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
| Step | Who | Minutes | $/hour | % of POs | Cost / PO | Automation 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
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
Email me this brief
Send the $74-per-PO brief to your inbox, ready to forward.
You get the headline figures and a link that reopens this exact scenario. No account, no newsletter.
$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.
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.
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
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.
Related tools
All tools- Approval Matrix BuilderSet approval thresholds by role, category and site, and catch segregation-of-duties conflicts.
- Three-Way Match Tolerance CalculatorTest price and quantity tolerances to balance exception workload against invoice leakage.
- Purchase Order GeneratorCreate a PO with ship-to sites, pack sizes, cost centres and approval lines, then download a PDF.
- EOQ Calculator with Price BreaksEconomic order quantity with vendor price breaks, case-pack rounding and shelf-life limits.
Free tools
Calculators and document builders for organisations that buy across many sites.
Runs in your browser
I. Spend & Leakage
II. Purchasing Documents
III. Inventory & Stock
IV. Governance & Controls
Free tools, no sign-up. Your figures are processed in your browser and are not uploaded to a server unless you ask us to email you a result. Results are estimates for planning and do not constitute financial, legal or tax advice.