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Community Manager
posted Apr 12, 2018 11:00:08 AM

Purchase orders

A purchase order (PO) is a document you can send to a vendor/supplier. It states your intent to purchase products or services from them and defines the details of the purchase, such as quantities and prices. If the vendor/supplier accepts your PO, it means you have an agreement with them to receive those products or services under the terms given.

Enabling the purchase order feature 
Entering a purchase order
Applying a purchase order to a vendor/supplier transaction
Purchase order reports

Enabling purchase orders:

Purchase orders are available in QuickBooks Online Plus and in our older QuickBooks Online Edition products (with optional Sales package enabled).  To see if the feature is enabled in your company, go to the Plus Sign Icon and click on Purchase Order. If you don't see this, click Show more at the bottom.  If you get "We're sorry! Purchase Orders is turned off.", you'll need to enable the feature before you can use it.  Purchase orders aren't available in QuickBooks Online Essentials or Simple Start.

  1. Choose Gear Icon > Company settings.
  2. In the left sidebar, click Expenses.
  3. To the right, click on the pencil next to Purchase Orders.
  4. Check the Use Purchase Orders box.
  5. Enter titles for up to 3 custom fields (optional).
  6. Enter a Default Message to vendors/suppliers on purchase orders (optional).
  7. Click Save at the bottom of the page.

Right now you aren't able to customize purchase orders further with different content, layout and style options that are customizable on invoices and estimates. 

 

Entering a purchase order:

  1. Choose Plus Sign Icon > Purchase Order. If you don't see this, click Show more at the bottom.
  2. Use the Vendor/Supplier drop-down arrow to select or add a vendor/supplier.
  3. If shipping a product directly to a customer instead of to yourself, use the Ship To drop-down arrow to select the customer.
  4. If you're using custom fields, fill them in as needed.
  5. Use the Item Detail section and/or the Account Detail section to enter the purchases.
  6. Click Save and Send, Save and Close or Save and New to complete the entry.

As you enter a purchase order, you'll see that the Status in the upper-left corner is automatically set to Open.  This status will be changed to Closed when the PO is added to a vendor/supplier transaction.  You can edit an existing PO at any time to change its status if needed.

Note:  When adding a purchase order, you can select a customer for each line item.  To make these items billable to the customer(s), you must mark the Billable box after adding the PO to a vendor/supplier transaction.

 

Applying a purchase order to a vendor/supplier transaction:

If a PO is accepted and the product/service is provided by the vendor/supplier, you'll need to record a bill, a check/cheque, or Expense (a credit card charge, or a cash transaction showing what you paid (or what you owe)) to the vendor/supplier.

  • When you select a vendor/supplier on any of these transaction types, a Purchase Orders section will appear on the right hand side of the screen. To add a PO to the transaction, just click Add on the purchase order displayed. The PO will be added on the first available line in the Item Detail, Product/Service or Account Details section below.
  • POs are automatically changed to a Closed status when you add them to a transaction and then save the transaction. This prevents them from appearing on the next transaction you enter for that vendor/supplier.
  • If the wrong PO is added to a transaction by mistake, you can remove it by clicking the Trash can on the far right of the line item, if this is done before saving the transaction, the PO will stay open.  However, if you save the PO to the transaction and then have to edit the transaction by deleting the PO, the PO will remained close and must be manually changed back to Open. 

Note: QuickBooks Online doesn't have a way to add part of a PO to a transaction. If you're paying only part of a PO's amount for now, the best option is usually to add the full amount of the PO to a Bill, then record a Bill Payment for the partial amount that you're paying. A second option is to create a second PO for any "backordered items" using an extension of the Original PO number. ( i.e.: "B/O", "A", "B" or ".2, .3"etc.) This will enable the original PO to be added to the bill and the backorder can be used to determine the remainder that is due. If you choose not to record a bill, you'll need to edit the amount after adding the PO to the transaction and you'll also have to manually keep track of how much is still owed.

 

Purchase order reports:

QuickBooks Online has a number of reports that will help you with with your purchase orders. 

  • To view these, choose Reports > All Reports, then click Review Expenses and Purchases. 
  • In the Review Expenses and Purchases reports area, you will find an Open Purchase Order List report and various Purchase Detail reports.

 

 

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