The procurement process is typically lengthy, starting from purchase requisition until final payment to the vendor. If an error is made even in a single step, the payment to vendors gets delayed. This is when the purchase order flip comes into the picture.
A PO flip is an automated process of transforming a purchase order into an invoice. The word flip indicates this conversion of PO into an invoice.
Below are some of the key components of a PO flip:
A PO flip streamlines the entire procurement process by making the delivery of goods faster, automating the manual process of creating invoices, and increasing supplier satisfaction. The benefits of using a PO flip are:
A PO flip works well when a purchase order perfectly matches an invoice. There is an assumption that the vendor supplies the full quantity stated in the PO. This doesn’t work for every business model. Thus, it is essential to understand the procurement model before starting with a PO flip.
A PO flip assumes that everything in the PO is correct. Other aspects need to be considered, such as price or quantity change which can be edited/modified by the supplier.
In this case, the invoice information will be incorrect, and this may cause serious accounting issues.
Thus, a business should only go for a PO flip if they have a straightforward procurement structure. Also, the supplier price and product remain constant. In such circumstances, a PO flip can help streamline the procurement procedure of your business.
A PO flip digitally converts the purchase order into an invoice. All the line items of the PO are transferred to the invoice electronically. This is done on a real-time basis. The process starts when the customer sends an online PO through the supplier’s portal. This allows the orders to be electronically submitted to the supplier’s system. The software will assign an invoice number, date, and PO details and return them to the buyer.
This work is done instantaneously, thereby improving the efficiency of invoicing process and eliminating the chances of errors.
Any P2P (Procure to Pay)/I2P (Invoice to Pay) automation product will help the buyers and sellers to interact with each other through the purchase process. These web portals convert the purchase order into an invoice in simple steps:
Below are the steps for transforming a PO into an invoice using PO Flip on Clear platform:
These tools help you complete invoice creation and processing within minutes, which could have otherwise taken hours of data entry and proofreading.