PO systems for small business: Why your business needs one

If you are like most small businesses and startups, you work as a small team and collaborate with a few trusted suppliers. Even though you may know your suppliers well, you should still establish a system of using purchase orders (PO) for purchasing items. A PO is a formal document that can be referred to in cases of payment disputes or quality problems.

Once you are using POs regularly, the next step is to invest in an order management software that allows you to manage POs and other aspects of fulfillment such as tracking orders and expenses, resupplying stock and updating inventory. Read on to learn more about POs and Cin7’s automated order management system.


What is a purchase order (PO)?

A purchase order (PO) is a formal document issued by the buyer and sent to the seller listing all the required goods/services in desired quantities. The seller verifies the PO, delivers the goods to the buyer, and sends an invoice for the completed order. Thus, a PO acts as a legally binding document for buyers and sellers, as both parties can track the ordered items.

Ideally, a PO lists all the required items, their types, quantity, and prices in detail. This is important in case there are problems with the order. For example, if you order 15 printers and the vendor has only sent 14, you will have the PO for validating your order. On the flip side, POs are quite essential for sellers too, as POs will act as proof for the order placed by the buyer. For instance, if a buyer argues about the order quantity, the seller can always hand over the PO to the buyer. It’s a win-win for both parties.


What is a PO number?

A PO number is a unique number assigned to every PO. A PO number can help both buyers and sellers track the goods or transactions. In fact, it acts as a quick reference code for businesses to verify orders.

For instance, if a customer has a query and contacts your office, anyone from your accounts department can check their order just by entering the PO number. Businesses often use the PO number to validate the invoice against the purchase order for any mismatch.


What is a PO system & how does it work?

A PO system helps businesses create POs effortlessly and digitally.. All you need is to fill up your goods requirements in the desired amount and enter the supplier details. The system generates the PO with a unique PO number and sends it to the supplier instantly.

The PO system streamlines the entire order management process, including purchase requisition, supplier approval, receiving goods, getting invoices, and closing the payment. In short, a PO system is not only about purchase orders but also simplifies all the processes associated with order fulfillment. Furthermore, the PO system maintains the entire business transaction record that both parties can quickly refer to. Thus, businesses can track their orders, view order histories, keep their budget in control, and buy the right amount of stock.

A PO system is essential for any product-based business, regardless of size, as it manages inventory, purchases, orders, and invoices daily. Since the PO system aids transparency and accuracy in managing orders, you will have perfect inventory control, knowing what to stock and what to cut down on.


Why should small businesses invest in a PO system like Cin7?

Creating manual POs, maintaining spreadsheets, and following up with suppliers over the phone can be time-consuming and energy-draining. Cin7’s Order Management System offers significant benefits to your business.

1. Save time

Cin7’s OMS saves a lot of your time by simplifying purchasing processes and minimizing manual data entry. You can save the supplier details once and directly send your item list rather than manually entering the supplier details every time. You can readily refer to all the order details and transactions in the PO system. Plus, your employees need not spend time on calculations as the system does it accurately.

2. Gain better control over business processes

Cin7’s order management system is highly transparent, allowing you to view all the business activities in real-time. Hence, as a business owner, you can make data-driven business decisions. For instance, you can compare all the suppliers, their rates, quality, and sales movements. Thus, you can negotiate better deals with the suppliers while delighting your customers with beneficial products that add value to them.

3. Prevent overstocking and understocking of goods

Understocking goods can affect your reputation while overstocking items can dent your profits. With Cin7’s order management system, you can maintain optimal inventory levels at all times. You can automate the system to send POs to suppliers when inventory falls behind certain limits. Can replenishing goods get any easier? Thus, you can ensure you have the right amount of goods at the right places.


Summing up

Giving your employees a feature-packed tool like Cin7s order management system will allow them to work more efficiently as the software streamlines the entire backend process of managing orders. Additionally, Cin7 integrates with accounting software like Quickbooks and Xero, and you can import all your business data into it and keep track of your business’s finances. Thus, you can gain real-time insights into your business and intervene earlier to grow your business faster. Talk to Cin7 experts today to learn more about Cin7’s features and functionalities.

A complete guide to ecommerce fulfillment services and their processes

If you are thinking about putting some or all of your sales business online, you probably have many questions about order fulfillment. What’s the best method for your company? How do you make your warehouse or stocking facility perform at maximum efficiency? How do you ensure that orders go out on time? In this article, we will help you answer them.


What is ecommerce fulfillment?

Ecommerce fulfillment services cover the entire process of getting an item that’s been ordered online to the customer. Ecommerce fulfillment encompasses everything from receiving the online order to retrieving the goods from their place in the warehouse to boxing and labeling them to shipping and delivering them. Whether your company is business to business (B2B), business to customer (B2C), or direct to customer (D2C), if you’re selling your products online, ecommerce fulfillment is the name of the game.


