The Evolution of Purchase Order Tracking

Imagine going back roughly a century, before digital technologies became widespread — how hard it was for companies to keep track of business processes like purchase order tracking. This tedious process used to be paper-based and full of mistakes caused by human error. That long, manual process is now behind us: computer technology has brought companies significant ease across every aspect of the supply chain.

Purchase Order Tracking Process

First, let's define what a purchase order (PO) is and why it matters for business. A purchase order is a document with a request for an order that a buyer sends to a vendor. Typically, it includes information such as the type of item, the price, and the quantity of the product. Moreover, if the customer doesn't complete the payment, the supplier is protected, since the PO functions as a kind of contract between both sides.

Now let's trace how the process of purchase order tracking has improved over time. In the past, if a merchant ran out of stock, they would fill out a paper order form or call the purchasing department. The purchasing department would then fill out another paper purchase order form for their vendor — usually by typewriter or by hand. What's more, three copies of the order form were needed. If a typewriter was available, that was fortunate; otherwise, staff had to make three carbon copies by hand. Two copies went to the vendor — one to accompany the payment and one to accompany the sales order and invoice — and the third was kept for the customer.

Once the purchase order was completed, the purchasing agent would send it to the supplier. Each PO included a tracking number, or PO number, which appeared on all order-related documents: sales orders, invoices, receipts, and so on.

Today, the PO number is still referenced across all related documentation. To check a purchase order, you can look it up in the purchasing, inventory, or order management system using the PO number. Now that inventory management is computerized, purchase order tracking has become a far more accurate process, reducing the likelihood of mistakes with payments and order fulfillment.

Here is how the purchase order tracking procedure typically looks now:

1. The company runs out of a product. A staff member notifies the purchasing department using an online order form, phone, or email.
2. The purchasing department creates a purchase order and assigns it a PO number. With an online order form, the PO can be generated automatically.
3. The purchasing agent submits the order to the vendor electronically using EDI, an API, or web services.
4. The vendor receives the purchase order and creates a sales order with the PO number in their sales order management system. If the vendor's sales system is integrated with the customer's, the PO number is generated automatically.
5. The vendor processes the order. Once the order is completed, the sales order is automatically converted into an invoice, which includes the PO number as a payment reference.
6. The order is shipped, and the supplier sends the invoice electronically or includes a copy of it with the order.
7. The customer receives the order and uses the PO number to process payment.

Importance of Order Management Software

As shown above, purchase order tracking is a complex, multi-step process.

So why go through this complicated process at all? The main reason is to give both the customer and the seller a contract that protects both sides, using credit arrangements like Net 7 or Net 30. It assures the vendor that the customer will complete the payment and clarifies when that payment should be expected. In addition, the purchase order helps a supplier verify what was ordered against what was shipped, plan future orders, and be confident about receiving payment on time. For the buyer, it allows for better planning of business activities and assurance that the needed items will be supplied on time and at the agreed price.

To make order tracking less tedious and more organized, merchants and manufacturers use order management systems (OMS). An order management system is software that automates a set of functions related to order fulfillment, from order creation to invoicing and shipment tracking. To do this effectively, order management systems need to be integrated with the shopping carts that merchants use to build their online stores. This integration makes it possible to extract the necessary data directly from online stores, and supporting the most popular shopping carts and eCommerce marketplace services ultimately means access to a much larger pool of potential clients.

The main thing that stops many OMS providers from supporting more shopping platforms is the complexity of development. There is, however, a way to make this much easier: integrating via a unified shopping cart API, such as the one provided by API2Cart.

Shopping Platform Connection for Order Management Systems

API2Cart makes it possible for order management providers to do the following:

• sync orders placed on e-stores and various marketplaces;
• get and update order statuses;
• retrieve customer details to send notifications about their orders;
• track product counts and notify customers about inventory updates, and more.

As automation and eCommerce AI tools continue to reshape how order and inventory management systems operate, connecting to multiple shopping platforms through a single integration remains essential for scaling an OMS efficiently.

If you are interested in integrating your order or inventory management system with multiple shopping carts, schedule a consultation with our representative, or try how API2Cart would work for your business right away.