Quickbooks Purchase Order

QuickBooks is one of the most popular accounting software solutions in the world today. It offers a variety of features that small to medium-sized businesses find valuable, including the ability to create and manage purchase orders. This article aims to explain everything you need to know about QuickBooks purchase orders.

How Does A Purchase Order Work in QuickBooks?

A purchase order (PO) is an official document sent by a buyer to a vendor detailing the products or services to be purchased. In QuickBooks, purchase orders help streamline the procurement process. Here’s how a purchase order works in QuickBooks:

1. Creation: First, you need to create a purchase order in QuickBooks by going to the “Vendors” menu and selecting “Create Purchase Orders.”
2. Details: Next, enter the relevant details, such as the vendor’s name, the items to be purchased, quantities, and agreed prices.
3. Approval: Once the purchase order is created, it can be reviewed and approved by the relevant parties.
4. Sending: After approval, the purchase order can be sent to the vendor either by email or printed out.
5. Receiving: Upon receiving the goods or services, you’ll compare the order against the received items to ensure accuracy.
6. Billing: Finally, when the vendor sends an invoice, you can match it with the purchase order and receipt to streamline the billing process.

For instance, if you’re running a retail store and need to stock up on inventory, you would use QuickBooks to create a purchase order detailing the items you need, how many, and their costs. This ensures both you and your vendor are on the same page.

What is the Difference Between a Purchase Order and a Bill in QuickBooks?

Understanding the difference between a purchase order and a bill is crucial for proper accounting:

1. Purchase Order:

A purchase order is an initial request to buy goods or services.

It does not, by itself, affect accounts payable or inventory levels.

It is a formal record of what you intend to purchase.

Example: When you create a purchase order in QuickBooks for 100 units of an item, it does not immediately impact your financial statements.

2. Bill:

A bill is received from the vendor after the goods or services have been delivered.

It directly affects accounts payable and is recorded as a liability.

It indicates that you owe money to the vendor.

Example: When you receive a bill for those 100 units and enter it into QuickBooks, it updates your accounts payable, indicating that you owe the specific amount to the vendor.

Is There a Purchase Order Template in QuickBooks?

Yes, QuickBooks provides built-in templates for creating purchase orders. These templates can be customized to suit your business needs. Here’s how you can access and customize a template:

1. Access Template: Go to the “Lists” menu, select “Templates,” and choose “Purchase Order.”
2. Customization: Click on “Customize,” and you can modify the fields, add your company logo, change fonts, and more.
3. Default Set-Up: Once customized, you can set this as your default purchase order template by selecting “Use this template” for future purchase orders.

What Version of QuickBooks Has Purchase Orders?

Not every version of QuickBooks includes the purchase order feature. The functionality is available in:

1. QuickBooks Desktop Pro
2. QuickBooks Desktop Premier
3. QuickBooks Desktop Enterprise
4. QuickBooks Online Plus
5. QuickBooks Online Advanced

For example, if you’re a small business owner using QuickBooks Online Essentials, you’ll need to upgrade to the Plus or Advanced plan to access the purchase order feature.

QuickBooks Purchase Order Template

QuickBooks allows you to use a pre-made template or create your own to streamline the purchase order process. Here’s an example of a simple QuickBooks purchase order template:

1. Company Information: This includes your business name, address, and contact information.
2. Vendor Information: This section will have the vendor’s name, address, and contact details.
3. Purchase Order Details: Key details such as the purchase order number, date, and the terms of the order.
4. Itemized List: A table outlining the items to be purchased, quantities, unit prices, and total amounts.
5. Approval Section: A space for approvals by authorized personnel.

This template can be edited in QuickBooks to fit your specific business needs.

QuickBooks Purchase Order vs Bill

As previously mentioned, a purchase order is a buyer’s request to a vendor, whereas a bill is the vendor’s request for payment. Here’s a concise comparison:

1. Impact on Accounts:

Purchase Order: No immediate impact.

Bill: Directly affects accounts payable.

2. Document Purpose:

Purchase Order: Specifies what is to be purchased.

Bill: Indicates what is owed.

3. Timing:

Purchase Order: Created before receiving goods/services.

Bill: Received after goods/services have been provided.

For example, creating a purchase order for 50 office chairs does not immediately show up in your expenses. However, once you receive a bill for those 50 chairs, it gets recorded in your accounts payable, reflecting that you owe money for the purchase.

