the business, study marketing trends, and plan the brand’s growth. Small, as well as big businesses, can reach out to Fashinza for supply chain management, finding suitable manufacturers, and product development as Fashinza aids businesses by helping them reach out to the best manufacturers. Fashinza helps fashion brands for developing menswear, womenswear, kidswear and sportswear. In short, Fashinza is a perfect manufacturing platform for the apparel industry.