Steps in the ecommerce fulfillment process:


The first step in fulfilling a customer’s order is to collect the items from their storage locations in the warehouse. This is called picking, and it is carried out by a warehouse operator, or picker. There are two basic ways picking can be done: single order and batch. With the first, orders are taken care of individually, with all items from a given order being picked at once; with the second, a number of one particular item is pulled from its storage location at the same time and then those items are divided into multiple orders. Batch order picking means having to sort items into their individual orders after the initial picking stage. While it requires this second step, if there are a lot of orders to fulfill and many of them have the same item, it’s a cost-saving method. The picking method you choose will depend on the size of your warehouse and the number or orders you have to fulfill.

If you have a large warehouse—and they can be gargantuan nowadays—you also have to make sure that your operators are taking the shortest route as they’re picking. This means listing the items in the right picking order. Thus, if item A is stored close to item B, but item C is way across the facility, it would be logical to list their picking order as A, B, C.

All these considerations are taken care of with a pick list. Created by warehouse managers, a pick list is laid out by item location, name, and quantity needed. Pick lists tell the operator, or picker, first where to go, then what to look for, then how many to pull from storage.

After this, the items are sent to packing.


Once the items for an order have been collected, they’re placed in a container. It’s important to make sure that the items aren’t damaged during delivery, so packing has to be done with care – and padding.

After the items have been boxed up, a shipping label is created. This label contains:

  • Name and address of the fulfillment company,
  • Name and address of the buyer – where the package is going to,
  • The weight of the package, the entire thing including goods and packing,
  • Unidirectional code, which is a machine-readable code that can be swiped from any direction,
  • A postal barcode,
  • Method of shipping – standard, express, or priority,
  • A routing number, and
  • A tracking number – this is the number customers use to track their package online.

This label is then attached to the package, and the whole thing is weatherproofed with plastic wrap.


The package is now ready for shipping. This involves collecting the box and getting it to the buyer’s address. A freight carrier like FedEx or UPS will usually be hired for this, but if the seller is small enough and only has local deliveries, they might take care of it themselves. On the other hand, if a company opts to sell their goods through a major online retailer like Amazon, shipping services are part of the deal: Amazon has its own shipping setup.


The final step is to deliver the package to the customer’s door. There, the delivery service may find specific instructions, like being asked to leave the package with a neighbor. Overall, the most important aspect of this last stage is to get the goods delivered on their promised delivery date. Doing this promotes good will – and repeat business.


Ecommerce fulfillment models

There are three models you can choose from:

Fulfillment by the seller

When a company is small or doesn’t have many online orders, it can take care of its own fulfillment. If that’s the case, it probably has its own dedicated shipping department, which, depending on the number of online sales it has to organize, might be a small area and not have a dedicated staff. This fulfillment model also works well if the company specializes in unique and valuable items that need extra care.

This system stops working, however, when:

  • The number of orders suddenly shoots up; if this happens, the self-fulfillment system won’t be able to cope and it will collapse.
  • The company doesn’t have a system in place to ensure that all stages of fulfillment run smoothly.
  • The cost of fulfillment is much higher than it would be if using a third-party shipping partner.

2. Fulfillment by a third party

Third-party logistics, or 3PL, stands for an outside company that’s hired to take over all or part of fulfillment.

If a company handles picking and packing in-house and has a large number of packages to deliver to different locations, it’s a good idea to have 3PL take care of those final stages.

Additionally, 3PL companies can provide facilities for warehousing, and they have staff to do the picking and packing tasks as well. The services you choose to use will, of course, determine the fee you pay.

3. Fulfillment by Amazon (FBA)

When it comes to 3PL, the biggest player is undoubtedly Amazon. A complete online marketplace, Amazon is the go-to site for looking to buy something with a click from the comfort of your home, and it is often the first destination for those searching for a particular product. With FBA, Amazon takes care of everything from warehousing to delivery, and it charges two fees: one for storage, and one for the actual fulfillment process.

There are pros and cons to FBA, and the company offers alternatives like Fulfilled by Merchant (FBM) and Seller-fulfilled Prime (SFP). With FBM, the seller lists their products on Amazon’s online marketplace, but takes care of fulfillment itself. SFP is the same, except that Amazon’s shipping policies are used and the Prime badge can be shown against the products on the website. Each of these Amazon services has its own fee structure.


How Cin7 can simplify your ecommerce fulfillment

It doesn’t matter which fulfillment model you use, Cin7 inventory management software can be your perfect partner. Its integrated order fulfillment module gives you a clear, overall picture of your entire fulfillment process, including getting goods from your supplier and racking, or warehousing, them. Plus, you can operate your account from a mobile device.

But what if you use a 3PL model for fulfillment services? Well, Cin7 has a solution for you too. The software has 3PL feature that allows you to get real-time information about your inventory anytime, from anywhere, no matter what stage of the operation it’s in. Because it’s cloud based, you can access the system from any device.


Wrapping up…

Ecommerce fulfillment service starts when an online order is received by a company, and ends when that ordered item is delivered to the customer. We’ve laid out the steps that are involved in detail and explained the three basic fulfillment methods. While each of these methods is a little different, they all have the same goal: getting your products to your customers in the quickest way possible.