QuickBooks Purchase Order Online

QuickBooks Online offers a user-friendly interface to manage purchase orders effectively. Here’s how you can create a purchase order online:

1. Login to QuickBooks Online: Open your QuickBooks Online account.
2. Navigate to Expenses: Go to the “Expenses” menu and select “Vendors.”
3. Create Purchase Order: Click on “New Transaction” and then “Purchase Order.”
4. Fill Details: Enter vendor information, items to be ordered, quantities, prices, and any additional notes.
5. Save & Send: Save the purchase order and email it directly to the vendor.

QuickBooks Online also allows you to attach documents, ensuring a comprehensive record of all communications.

QuickBooks Purchase Order Process

The purchase order process in QuickBooks involves several steps, ensuring accuracy and efficiency:

1. Vendor Setup: First, set up your vendor in QuickBooks by adding essential details like name, address, and contact information.
2. Create Purchase Order: Navigate to the purchase order section and create a new order, filling in all necessary details.
3. Approval Workflow: Implement an approval process where designated personnel review and approve the purchase order before it’s sent to the vendor.
4. Sending Purchase Order: Send the approved purchase order to your vendor.
5. Receiving Goods/Services: Upon receiving the goods/services, check them against the original purchase order.
6. Enter Bill: When you receive the bill from the vendor, match it with the purchase order and receipt to ensure everything is accurate.
7. Payment: Make payment to the vendor as per the agreed terms.

For example, if you’re a book retailer, you would create a purchase order for a batch of books, get it approved, send it to the publisher, and then follow through with the process until payment is made.

QuickBooks Purchase Order Intuit

Intuit is the parent company behind QuickBooks. They offer extensive resources and support for managing purchase orders in QuickBooks. For more in-depth help, you can visit their official site for guides, customer support, and additional resources.

QuickBooks Purchase Order App

While QuickBooks itself has a built-in purchase order feature, there are also third-party apps that integrate with QuickBooks to enhance this functionality. Some of these apps offer advanced features like multi-location inventory management, detailed analytics, and more. However, among all these options, Ordoro stands out as the best inventory management software with purchase order features.

1. Ordoro: A comprehensive inventory management tool that includes built-in purchase order features. With several hundreds of happy ecommerce merchants, Ordoro is a reliable choice for any business.
2. SOS Inventory
3. TradeGecko

How to Create a Purchase Order in QuickBooks Desktop

Creating a purchase order in QuickBooks Desktop is straightforward. Follow these steps:

1. Open QuickBooks Desktop: Start your QuickBooks Desktop application.
2. Vendors Menu: Go to the “Vendors” menu and select “Create Purchase Orders.”
3. Add Vendor: Choose the vendor you are creating the purchase order for.
4. Enter Details: Fill in the necessary information, such as the items, quantities, and agreed prices.
5. Save and Print/Send: Save the purchase order, and either print it out for physical delivery or send it directly via email.

For instance, if you’re managing a chain of coffee shops, you could create a purchase order in QuickBooks Desktop for coffee beans, specifying the vendor, item quantities, and price.

QuickBooks Purchase Order Approval

Purchase order approval is a crucial step in the procurement process. QuickBooks allows you to implement an approval workflow to ensure each purchase order is reviewed:

1. Set Up Approval Roles: Define roles within your QuickBooks account for who can create and who can approve purchase orders.
2. Review Process: When a purchase order is created, it is sent to the designated approver for review.
3. Approval/Rejection: The approver can then either approve or reject the purchase order. Once approved, it can be sent to the vendor.

For example, in a medium-sized manufacturing company, a purchase order for raw materials might require multiple levels of approval to ensure budget compliance and accuracy.

Conclusion

Managing purchase orders efficiently is essential for any business looking to streamline procurement and maintain accurate records. QuickBooks offers robust functionality, both online and in desktop versions, to simplify this process. Coupled with powerful inventory management software like Ordoro, you can ensure a seamless procurement experience. Ordoro, in particular, has garnered high praise from several hundreds of happy ecommerce merchants, making it an ideal choice for businesses looking to enhance their inventory management capabilities.

For more information on how to get started with QuickBooks purchase orders, you can visit the Intuit QuickBooks Help Center or the Ordoro Website.