Potholes allow for water to seep beneath the asphalt surface which causes erosion and undermining of the asphalt. By not addressing these areas, they will quickly become a much larger and more costly repair.
When patching potholes, we would always prefer to sawcut the edges around the pothole prior to patching. Another option would be to mill down the asphalt around the patch prior to patching. Milling would eliminate any 90 degree cuts and would also eliminate water seepage and stop further deterioration. With either option, we would adjust the stone base as needed to be sure it is at the proper elevation. All patches would be installed at the full depth of the adjacent surface using new surface grade hot mix asphalt.
If your budget does not allow… or if you just have too many potholes, we can also just fill the potholes. The areas would need to be dry prior to repairing. This method of repair is generally bid by the tonnage of asphalt required.