If you're managing purchase orders through email threads, shared spreadsheets, or directly in Xero, you've probably run into the familiar problems: a supplier claims you never sent a PO, you ordered something you already had stock of, a delivery arrives and nobody knows which PO it's for, or your accounting doesn't match what actually came through the door.
Purchase order software solves these problems. This guide explains what it actually does, what to look for, how it connects to Xero, and what options are available for NZ businesses.
What Purchase Order Software Does
At its core, purchase order software manages the procurement cycle, from raising an order through to receiving goods and matching it to a supplier invoice. In practice, that means:
Creating and Sending Purchase Orders
You create a PO in the system by selecting the supplier, adding products, specifying quantities and agreed prices, and setting a required delivery date. The system generates a formatted PO document that can be emailed directly to the supplier from within the platform. Every PO gets a unique number and is tracked from creation through to fulfilment.
Tracking Outstanding Orders
A dashboard shows you every open PO: what's been sent, what's overdue, what's been partially received, and what's still expected. Instead of digging through email to find out where an order is, you check the system.
Receiving Against Purchase Orders
When a delivery arrives, you receipt it against the original PO in the system. The software records what actually came in (which may differ from what was ordered, such as wrong quantities, substitutions, or short shipments), updates your stock levels immediately, and flags any discrepancies for follow-up.
Three-Way Matching
When the supplier invoice arrives, the system matches it against the original PO and the goods receipt. If the invoice amount doesn't match what was ordered or what was received, the discrepancy is flagged before you pay. This prevents overpayment and catches supplier billing errors.
Reorder Point Automation
Good PO software monitors your stock levels and alerts you (or automatically generates draft POs) when products drop below their reorder points. Instead of reacting to stockouts, you're ordering proactively based on rules you set.
Supplier Management
Maintain a database of suppliers with contact details, lead times, payment terms, and pricing history. When you raise a PO for a product, the system knows which supplier to use, what price to apply, and how long delivery typically takes.
Why Xero Alone Isn't Enough
Xero does have a purchase order feature, and it's worth being clear about what it covers and where it falls short.
What Xero's PO feature does:
- Create and send purchase orders to suppliers
- Add line items using your Xero products list
- Convert approved POs to bills when goods are received
Where it falls short:
- No stock level integration, so Xero doesn't know your current on-hand quantities and can't alert you when to reorder or warn you that you already have enough stock
- No goods receipt workflow, meaning receipting stock against a PO in Xero requires manual steps rather than a guided process
- No three-way matching, so Xero doesn't automatically compare POs, receipts, and invoices
- No reorder point automation, meaning nothing monitors your stock and suggests when to reorder
- No batch or expiry tracking on receipt, so you can't record batch numbers or expiry dates when goods arrive
- No backorder management, so if a supplier delivers 80 of the 100 items ordered, managing the outstanding 20 is manual
For a detailed breakdown of Xero's inventory limitations, see our Xero inventory management guide.
This doesn't mean Xero is doing anything wrong. It's accounting software, not procurement software. The right approach for most NZ businesses is dedicated inventory management software that handles the full PO workflow and syncs the financial entries to Xero automatically.
What to Look For in Purchase Order Software
Goods Receipt Against PO
This is the most important feature. When a delivery arrives, your team should be able to pull up the original PO on a phone or tablet, scan or check off each item as it comes off the truck, and confirm receipt. Stock levels should update immediately. The system should handle partial receipts (split deliveries) without losing track of what's still outstanding.
Xero Integration
Your purchase bills should flow into Xero automatically when goods are received and invoiced. The integration should handle:
- Automatic creation of supplier bills in Xero from receipted POs
- Two-way contact sync (suppliers in your inventory system match suppliers in Xero)
- COGS and inventory account mapping
- GST/tax handling
The integration should be bi-directional and near-real-time, not a daily CSV export.
Reorder Point Alerts
Set a minimum stock level for each product. When on-hand quantity drops to that level, the system alerts you (or creates a draft PO). The best systems let you set reorder quantities based on historical demand, supplier lead times, and safety stock calculations.
Supplier Pricing History
When you raise a PO, the system should remember what you paid last time and flag if you're being charged more. Over time, you build a pricing history per supplier per product, which is useful for negotiating and for catching price increases.
Batch and Expiry Date Capture on Receipt
If you're a food manufacturer, importer, or anyone subject to traceability requirements, you need to record batch numbers and expiry dates when goods arrive, not after the fact. This data should flow through to your inventory so you can trace any product back to its incoming batch. For a detailed look at what batch tracking involves, see our batch tracking guide for NZ food manufacturers.
