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A purchase order is an indispensable part of business, no matter how big or small. When businesses need to make purchases, they have to follow the long route of the purchase order process.

The usual way of completing this process manually is plagued with bottlenecks like employees spending 50% of their time searching for documents, errors in manual data entries, or more. But, there is a better way to handle these purchase orders.

Shifting to digital purchase order systems allows organizations to eliminate manual bottlenecks while enjoying cost & time benefits. With electronic purchase orders, organizations can reap benefits like real-time spend analysis, improve visibility into financial data, and enhanced security of sensitive documents.

But is the shift from paper to digital difficult? No.

In this blog, we will discuss the basics of digital purchase orders and how you can digitize your purchase order processes in a jiffy! So let's get started.

What is a Digital Purchase Order?

We know what purchase orders are. The purchase order document outlines all the business requirements from the buyer to the seller. It contains details about the quality, time frame, agreed prices, and more.

DPO definition
DPO definition

Digital Purchase or Electronic purchase order is the electronic version of a purchase order listing all the terms & conditions of exchange of products and services between buyer and seller.

Electronic Purchase order streamlines the communication between the two parties and reduces any possibility of misunderstanding by laying all information out front.

Streamline your purchase orders with customizable, no-code automated workflows in 15 minutes with Nanonets.

Digital Purchase Order vs Paper Purchase Order

How Does a Digital Purchase Order Differ from a Paper Purchase Order? Let's take a look.

How Does a Digital Purchase Order Differ from a Paper Purchase Order?
How Does a Digital Purchase Order Differ from a Paper Purchase Order?


Manual purchase order processing takes up a lot of time as manual data entry is involved.

In the case of digital purchase orders, everything is done using automated workflows and rule-based checks. This saves a lot of time compared to the manual purchase order.


Manual purchase order processing is costlier than electronic purchase orders due to additional storage costs, more effort required from employees, and a higher error rate.


Manual PO processing is an error-prone process due to manual data entry. In the case of an electronic purchase order, it is done automatically using OCR APIs and Intelligent document processing software, like Nanonets, which are sometimes >95% accurate in extracting data from documents.

Follow up

Manual Purchase order requires consistent follow-ups from stakeholders whereas, in the case of digital process order, you can automate follow-up processes with workflow automation.

Supplier Relationships

With digital purchase orders (DPO), you can strengthen supplier relationships with on-time payments, real-time notifications, less turnover time and on-time approvals. In the case of manual PO processes, due to manual intervention, the supplier approvals and payments take time.


With DPO, you get real-time visibility into the payment status. There is less communication and less transparency when you use manual payment processes.


A digital purchase order is an electronic document used to request goods or services from a supplier. While a paper purchase order is a physical document used to request goods or services from a supplier.


The Manual PO are stored in cabinets out of reach and not every employee can access them. With the digital PO process, every document and information is stored in the cloud which is accessible to employees remotely.


Compliance in a manual setting is daunting. Keeping a paper log of every change is difficult which leads to high error incidents & frauds. In the case of DPO, the software maintains the log automatically.

Ready to digitize your purchase order processes? Try Nanonets for free.

Issues with the Manual Purchase Order Process

The comparison table above points out the differences but let's take a look at the issues with the manual purchase order process.

The biggest criticism of the manual purchase order process is that it is time-consuming and prone to errors.

During the process, someone has to manually fill out the paper order form for every item and follow up with relevant stakeholders for approval. It can also be easy to make mistakes when filling out the forms, which can lead to delays in getting the items that were ordered. This approval process can take days or maybe weeks!

After the order is completed, an employee needs to manually check the documents to ensure the details of the documents are correct. Any mistake here means irreversible payment which is a direct loss!

And after the process, you need to store the record for future reference. How exciting would it be to comb through a room full of papers to find one document after a year? That's exactly why we need electronic purchase order.

Switch to the Electronic purchase order process and gain visibility into financial processes & data in real-time! Make the switch with Nanonets.  

