ap automation

How Automatic Purchase Order (PO) Approval Workflow Benefits Maintenance Workers & Service Technicians

In this blog series, we show how Palette’s AP Automation and purchase order approval software for indirect procurement makes a difference, role by role, to the people in an automotive manufacturing firm. It highlights how our automated PO approval technology can impact all of the people purchasing and invoice processing touches, empowering roles in the organization with transparency and accountability. This article shows the benefits of purchase order approval workflow for maintenance and service roles.

The purchase order approval process – Before and After

Purchase order approval software will change your accounts payable workflow in a few very significant ways, providing a plethora of different benefits for your organisation. How? Continue reading to find out.

Down below we’ve outlined how a purchase order approval process might without using automatic PO approval software, and how it will change and look looks after using it, in a maintenance and service role setting.

Before

The maintenance worker’s focus is to keep equipment running so that parts will be manufactured in time to keep customer’s plants in production.

With the introduction of Just in Time Manufacturing, the consequences of having a machine down include financial penalties, lost revenue, and the threat of losing a contract.

A press might have broken down and you only have 24 hours to get it up and running again. Or you face the danger of shutting down a production line at Ford, GM, or Chrysler where fines of thousands of dollars per minute are the norm.

You can try to change the tool and manufacture the parts in a different press, but first you need to ensure the job you bump doesn’t have its own consequences. Different presses have different burden rates so the company’s profit margin is directly impacted by your decision.

With decisions like this you would likely engage with various levels of plant management to shoulder the burden. Together you will decide on a strategy moving forward.

Let’s say that the crisis is averted and all is well, but you need to re-stock supplies that you depleted with the last maintenance project. You go to your desk and manually write out purchase orders, one per vendor. These are actually purchase orders, not purchase requisitions. They are on carbon copy forms that need to be physically signed off by your approvers.

You have a file of all your carbon copies into the purchase order process flow and you can look back to see what you have ordered in the past, something you do manually. The POs require you to write the entire GL account string on the form so that it can be used by AP when they post the invoice. You then hand these POs to your managers (and their managers) to get signatures based on the dollar amounts they can approve.

There are no checks in place to ensure that you have provided all the required purchase order approval signatures.

Once that is complete, you keep your copy of the PO, send one copy to AP, give one to the plant administrator and send one to the vendor.

Occasionally you may convey a PO number to a vendor with the intention of completing the paperwork, but something distracts you and you neglect to finish it. In a day or two, you use that same purchase order form, forgetting that you gave the PO number out to the other vendor.

You fill out the PO for a different vendor for a different item or service. Now when these 2 invoices come in, AP has no way of knowing what happened, and an investigation starts to find out what might have happened in the purchase order approval workflow. This is waiting to take up your time in the near future – but for now all is well again.

After

You have less paperwork and more time for maintenance. Palette’s purchase order approval system retains the purchase history and tracks PO numbers, eliminating any confusion around duplicated documents.

You can use an old requisition to create a new one, making repeat orders simple to manage. You don’t have to know the chart of accounts because the proper GL accounts are programmed in.


“The system takes care of managing approvers, and there is a drag and drop workflow if you need to reroute an item.”


You stop getting calls from AP with vendor and purchase order approval issues because of the visibility they have into your purchases. You’re relieved from many tasks around accounting and finance – which was really not part of your job description in the first place.

Functionalities of Palette’s Automatic purchase order approval workflow

As you can see, an automatic purchase order approval system can, and will, completely change your purchase order approval process. Using Palette’s AP automation solutions, you gain access to the following functionalities:

  • Automatic notifications and reminders
  • Drag and drop functionality for ad hoc re-routing
  • Visibility into payment/approval status of invoices
  • Email approvals with one-click functionality in mobile
  • Approvers get a complete package to review including invoice, PO, goods receipt, and messages
  • No expensive coding or user licenses necessary

Benefits of an purchase order approval system

Purchase order approval systems can completely revolutionize your PO approval workflows, streamlining it, saving both time and money. Here are the eight major benefits you can expect from deploying Palette’s PO approval solution:

  • Reduce the time spent on your indirect procurement processes
  • Ensure high-quality data
  • Eliminate maverick spending
  • Improve control of your purchase to pay processes
  • Achieve real-time cost control
  • Easy access to historic data
  • Simplified internal PO approval workflows
  • Improved data security
  • Less people dependent workflows compared to manual processes

Palette’s purchase order approval software

Create better, faster, smarter, and easier PO approval workflows with our AP automation solutions. Whenever you, supervisors, and employees are having to spend more time tracking, sharing, and in other ways managing invoices than actual work ー it’s a sign your purchase order process flow would benefit from becoming automated.

Contact us to find out more about how we can help you automate and optimize your accounts payable workflows.

This series is excerpted from our Whitepaper on the Benefits of Purchase to Pay.