Mobile Access for Warehouse Receiving
Goods arrive in the warehouse, not the office. Your receiving team needs to be able to process deliveries on a phone or tablet, scanning barcodes to confirm received items. If the PO system requires a desktop computer for receiving, it creates delays and data entry errors.
Multi-Supplier and Multi-Currency
If you source from multiple suppliers, including overseas suppliers, you need multi-currency support. The system should handle the exchange rate at time of order and time of receipt, with the difference posted to an FX gain/loss account in Xero.
Purchase Order Software Options for NZ Businesses
Frostbyte Pro
Frostbyte Pro includes a complete purchase order workflow as part of its core inventory management platform. POs are created from within the system, sent to suppliers, received against on the warehouse floor (with barcode scanning), and synced to Xero automatically as supplier bills.
Key features for NZ businesses:
- Full PO-to-receipt workflow with barcode scanning
- Batch number and expiry date capture on receipt
- Automated reorder point alerts
- Multi-warehouse receiving (goods arrive at the right location)
- Automatic Xero sync (supplier bills created on receipt)
- NZD pricing, NZ-hosted data, NZ support
Pricing: $89.95 NZD per user/month. See current pricing.
Unleashed
Unleashed has strong purchase order management, particularly for wholesale distributors with complex supplier pricing structures. It handles multi-currency well and has a well-tested Xero integration.
Good fit for: established distributors and wholesalers with high PO volumes and multiple suppliers. Pricing starts at ~$380 NZD/month.
Cin7 Core
Cin7 Core (formerly DEAR Inventory) includes comprehensive PO management with three-way matching, goods receipt workflows, and a solid Xero integration. It's feature-rich but more complex to configure.
Good fit for: businesses that need the full Cin7 feature set. Pricing starts at $349 USD/month ($600 NZD).
inFlow Inventory
inFlow covers purchase order basics: create POs, receive goods, and track orders. It's simpler than the platforms above and works for businesses with straightforward procurement needs. The Xero integration is functional but less deep than Unleashed or Frostbyte Pro.
Good fit for: small businesses with simple purchasing needs. Pricing from ~$186 USD/month.
Standalone PO Tools (Not Recommended for Most Businesses)
There are standalone purchase order tools (Procurify, Coupa, etc.) designed for companies that need approval workflows and spend controls across multiple departments. For most NZ product businesses, these are overkill. The purchase order workflow is best managed inside your inventory system, where it connects directly to stock levels and supplier invoices. Separate PO software creates an integration problem rather than solving one.
The Right Approach: PO Software Inside Your Inventory System
The most important principle when choosing purchase order software: it should be part of your inventory management platform, not a separate tool.
Here's why:
Stock-aware purchasing. When your PO software knows your current stock levels, it can show you that you already have 200 units before you order another 500. It can calculate reorder quantities based on demand history. It can flag that a product is already on order from a previous PO. Standalone PO tools don't have this context.
Automatic receiving updates. When a delivery is receipted against a PO, your stock levels should update immediately, in the same system, without any import or sync. If your PO software is separate from your inventory software, receiving requires data entry in two places.
Batch tracking continuity. For businesses with traceability requirements, batch numbers recorded on receipt need to flow through to stock, to pick and pack, and to customer dispatch, without any manual re-entry. This is only possible when PO management and inventory management are in the same system.
Single source of truth. Your warehouse team, purchasing team, and management all need to see the same data. A single platform prevents the version conflicts and discrepancies that come from maintaining multiple systems. This is especially important for wholesalers and distributors managing high PO volumes across multiple suppliers.
For a broader look at how inventory management systems work and what to evaluate, see our guide to choosing an inventory management system.
Getting Started
If you're currently managing purchase orders through email and spreadsheets, here's a practical path forward:
Audit your current process. How many POs do you raise per month? How many suppliers? What's the average value? How often do you have receiving discrepancies? This helps you understand the scale of what you're solving.
Choose an inventory platform that includes PO management, not a separate PO tool.
Set up your supplier database before going live. Accurate supplier contacts, lead times, and pricing information makes the system work correctly from day one.
Do a physical stock count and enter accurate opening balances. Reorder point alerts only work if your stock levels are correct.
Run one complete cycle before going live: raise a PO, receive goods against it, verify the stock level update, and check that the supplier bill appeared in Xero correctly.
Set reorder points for your top 20 products to start. Refine as you build confidence in the system.
Frostbyte Pro includes a complete purchase order workflow built into its inventory management platform, with barcode receiving, batch tracking, Xero sync, and reorder alerts. See all features or start a free trial to see it in action.