5 Steps in Digital Purchase Order Process

  • Create your purchase order forms
  • Design your PO workflow
  • Add stakeholders to the approval workflow
  • Test it out & Implement the DPO process
  • Optimize process regularly

Create your purchase order forms

Once you have mapped your requirements, create a purchase order form for all the other team members to fill so all your PO forms have the same format. You can create it using Word or any other form creator.

Design your PO workflow

Now that the PO form is finalized. Head over to PO automation software like Nanonets to create a workflow that will trigger after you receive a PO on your email.

Add proper rule-based checking points to improve data quality. Like checking the date format, currency, removing duplicates, or more.

Add proper rule-based checking points to improve data quality
Add proper rule-based checking points to improve data quality

Set up actions on data export and document storage so all your PO documents are archived properly. DPO software like Nanonets has powerful integrations to export data seamlessly.

Set up actions on data export and document storage
Set up actions on data export and document storage

Set up an approval workflow

Probably one of the important parts of the process is setting up the approval workflow. Add approval stakeholders, add rules to flag documents and ensure multiple checking points to ensure a fraud-proof process.

Set up an approval workflow
Set up an approval workflow

Test it out before implementing

Just before you set it live, test it out! Share the workflow with everyone in the purchasing team to ensure there are no mistakes. Check if everyone gets notifications in real-time.

Optimize the process regularly

Collect feedback from suppliers and stakeholders to improve the DPO process regularly. Keep adding functionalities, reduce the process gaps and enhance user experience on the way.

Set up automated DPO processes with workflow automation in 15 minutes. Trusted by 30,000+ users to automate manual processes. Give it a try.

7 Benefits of using Digital Purchase Order

I think we've sold digital purchase orders over paper-based orders until now. In case you're not sold yet, here are 7 reasons why you should adopt electronic purchase orders now.

Reduce Late Payments

Reduce your payment turnaround time with instant notifications to stakeholders and automated approval processes. Reduce late payments and unlock early payment discounts.

Improve supplier relations by keeping them in the loop with a PO process that is error-free, quick, and reliable.

Reduce Error Rates

DPOs also tend to be more accurate than paper DPOs, since there's less room for human error when inputting data into an electronic system.

Save time

Another advantage of DPOs is that they can be created and sent electronically, saving a lot of time compared to the traditional paper purchase order process.

Buyers can simply fill out an online form or use accounting automation software to generate a DPO, which can then be emailed or transmitted electronically to the seller.

Enhanced Accountability

Digital Purchase orders are tracked digitally. The software collects the login information of the person who makes all the changes. And therefore, as a company, you will always know who made the last changes or who is responsible for the spending.

Improved Spend Visibility

Mapping a company’s spend is essential as it provides an overview of the areas where the spending is happening. With an online digital purchase order system, you can keep a track of where your money is going, identify the hot spots of spending, look at the expense trends and strategize to optimize them in real-time.

Remotely Accessible

If you have an online purchase order system, everything is stored in the cloud. You can access it from anywhere and at all times. This provides a great deal of freedom to access and flexibility. You and your team can access reports and analytics from any location with just a browser and working internet!

Error Free Processes

Compared to a paper-based purchase order process, the digital purchase order system is error-free. With workflows and automated rule-based checks, the documents can be processed, edited and analyzed with the highest accuracy. With the reduction in manual data entry, you can reduce errors in purchase orders by more than 95%! Learn more

Looking to automate manual purchase order processes? Switch to Nanonets & automate your PO processes with workflows, in-built OCR & 5000+ integrations.

Nanonets for Electronic Purchase Order

Nanonets is an AI-based intelligent automation platform that can automate every aspect of the purchase order process. Nanonets is perfect for end-to-end purchase order automation as it has in-built OCR software, automated workflows, and integrated payments gateways.

