Purchase order software keeps the whole life of an order to a supplier in one place: it shows what needs ordering and when, writes the purchase order with the supplier's prices and minimums, gets it approved if it's large, sends it, then receives the delivery against it, including the short delivery and the freight bill, so what you paid is what your stock is worth. For a small business the value isn't the document, which a template can make, it's what happens around it: knowing an order is late before the shelf is empty, catching the case that never came, and seeing a supplier's prices creep. In the example below, one order of coconut milk and sugar arrives two days late and a case short, and the freight turns a $2.25 can into a $2.44 one. Below is what the software does, when you need it, the example, what to look for, and a template-or-software decision.
The short version
- PO software covers the whole order: when to order, the PO, approval, sending, receiving, the bill.
- The most useful part is knowing what to order before you run out, in days of cover.
- Approval above a threshold keeps big orders visible without slowing small ones.
- Receiving against the PO catches short and over deliveries, and leaves the rest open.
- Freight and other charges belong in the cost of what arrived.
- It should notice when suppliers deliver late or raise prices.
- TaroStack runs the whole cycle, from the reorder list to landed cost, on every plan. More below.
What purchase order software does
| Step | With email and a spreadsheet | With PO software |
|---|---|---|
| Know what to order | Look at the shelf | A reorder list, in days of cover against lead time |
| Write the order | Copy last month's email | The supplier's prices and minimums carried onto the PO |
| Approve it | Ask in the kitchen | Approval above a threshold you set |
| Send it | Email a PDF | Sent and printed from the order |
| Track it | Remember | Overdue orders flagged |
| Receive it | Tick a printout | Received against the PO, short or over flagged |
| Cost it | Add freight later, or never | Freight spread across what arrived |
| Review suppliers | A feeling | Real lead times and price changes |
What a purchase order itself should hold is in what should a purchase order include.
When a small business needs it
A template is enough while you have a few suppliers, one person ordering, and stock you can see from the door. Signs it's time for software:
- An ingredient ran out because nobody noticed the order was late.
- A delivery came short and you paid for the full order.
- More than one person orders, and the same thing gets ordered twice.
- Freight is a real share of what you pay, and it isn't in your costs.
- You can't say which supplier raised prices this year, or by how much.
A worked example: one order, start to finish
Windward Roots, the made-up taro business I use in these examples, buys coconut milk and brown sugar from one supplier, with a 7-day lead time and a $150 minimum order.
Know what to order. Coconut milk is going out at 4.5 cans a day and there are 22 on the shelf: 4.9 days of cover against a 7-day lead time, so an order placed today already arrives late. Brown sugar is low too.
Write and approve it. The PO orders the supplier's whole need in one go, over the minimum and under the $500 approval threshold, so it goes out without waiting:
| Line | Ordered | Price | Total |
|---|---|---|---|
| Coconut milk, case of 24 cans | 4 cases | $54.00 | $216.00 |
| Brown sugar, 25 lb bag | 2 bags | $27.50 | $55.00 |
| Order | $271.00 |
Receive it. The delivery arrives on day 9, not day 7, with 3 cases of coconut milk instead of 4, the sugar, and an $18.00 freight charge. Receiving against the PO records 72 cans and leaves one case open; nobody pays for 96.
Cost it. The freight is spread across what arrived, by value:
| What arrived | Value | Freight share | Landed cost | Per unit |
|---|---|---|---|---|
| 72 cans of coconut milk | $162.00 | $13.44 | $175.44 | $2.44 a can |
| 2 bags of brown sugar | $55.00 | $4.56 | $59.56 | $29.78 a bag |
| Total | $217.00 | $18.00 | $235.00 |
A can that's $2.25 on the price list is $2.44 on the shelf, and every batch of kūlolo that uses it should be costed at $2.44. How landed cost works is in landed cost formula.
Learn from it. The supplier promised 7 days and took 9. Coconut milk was $2.05 a can four months ago, then $2.15, now $2.25, almost 10% up. Neither fact is in an email inbox in a form anyone will notice. How to set the reorder point once the real lead time is known is in lead time calculation formula.
What to look for
| Feature | Why it matters to a small business |
|---|---|
| A reorder list in days of cover | Tells you what to order today, and what's already late |
| Supplier prices, minimums and lead times | So the PO is right the first time |
| Approval above a threshold | Big orders get a second look; small ones don't wait |
| Receiving against the PO, with short and over flagged | You pay for what came |
| Receiving without a PO | The market run and the farmer at the back door still count |
| Landed costs | Freight and duty in the cost of what arrived |
| Real lead times and price creep | The supplier review writes itself |
| Lots and dates at receiving | If you make food or anything with a date |
Template or software?
Use a template while one person orders from a few suppliers and checks deliveries by eye; a good one is in what should a purchase order include. Move to software when orders, deliveries and costs need to talk to each other: when the reorder point should come from how stock moves, when a short delivery should leave an order open, and when the freight should land in the cost of every batch. Purchase order software on its own still leaves your stock in a spreadsheet, so look for software that does both.
Where this stops working
A purchase order in an email is a promise nobody tracks. The supplier's confirmation sits in an inbox, the delivery is ticked off a printout that's thrown away, the freight invoice arrives a week later and goes straight to the bookkeeper, and the cost of a can of coconut milk in the recipe sheet stays at $2.05 for a year.
How TaroStack does it
TaroStack runs the whole buying cycle with your stock, so orders, deliveries and costs agree.
What to order, and when. The reorder list shows days of cover at the rate stock is going out, with a red line where an order placed today would arrive too late. Reorder points are suggested from how stock actually moves. Suppliers carry their lead times, minimums, payment terms and price lists, with a preferred supplier per item, and you can order a whole supplier's worth in one go.
Orders that are checked and tracked. Purchase orders carry approval above a threshold you set, and are sent and printed from TaroStack. Overdue orders and orders awaiting approval show in your alerts. An order can be closed short when the rest isn't coming.
Deliveries that cost what they cost. Receiving works against a PO or with no order behind it, flags over-receiving, and prints a goods-received note; scanning a supplier's GS1-128 case label fills in the lot and use-by date. Freight, duty and other charges are spread across what arrived, so stock is valued at landed cost. TaroStack compares what each supplier promises with how long deliveries really take, and a price-creep report shows who's raising prices.
| The example | Email and a spreadsheet | In TaroStack |
|---|---|---|
| 4.9 days of cover, 7-day lead time | Noticed when it's gone | A red line on the reorder list |
| The short case | Paid for anyway | Received against the PO, the rest open |
| The $18 freight | Never in the costs | Spread across what arrived |
| 7 days promised, 9 taken | Forgotten | Lead times checked against reality |
| $2.05 to $2.25 | Not noticed | Price creep, per supplier |
Suppliers, purchase orders with approval, receiving, landed costs and the reorder list are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.