What was once a mild irritation has now caused the death of yet another stress ball. You’ve spotted one of those common mistakes that employees make when submitting a purchase request. You march down the corridor with illegible, incorrect, incomplete purchase order in hand.
‘If you could please just fill in the VAT correctly… please,’ you beg the hapless employee responsible for purchase order faux pas #2067.
But, of course, another week, another error. So it goes. Here’s some catharsis for managers, and a warning to anyone who spends a lot of time filling in purchase orders – don’t repeat what you see here.
1. VAT does not stand for Variable Approximate Technicality
There are loads of sources for calculating VAT, like:
- This contractor calculator;
- Or this markdown VAT calculator;
- Or this free VAT calculator;
- Or this more interactive calculator.
Value added tax is a consumption tax that is added to reflect the value added at each stage of the supply chain. The default rate in the UK from 2011 is 20 percent. Some items are exempt, such as postage stamps, or subject to a reduced rate of five percent, such as energy saving materials.
It needs to be calculated accurately, and it will save a manager or bookkeeper a headache if you use one of the many VAT calculators available.
2. Giving a political answer
Brevity is brilliant in some cases. But, for a purchase request, vagueness isn’t helpful. You need a little more detail. Otherwise, the person approving it will have no idea whether it’s a good price, or what the purchase is for. Instead of ‘bought envelopes’, try:
‘Bought 500 padded envelopes for posting ceramic samples to customers.’
3. A mismatched invoice
Disaster. The invoice does not match the purchase order. Neither document matches any of the receipts. Who’s to blame?
Well, it’s everyone’s responsibility to ensure each step of the purchase is correct. Take the time to make sure all the information lines up and avoid a tiresome ‘whodunnit’.
4. Failing to communicate
Communication is key. Don’t just submit a purchase order without ensuring you have communicated with the people who need to know, first. Be certain you have all the information you need, as well.
5. Going over your budget
A budget is there for a reason. Whether it’s because of bad maths or lack of forethought, there’s nothing that will get you in hot water faster than a purchase order that’s over-budget. Check your resources, and also be careful when inputting numbers, especially if you’re handwriting the PO. Is it a 7 or a 1?
6. Failing to negotiate with suppliers
Some people relish a negotiation and some people hate it. However, if you’re making repeat, bulk purchases from a supplier, don’t be afraid to revisit the terms. If the supplier feels like you’re going to keep bringing steady business, then they’ll likely be more than happy to knock off a few quid.
And, don’t just stick with one supplier if you feel they are overcharging. It is totally fine to shop around for some quotes. In fact, most businesses would expect you to do this.
7. Using paper
Is this scenario familiar? Employee fills in request. Request goes to in-tray on manager’s desk for a week. Request gets skimmed and sent to head office. It sits in another in-tray for two weeks. Someone notices an error. Sends it back. Error corrected. It then goes through the same process before finally getting approved.
Paper is SLOW.
Here are some other reasons why using paper for purchase requests is a mistake:
- It’s not environmentally friendly.
- It’s expensive to manage paperwork.
- It requires too much of your employees’ time.
- Organising and storing files can be disastrous.
- Paper causes desk clutter.
- Paper gives you papercuts.
Instead, try an app for digital purchase orders – Turbine. It also does time-off and expenses, as if that wasn’t enough. Automate those repetitive HR requests and regain your time and brainpower for more useful work, like that report you’ve been putting off that David needs for his meeting on Tuesday. You remember what happened the last time someone disappointed David.
We’ll leave you with this. There’s a lot of washy quotes about making mistakes, but in a fit of delicious mean-spiritedness, we like this one’s dual meaning:
‘Mistakes are proof that you are trying.’