Capterra Rating: 4.9

G2 rating: 4.9


  • Easy to use
  • Free plans
  • Modern User Interface - Intuitive interface
  • No code platform
  • 5000+ integrations
  • 24x7 support for everyone
  • Exhaustive training material
  • Professional purchase order OCR services
  • Cloud and On-premise hosting

Get started with Nanonets' pre-trained purchase order models. You can also schedule a demo to get a free product tour!

Top Features to look for in Digital Purchase Order System

Let's take a look at some features you might want to look for in a digital purchase order system.

Easy-to-use interface

First and foremost, you'll want an easy-to-use interface.

After all, there's no point in paying for a system that's so complicated that you can't even figure out how to use it. In order to improve the adoption of the platform, you need to ensure that the user interface is user-friendly and intuitive.


Next, make sure that the system is customizable to fit your specific needs.

Not every pre-made template fits your use case perfectly. And therefore, the DPO software you choose should be customizable. Watch out for features like custom OCR models, custom workflows, role-based access, and more.

Robust Tracking & Reporting

With an efficient digital purchase order process, you can collect all your purchase order data in one single database. Armed with this data, you can track company expenses, track vendor details & payments, monitor vendor costs, enhance inventory management & more.

Look for information extraction capabilities and dashboarding capabilities in detail.


If you're running a business, chances are you're using a variety of different software applications to manage different aspects of your operations.

A digital purchase order system should integrate with all your applications for smooth data exchange. This will save you time and effort, and make it much easier to keep track of your purchases.

Smooth integrations will ensure that your purchase orders are automatically updated in your other systems and that you can track your purchases from start to finish.

Secure and reliable data storage

In any business, it's important to keep track of your inventory, and a digital purchase order system can help you do just that.

When looking for a system, be sure to find one that offers secure and reliable data storage. This way, you can be sure that your information is safe and sound, and you won't have to worry about losing any important data.

Workflow Automation

In order to truly automate all your tasks, you need workflows. Not just templated workflows, but customizable workflows.

Workflows will help you truly automate manual processes like collection, validation, approvals, matching, and more. With workflow automation, you can have a lot of time on your hands which can be used for other meaningful tasks.

Want to automate repetitive manual tasks? Save Time, Effort & Money while enhancing efficiency!

Common mistakes that businesses with Electronic Purchase Order Systems

A lot of things can go wrong while implementing electronic purchase order software. Here are some ways to avoid costly mistakes.

Mistake 1: Not having a purchase order process in place

One of the most common mistakes that businesses make when using an electronic purchase order system is not having a purchase order process in place.

Many businesses assume that they can simply start using the system and that everything will fall into place.

However, this is not the case. Without a well-defined purchase order process, businesses will likely find themselves with inaccurate or incomplete orders, which can lead to delays and other problems.

Mistake 2: Not training employees

You must ensure that their employees are properly trained on how to use the system. Otherwise, they will likely encounter errors and difficulties when trying to place orders.

By taking the time to develop a purchase order process and training employees on how to use the system, businesses can realize the true potential of the DPO system.

Mistake 3: Failing to get proper approvals

It is very common for businesses to fail to get the proper approvals for orders when using an electronic purchase order system. This can lead to situations where goods are ordered but never received, or where invoices are paid but the goods are never delivered.

To avoid this, it is important to set up a system whereby all orders must be approved by a designated manager before they are processed. This will ensure that only authorized orders are placed and that all orders are properly tracked and accounted for.

Mistake 4: Failing to track order numbers

Another common mistake is failing to track purchase order numbers. This can result in duplicate orders being placed, or in missing orders when goods are delivered.

To avoid this, it is important to assign each purchase order a unique number and to track all purchase orders carefully.

Mistake 5: Not verifying supplier communication

Without a proper supplier verification process in place, you can face issues like as incorrect product descriptions, delivery dates, or prices.

You should always verify supplier information, double check the details and avoid misunderstandings at the end.

