Why SMEs need a dedicated purchase order function

Norman Rohr
23.04.26
5 min read

Accurate financial planning forms the backbone of any successful business. Yet, many mid-sized companies still battle with confusing spreadsheets and manual reconciliations at the end of every month. If you operate as a Managing Director or Head of Finance in a small to medium-sized enterprise (SME), you likely know this challenge well. Predicting future costs often feels more like a guessing game than reliable data analysis.

We understand the pressure finance teams face when trying to maintain visibility over company spending. Without the right tools, controlling budgets and forecasting cash flow becomes incredibly difficult.

This article explores why an integrated purchase order (PO) function is the decisive lever for effective spend management. You will learn how manual processes threaten your planning reliability, how smart workflows provide immediate relief, and the measurable success your team can achieve through a digital system like finway.

The Problem: Manual processes hinder financial planning

Picture a highly relatable scenario. A growing software company in Southern Germany handles all its purchase requests without a dedicated PO system. When individual contributors need new software licenses, hardware, or external services, they simply send a quick message via Microsoft Teams or write an email to their supervisor.

For the finance department, this approach creates an enormous administrative burden. The Head of Finance must manually track every single purchase request. Based on fragmented email threads and chat messages, she tries to enter the expected spend into the respective future months. Because of the sheer volume of data and unstructured communication, she often allocates expenses to a single month rather than distributing them correctly over the entire service period.

To maintain some level of control, she holds time-consuming biweekly meetings with department leads. They review this makeshift spend plan together before she finally discusses it with the Managing Director.

This manual method is not just extremely time-consuming; it is inherently prone to errors. Manual data entry leads to inaccurate forecasts, as crucial details like exact delivery dates or varying service periods frequently slip through the cracks. Strategic spend management becomes nearly impossible under these conditions.

The Solution: Automated workflows with finway

To overcome these steep challenges, SMEs need a centralized and structured solution. This is exactly where finway steps in. Instead of scattering purchase orders across countless emails and chat messages, finway offers an integrated PO function that completely digitizes the entire procurement process.

Individual contributors can submit their purchase requests directly within the finway platform. The system automatically routes the request to the responsible manager or cost center owner. They review the planned costs and sign off on the expense. For larger amounts, the workflow seamlessly forwards the request to the Managing Director for approval, and finally to the Head of Finance.

Beyond approvals, finway automatically captures all relevant delivery dates and service periods. When merchandise arrives or invoices enter the system, finway links this information directly to the original purchase order. Employees and managers can even submit necessary changes to their POs directly within the system. Everything is then displayed clearly on an intuitive dashboard.

Clear Visibility Over Every Transaction

The dashboard transforms how finance teams operate. It consolidates every piece of purchasing data into one accessible location. This means you never have to hunt down a missing invoice approval or guess when a software subscription renews.

The benefit: Real-time overview for accruals and P&L

For finance leaders, this level of automation represents a true paradigm shift. The days of painstakingly gathering expense data from various communication channels are officially over.

By capturing all purchase data centrally in finway, you gain a complete, real-time overview of all open and approved purchase orders. You know exactly when specific costs will hit your Profit and Loss (P&L) statement. Because the system meticulously documents delivery dates and service periods, calculating the necessary accruals for your monthly and annual close becomes a simple, straightforward task.

You can see at a glance which services have already been rendered but not yet invoiced. This allows you to adjust your financial planning accordingly, ensuring your financial statements accurately reflect your company’s true financial position.

Empowering the Month-End Close

Month-end close is typically a stressful period for accountants and controllers. With finway’s PO function, the groundwork is already laid out. The data matches, the approvals are logged, and the accruals are calculated based on accurate service delivery dates. This empowers your accounting team to close the books faster and with absolute confidence.

The Impact: More time, fewer planning errors

Implementing a structured purchase order function fundamentally changes the way a finance department works. More importantly, it delivers rapid, measurable results that impact the bottom line.

Taking the Southern German software company as an example, the added value becomes immediately apparent. By implementing finway, the finance team reduced the time spent calculating accruals and creating the financial forecast by a staggering 80 percent. The finance department reclaimed valuable hours previously lost to manual data entry. They now redirect this time toward strategic analysis and growth initiatives.

Even more impressive is the resulting improvement in data quality. The company eliminated planning errors by 95 percent. The Managing Director can now rely on robust, accurate figures and make strategic business decisions based on dependable real-time data.

Secure your spend management for the future

An integrated purchase order function is far more than just an administrative tool for approving purchases. It serves as the foundation for flawless financial planning and transparent spend management in any modern SME.

When you replace manual processes with intelligent workflows, you drastically reduce your administrative workload. You also regain complete control over your corporate finances. You position your company to scale efficiently without drowning in operational bottlenecks.

Take a moment to analyze your internal purchasing processes today. Identify the manual steps that consume your team’s time. See how a comprehensive solution like finway can elevate your financial planning, streamline your approvals, and bring clarity to your month-end close.

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Norman Rohr

Norman ist seit 2024 CEO von finway. Er verfügt über einen Master in International Business (ISM) und einen MBA in Finance & Strategy (Melbourne Business School). Mit über 20 Jahren Erfahrung in der Technologie- und Digitalmedienbranche auf vier Kontinenten ist er ein ausgewiesener Marketing- und Revenue-Experte. Bevor er zu finway kam, hatte er Führungspositionen bei Unternehmen wie Google, SVOX, Pixability, Uberall, Xentral ERP Software und Capmo inne und beriet zahlreiche weitere Firmen.