My History with Web-based Purchase Orders
PO was the first web-based program I had ever bought as the CFO of a multi-store retailer. Prior to that, we used fax machines for the stores to send product requests to purchasing. Sometimes these requests where on a Company form and other times it was simply written out on plain paper in long-hand. The Purchasing Department would take these incoming faxes and make a decision to either issue a PO, transfer the products from another store, or send it back to the store manager with an explanation of why they could not order the requested product. There was constant bickering between store managers and the purchasing people about whether or not the request had been sent timely by the store manager, whether the right products were ordered, and who's fault it was when products ran out.
More importantly, purchasing mistakes were costing us big time in several ways:
Most of these errors were relatively small in amount. But, they were happening with such frequency that in the aggregate it was worth at least one percent of our shrinkage rate and probably producing an inventory level that was twenty percent higher than necessary. Something had to be done.
Our president suggested we check out a relatively new technology at the time called ‘email’ to replace the fax machine. The owner of the web-hosting company that provided our email service said that he could do even better than email by providing us with a software program that would allow the store people to fill out a form on the Internet. Even better, everybody see the lists of outstanding PO's and determine there status. This on-line ordering system eliminated 80% of our purchasing errors almost overnight.
Later I realized that it had also reduced our overhead significantly:
I learned a lot of lessons from this experience to include:
I was so impressed with web-based software's potential to save money that I went into the business. That was over 10 years ago and the current program is in it's third major revision.
Learn More>> Web-based Software Advantages/Disadvantages
© 2009 to 2012 Business Systems Design & Software, Inc.
This Website presents information to educate members of the public on various business subjects. The information on this Website is compiled from a variety of sources. It may not be complete or timely. It does not cover all aspects of any tax, financial or accounting matter. If you have any tax, financial, accounting or related questions, please consult a qualified certified public accountant licensed in your jurisdiction or in the appropriate jurisdiction promptly.