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Cost per Purchase Order Calculator

A purchase order looks free until you count the people time behind it: the site manager working out what to order, the approval emails, the receiving check, invoice matching and payment. Map your process and see what each PO really costs and what automation would save.

  • Step-by-step costing
  • FTE equivalent
  • Automation scenario
  • No sign-up

True cost of one PO

$73.60

106 minutes of people time, from request to payment

A year

$883,200

12,000 POs

People time

21,200 h

≈ 12 full-time staff

With automation

$27.66

$551,220 a year saved

01Your purchasing process

$
StepWhoMinutes$/hour% of POsCost / POAutomation saves
$12.67
%
$13.00
%
$10.50
%
$5.25
%
$9.33
%
$6.80
%
$7.65
%
$3.40
%

Use loaded hourly rates (salary plus benefits and overhead). “% of POs” is how many POs need that step, e.g. only 30% hit a match exception.

02Cost per PO by step

  • Today
  • With automation
  • Chase and give approvalOps director
    $13.00
    $1.95
  • Work out what to order & raise requestSite manager
    $12.67
    $5.07
  • Create PO and send to vendorBuyer
    $10.50
    $1.05
  • Receive and check the deliveryReceiver
    $9.33
    $6.53
  • Resolve match exceptionsAP clerk
    $7.65
    $3.06
  • Match invoice to PO and receiptAP clerk
    $6.80
    $0.68
  • Vendor queries & expeditingBuyer
    $5.25
    $2.63
  • Pay and reconcileAP clerk
    $3.40
    $1.70

03How you compare

AutomatedYou
Under $50 · Highly automated$50–150 · Typical$150+ · Manual / paper-heavy

At $73.60 you are in the typical range. Published benchmarks vary widely by source and method, so treat these bands as indicative.

With the automation savings above

Saved a year
$551,220
Hours given back
13,470

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$883.2K a year · 12 people’s worth of time

Most of a PO’s cost is people moving information between emails, spreadsheets and the accounting system.

Bollard drafts orders from par levels, routes approvals automatically, sends POs to vendors, records receipts on a phone and matches invoices without anyone retyping a line.

See the automated process in Bollard

Method

Costing the process, step by step

Each step has a time, a person, and the share of POs that go through it. Its cost per PO is minutes ÷ 60 × loaded hourly rate × share of POs.

The true cost per PO is the sum across steps plus any other per-PO costs. Annual hours are converted to full-time equivalents at 1,760 productive hours a year.

The automation scenario removes the percentage of each step’s time you set. Software costs are not included.

Read the guide: Cost per purchase order: where the money goes, and which step to fix first

From one site to every site

Most of a PO’s cost is people retyping the same information into different systems.

Bollard connects the whole process: orders drafted from par levels, approvals routed automatically, POs sent to vendors, receipts recorded on a phone and invoices matched without manual keying.

  • Orders drafted from stock levels
  • Automatic approval routing
  • Mobile receiving at every site
  • Automatic three-way match
See Bollard in action

Questions

Frequently asked

What does a purchase order really cost?+

The fully loaded cost is the people time in every step from request to payment (deciding what to order, getting approval, creating the PO, receiving, matching the invoice, handling exceptions and paying), plus paper, postage and system costs. For manual, multi-site processes it is often well over $100 per PO.

How is cost per PO calculated here?+

For each step: minutes × loaded hourly rate × the share of POs that need that step. The steps are added together, plus any other cost per PO. Multiply by annual PO volume for the yearly total.

What is a loaded hourly rate?+

Salary plus benefits, payroll taxes and overhead, divided by productive hours. A common shortcut is base hourly pay × 1.3 to 1.5.

What is a good cost per PO?+

Published benchmarks vary widely by source, industry and method. Highly automated organisations are often quoted under $50, and manual or paper-heavy processes at several hundred dollars. Use the bands as a rough guide and track your own number over time.

Where does automation save the most?+

Usually in approvals, PO creation and invoice matching, which are mostly moving information between systems, and in exceptions, which fall sharply when receipts are recorded properly. The automation column is editable so you can model your own assumptions.

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