Using Internal Purchase Orders in your Business

Do you track and manage the requests made by your employees to purchase something? Do you know where your employees are spending the company’s money? If the answer is “no,” you are likely losing substantially more money than you realize from these internal requests.

You should consider establishing a requisition procedure for all employees who need materials or items to perform their job. Although your current process may be for the employee to email their manager their request and the manager makes the necessary purchases, this method does not allow you to track purchases or create an effective budget. When you have a requisition policy, it gives your entity the ability not only to supervise employee spending, but also provides your company the opportunity to take advantage of making larger orders and receiving significant volume discounts.

Once you have established a standard requisition procedure, your company can create a more standard purchase order process. In other words, you can contact your suppliers and notify them that you will be providing purchase orders before sending your payment for the items requested. Most suppliers will be pleased because it provides them with protection too. Having a purchase order allows the seller to contact you with any concerns regarding your order. Otherwise, your order will be shipped with an invoice once payment has been received.

Using requisitions and purchase orders to improve efficiency, ability to track expenses, and provide a means for saving money will eliminate many of the headaches that accompany employee purchasing.

If you are interested in learning more about using internal purchase orders or how we can assist you with your business-related needs, contact the knowledgeable lawyers at The Swenson Law Firm to schedule an appointment.