If you’ve been hesitating to set up an ecommerce store because you have concerns about the fulfillment process. keep in mind that Cin7 can provide top-notch services to help oversee and manage your fulfillment, and that it can make the whole process stress-free. Talk to our experts today and book a demo. You’ll be glad you did.


Cath Kidston

Cath Kidston is known for an extensive product line of nostalgic, hand-painted floral print fashion, bags, kids wear, and home furnishings. Founded by fashion designer Cath Kidston and headquartered in the British Isles style capital of London, the company began by selling its unique and distinctive prints in their first retail store in 1993.

The company grew from success to success, and by 2011, there were 41 physical Cath Kidston shops and franchisees, selling vintage and British-influenced fashion apparel and accessories. On top of their own branded outlets, they also sold wholesale to high-end retailers like John Lewis. In 2010, a majority stake in the company was sold to private equity investors, and the company grew even further. In 2014, there were 136 Cath Kidston retail outlets all over the world.

But the last few years have been challenging for Cath Kidston, as they have for so many businesses. By early 2020, facing several commercial challenges including the onset of the Covid-19 pandemic, Cath Kidston closed 60 of their UK and Japanese retail locations. For most brick-and-mortar businesses, that would mean the end. But for Cath Kidston, it was a new beginning.

What made Cath Kidston’s story different? They credit their successful pivot to ecommerce – powered by Cin7 inventory management software.

Replacing an incumbent solution

Sébastien Poinçon is the Head of IT at Cath Kidston. His long list of responsibilities include evaluating third party software and maintaining the various app integrations that keep Cath Kidston’s retail business running. He oversees corporate and business systems, operations, support, network infrastructure, and store systems, and generously agreed to share with us the remarkable journey the company has been on.

After closing their physical locations, and letting the waters calm, Cath Kidston took stock, and made the decision to relaunch the brand – this time as a direct-to-consumer (D2C) ecommerce business whilst still maintaining its B2B franchise and wholesale operations.

“It was a massive shift for us, to operate on a smaller scale,” Sébastien says.

With this change in focus, Cath Kidston had to find an alternative to the complex and expensive enterprise resource planning software (ERP) they’d been using.

In addition to being costly and cumbersome, the ERP system lacked any technical documentation which made integration difficult. “It resulted in low user adoption across the organization,” Sébastien explains. “We needed a product that was more flexible and that was specifically built to support multichannel online sellers.”

He began searching for an inventory and order management solution that could help guarantee a successful transformation into a full-fledged ecommerce business – and they found it in Cin7.

Leveraging Cin7 to transform a business model

Cin7 was critical to Cath Kidston’s ability to rebound and transition into ecommerce, which today accounts for 85 percent of their sales.

After Sébastien and his team compared Cin7’s cloud-based feature set to competitor offerings, Cath Kidston implemented the software in April 2020. They chose Cin7’s powerful feature set to manage the company’s sales, inventory, and fulfillment, both for ecommerce, and in its remaining global brick-and-mortar locations. 

Cin7’s wide array of over 700 built-in integrations to other applications specific to retail and fulfillment were the secret ingredient in Cath Kidston’s remarkable transformation. “The ease with which Cin7 connects to the Salesforce Commerce Cloud platform is the most beneficial aspect of the software for us,” Sébastien says.

The move to Cin7 has also allowed the Cath Kidston team to do cross-channel stock reconciliations, making sure that the inventory count across retail, wholesale and online outlets stays consistent. Cin7 has also allowed them to connect to their main fulfillment warehouses in the UK and Hong Kong, for true end-to-end visibility.

What’s more, Cin7 has given the business something every product seller needs – a trustworthy source of inventory truth. With their previous ERP software, Cath Kidston could never be truly confident in the integrity of their inventory data.

“It was one of the major challenges we had with our previous vendor,” Sébastien explains. “But Cin7 has significantly improved our stock accuracy and has really helped us to consolidate our visibility into stock levels. Now that we have a handle on inventory management, we have seen improved process efficiencies.” 

The path to future growth

Cath Kidston’s future plans include expanding their online marketplace presence, and increasing their wholesale business to include a drop-ship model with UK retail powerhouse John Lewis. They plan to adopt additional Cin7 features such as built-in EDI connections to start selling to wholesale customers like Marks and Spencer.

Perhaps most exciting is Cath Kidston’s plans to begin opening new brick-and-mortar stores again, with Cin7’s proprietary point of sale (POS) module in use across all of their stores.

Cath Kidston’s smart approach has paid dividends. The market no longer sees them as a discount fashion retailer, and their mission to upgrade their products and offer more innovative selections has been well-received by customers. With increasing revenue, and Cin7 on their side, Cath Kidston’s future looks bright.

“Cin7 has really helped us,“ says Sébastien.

Don’t miss out on the extraordinary inventory visibility and increased efficiency that Cin7 brings — schedule a demo today with one of our experienced sales consultants.