Mistake 6: Not checking for duplicate orders

Duplicate orders are one of the most common mistakes businesses make when using an electronic purchase order system. When an order is placed, the system automatically generates a purchase order number.

However, if the order is placed again, a new purchase order number is generated. This can lead to confusion and wasted time as businesses try to track down duplicate orders. To avoid this problem, businesses should always check the purchase order number before placing an order.

If the number is already in use, the business should either cancel the order or choose a different supplier. By taking this simple step, businesses can save themselves a lot of headaches down the road.

Mistake 7: Not reviewing invoices for accuracy

Not reviewing invoices for accuracy can lead to businesses overpaying for goods or services, which can add up over time and put a strain on the company's finances.

Without this, it can be easy for unauthorized purchases to be made, which can again lead to wasted money and resources. By being aware of these common mistakes, businesses can help ensure that their use of electronic purchase orders is efficient and effective.


We saw how digital purchase orders can save your business time and money. It is an efficient way to track and manage your purchases, and it makes ordering easier for both buyers and suppliers.

If you are not currently using a digital purchase order system, we suggest that you consider implementing one. It could be the solution your business needs to streamline its operations and improve efficiency.

You can check out Nanonets for digitizing your purchase approval process. Our team can ease the trasition by providing assistance at every step of your transformation journey. Get started with free trail or set up a free product tour with our automatione experts.

Related Reading:

Update 9th September 2022: The article originally published on 27th August 2022 was updated on 9th September 2022 with recent findings.

Frequently Asked Questions

What is an Electronic Purchase Order Process Used For?

An electronic purchase order process is used by businesses to streamline the process of ordering goods and services.

By using an electronic purchase order system, businesses can automate the ordering process and reduce the amount of time and paperwork involved.

In addition, electronic purchase orders can help to improve communication between buyers and sellers and can make it easier to track order history and progress.

As a result, electronic purchase orders can save businesses time and money and can help to improve their overall efficiency.

Why should you use the Electronic purchase order process?

The electronic purchase order process is more efficient than the traditional paper-based system

In the past, businesses relied on paper-based purchase orders to keep track of inventory and manage to buy requests.

However, this system was often inefficient, as it was difficult to track purchase orders and ensure that they were accurate. In addition, paper-based purchase orders could be easily lost or misplaced.

As a result, businesses often had to spend a lot of time and resources managing their purchase orders. The electronic purchase order process is more efficient than the traditional paper-based system.

With an electronic system, businesses can track purchase orders, monitor inventory levels, and send buying requests electronically. This helps to improve accuracy and efficiency while reducing costs.

Therefore, the electronic purchase order process is a more efficient way to manage to buy requests.

It eliminates the need for manual data entry, which can lead to errors

When it comes to making purchase orders, most businesses still rely on manual data entry. This can lead to errors, as well as a lot of wasted time and effort.

An electronic purchase order (EPO) system can eliminate the need for manual data entry, providing a more efficient and accurate way to manage purchase orders. With an EPO system, all of your purchase order information can be stored electronically, making it easy to access and update as needed.

This can save you a significant amount of time and money, as well as help to reduce mistakes. In addition, an EPO system can provide you with added flexibility and control over your purchase orders.

You can set up alerts to remind you when an order needs to be placed, track your spending, and even automate the ordering process. If you're looking for a better way to manage your purchase orders, an EPO system is definitely worth considering.

You can track the progress of your orders online, and receive automated notifications when they're processed

Making an electronic purchase order is a great way to streamline your shopping process. You can track the progress of your orders online, and receive automated notifications when they're processed.

This means that you can keep tabs on your shipments without having to constantly check in with the store or company. Plus, electronic purchase orders can often be processed faster than traditional orders, so you can get your items sooner.

Whether you're ordering office supplies or groceries, an electronic purchase order can save you time and hassle.

It's easier to manage your supplier relationships and find new suppliers online

If you're looking to streamline your supplier relationships, an electronic purchase order system is the way to go. With an electronic purchase order system, you can manage all of your supplier relationships in one place.

