An Electronic PO is a document that outlines the terms of an order, and outlines the agency’s terms and conditions to which both parties must adhere. Electronic PO’s can be generated in a transactional e-procurement system, or directly from an FMIS or ERP system from a requisition, and then sent via electronic means to a supplier for direct upload into their system.
An electronic PO is a document that outlines the terms of an order and the terms and conditions of the agency
Electronic POs are most readily used where:

the purchase is relatively significant and requires terms and conditions to be attached
the purchase is one-off and no existing agreement is in place with the supplier.

There are a variety of methods available for transmission of Electronic POs to suppliers, ranging from an auto-fax or auto-email system, through to transmission via direct connect, EDI style networks, or via a third party connectivity specialist.
Electronic POs aid in governance as all of the purchasing information is stored in a single location

Electronic POs provide benefits including speeding up the order transmission process, reducing errors and retaining a clear log of when orders were sent and what they contained. When fully implemented, this has the advantage of electronically enabling the communication of orders between buyer and supplier, and reduces handling time and eliminates re-keying of order information.

Electronic POs are created through:

creating a PO through a FMIS or ERP system where the requisition and PO data is stored centrally and delivered to the supplier electronically
creating a PO through a stand alone e–procurement system where the PO data is stored for procurement and accounts processing and delivered to the supplier electronically.

Electronic POs are not created by creating a written PO in the traditional method and scanning and emailing it to a supplier. In this situation, although the PO is being transmitted electronically, none of the purchasing detail is being captured and stored centrally in a database.

The advantages of Electronic POs over traditional POs include:

line item detail leads to better accuracy for delivery
easy for the accounts processing department to pay or reject an invoice
speeds up the PO delivery and payment process.

Types of Electronic POs include:

two–way PO match – where the payment is triggered by the invoice
three–way PO match – where the payment is triggered by receipting the order of goods/services and then matched against the invoice.

Blanket order – this involves setting up one blanket order with a total amount and then allowing multiple invoices to draw down upon the blanket order. Blanket orders are typically used for contract agreements where the total amount is known or estimated and invoices are sent periodically. A two–way or three–way PO match can be used with a blanket order.

The main advantage of using Electronic POs is that if the supplier is able to receive the PO information electronically, they may be able to upload it directly into their order management system. This has the benefit of both avoiding re–keying data by sales operations staff, as well as minimising any chance for errors in the order. By keeping the ordering information electronic from start to finish the process is quicker, reduces errors and provides a clear governance and audit trail.

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