It does not matter whether you are doing small business or large. Make it a practice to assign a number for all the transactions done to monitor the dealings easily. Using a purchase order (PO) system is unique and advantageous to the purchaser and the vendor in many aspects.
The number and date of the document is vital in maintaining any record. You can easily trace out the PO form using the number. Similarly you can track all the transactions made with one particular vendor and find out what is the date of order and when it was delivered.
You should maintain a running PO number for all the dealings of the company. By quoting the number you can monitor the complete history of the transaction. What are the products you have ordered and with whom you have placed the order and what is the mode of payment made and much more. In case you have not received the materials you can always quote the purchase order number to the vendor and the date of order for reference. For shipping the products you are often requested to quote the number of PO for tracking the deliverables.
You can maintain a spreadsheet and enter all the details of the PO system to avoid unnecessary confusion. Type the PO number along with the name of the vendor in the title for easy tracking. In addition to this, you can also have the benefit of easy accountability by giving a valid number to all the orders you make from the company.
The purchase order can be used to track the inventory. For instance using the PO number you can see what particular item is being used largely in your business and who places the request. You can also PO number to refer the particular product or for placing fresh order with the vendor.