The Consequences of Eliminating Purchase Orders (POs) [PRO Content]
Earlier today on the public Spend Matters site, I shared Tom Linton’s idea about purchase order (PO) elimination. This is a great concept in theory, provided an organization has the right processes and systems to control internal purchasing and buying activities and to protect against mistakes suppliers might create, accidentally or otherwise, on unsuspecting purchasing and A/P organizations. OK, in fairness, Flextronics still uses plenty of POs (and other similar P2P documents) in their highly automated EDI-centric infrastructure. These errors could include duplicate invoices, use of substitute products or materials, wrong line-level pricing, invoices based on the wrong quantities, invoices impacted by escalation/de-escalation clauses that are tracked incorrectly, etc.