How to Automate Purchase Orders
The Problem
Manual procurement is a bottleneck that causes production delays and stockouts. Purchasing teams spend hours comparing supplier prices, creating POs in spreadsheets, getting manager approvals via email chains, and following up on delivery dates by phone. Without automated reorder triggers, stock runs out before anyone notices, leading to rush orders at premium prices. Tracking which POs have been approved, sent, or received requires constant manual status updates.
The Solution
Odoo purchase automation triggers purchase orders automatically when stock hits reorder points or when sales orders create demand. The system selects the best supplier based on price, lead time, and minimum order quantities from your vendor pricelists. Approval workflows route POs through the right managers based on value thresholds, and suppliers receive POs electronically with online confirmation portals. Receipt matching and three-way verification happen automatically.
Step-by-Step Setup
Set Up Vendor Pricelists
Configure supplier information including lead times, minimum order quantities, pricing tiers, and payment terms for each product. Odoo uses this data to select the optimal supplier when generating automatic purchase orders.
Configure Reorder Rules
Define minimum stock levels, maximum stock levels, and preferred suppliers for each product and warehouse combination. When available stock drops below the minimum, Odoo creates a draft PO to replenish to the maximum.
Define Approval Workflows
Set up multi-level approval chains based on PO value. Orders under a threshold auto-approve, mid-range orders need manager sign-off, and high-value orders require director approval. All approvals happen within Odoo with email notifications.
Automate Supplier Communication
Configure automatic PO sending via email upon approval. Enable the vendor portal so suppliers can confirm orders, update delivery dates, and submit invoices directly in Odoo without back-and-forth emails.
Enable Three-Way Matching
Activate automatic matching of purchase orders, goods receipts, and vendor invoices. Odoo flags discrepancies in quantities or prices for review and auto-approves invoices that match within tolerance.
Build Procurement Analytics
Set up dashboards tracking supplier performance, lead time accuracy, price trends, and spend by category. Use this data to negotiate better terms and identify underperforming suppliers.
Before vs After
| Aspect | Before | After |
|---|---|---|
| PO Creation | Manually checking stock, comparing suppliers, and typing purchase orders in spreadsheets | Auto-generated POs with optimal supplier selected based on price, lead time, and MOQ rules |
| Approval Process | Email chains with PDF attachments that get buried in inboxes for days | In-app approval with mobile notifications, completed in minutes instead of days |
| Supplier Communication | Phone calls and emails to place orders and track delivery status | Electronic PO delivery with vendor portal for confirmation and delivery updates |
| Invoice Verification | Manually comparing vendor invoices against POs and delivery receipts | Automated three-way matching with exception handling for discrepancies only |
Frequently Asked Questions
Can Odoo handle blanket purchase agreements?
Yes. Odoo supports blanket orders where you negotiate terms and pricing for a period, then create call-off orders against the agreement. The system tracks consumed quantities and remaining commitment automatically.
How does the system choose between multiple suppliers for the same product?
Odoo evaluates configured vendor pricelists based on unit price at the order quantity, lead time, and minimum order requirements. You can also factor in supplier ratings based on historical delivery performance and quality scores.
Can purchase approvals be done from a mobile phone?
Yes. Managers receive push notifications for pending approvals and can review PO details and approve or reject directly from the Odoo mobile app or email action buttons without logging into the desktop interface.
What happens when a supplier cannot fulfill the full order quantity?
Odoo supports partial receipts. When a supplier delivers less than ordered, the system creates a backorder for the remaining quantity and can automatically source the shortfall from an alternative supplier based on your fallback rules.
Ready to Automate?
ECOSIRE designs and implements custom automation workflows. Start saving time and reducing errors today.