This makes it easy to find new suppliers and get the best prices on the products and services you need. And because everything is done online, you can track your orders and payments easily.

So if you're ready to make your life simpler, an electronic purchase order system is the way to go.

You can save time and money by using automated purchasing tools

Anyone who has ever gone grocery shopping knows that it can be a time-consuming and expensive endeavor. But what if there was a way to automate the process and save both time and money?

Well, fortunately, there are a number of online tools that can do just that. By linking your credit card to an online account, you can set up recurring orders for the items you need on a regular basis.

That way, you'll never have to worry about running out of coffee or toilet paper again. And because you're not making impulse purchases, you're likely to save money as well. So if you're looking for a way to streamline your life, give automated purchasing a try.

How to select the best Electronic Purchase Order System?

Following are the major steps used in setting up an electronic purchase order system:

What is an electronic purchase order (EPO) system? How it can benefit your business?

The first step is to define the EPO deeply and understand all the aspects related to it, you must have to know the benefits and the demerits of EPO,

An electronic purchase order, or EPO, the system is a web-based platform that enables businesses to streamline their purchasing process.

By integrating with suppliers' websites, electronic purchase order systems allow businesses to create and send purchase orders electronically. This can save significant time and paper resources.

In addition, EPO systems can provide valuable insights into spending patterns and help businesses negotiate better terms with suppliers. While there is a cost associated with setting up an electronic purchase order system, the benefits can be significant for businesses of all sizes.

Research different EPO systems to find the best one for your needs

If you're in the market for an EPO system, you've got a lot of options to choose from. And with so many different features and capabilities on the market, it can be tough to know where to start.

Do you need something simple and straightforward, or are you looking for a system with all the bells and whistles? To help you make the best decision for your needs, it's important to do your research and compare different EPO systems.

Here are a few things to keep in mind as you're shopping around.

  • Think about what features are most important to you. Are you looking for an all-in-one solution that includes an electronic purchase order server and client software? Or would you prefer a more customizable system that allows you to add on only the features you need? There's no right or wrong answer here - it all comes down to what will work best for your organization.
  • Take a look at the different pricing models available. Some electronic digital purchase order systems are offered as a subscription service, while others require a one-time purchase. Again, there's no wrong answer here - it all depends on your budget and preferences.
  • Consider the support options offered by each provider.

Set up the EPO system in your business, following the manufacturer's instructions

Setting up the EPO system in your business is a pretty straightforward process, especially if you follow the manufacturer's instructions to the letter.

First, you'll need to position the electronic/ digital purchase order console in a central location within your business premises - somewhere that's easily accessible for all employees.

Once the console is in place, you'll need to connect it to your business's main power supply and then activate it using the included key fob.

After that, you'll need to set up the electronic purchase order sensors around your business premises, making sure to place them in areas where they can pick up any potential intruders.

Finally, it's a good idea to test the system regularly to ensure that it's working properly and that your employees know how to use it effectively.

Train employees on how to use the electronic purchase order system

The EPO system can be a powerful tool for managing projects and tasks, but it can also be daunting for employees who are not familiar with its many features.

To ensure that employees are able to make the most of the system, it is important to provide training on how to use its various features.

In addition to showing employees how to create and manage projects, training should also cover how to use the system's collaboration features, such as task assignment and messaging.

By providing comprehensive training on the EPO system, employers can help employees work more efficiently and improve project management across the organization.

Use the electronic purchase order system to streamline your purchasing process

The EPO system can be a fantastic tool if you're looking for a way to streamline your purchasing process.

With the EPO system, you can manage your inventory, track your orders, and create purchase orders all in one place.

Plus, the EPO system is easy to use and gives you the flexibility to customize your purchasing process to meet your specific needs. Best of all, the EPO system is affordable and can save you time and money in the long run.

So if you're looking for a way to simplify your purchasing process, the EPO system is a great choice.