Creating purchase orders in QuickBooks Online (QBO) is essential for businesses that need to efficiently manage inventory, vendor relationships, and purchasing workflows. A purchase order (PO) is a formal document issued to a supplier to confirm an order, specifying the product details, quantity, and agreed price. Using QuickBooks Online to create POs not only simplifies the purchasing process but also ensures accurate record-keeping and improved financial reporting. This guide will walk you through the steps of creating purchase orders in QuickBooks, helping you streamline your procurement process.
Why Use Purchase Orders in QuickBooks?
Purchase orders provide several advantages for managing business finances:
- Better Inventory Management: Purchase orders help track incoming inventory, which can prevent stock outs or overstock situations.
- Cost Control: With POs, you lock in prices with vendors and monitor costs more closely.
- Improved Vendor Relationships: Sending accurate purchase orders ensures clear communication with suppliers and helps avoid misunderstandings.
- Enhanced Financial Accuracy: POs ensure that all purchases are accounted for in QuickBooks, contributing to accurate expense reporting and budgeting.
How to Create a Purchase Order in QuickBooks
Setting up purchase orders in QuickBooks Online is a straightforward process. Here’s a step-by-step guide on how to do it:
Step 1: Log in to QuickBooks Online
Log in to your QuickBooks Online account. Ensure that you have the necessary permissions to create purchase orders, as this function might be restricted based on user roles within your QuickBooks setup.
Step 2: Enable Purchase Orders (if needed)
If you haven’t used purchase orders in QuickBooks before, you might need to enable this feature. To do this, go to Settings (gear icon) > Account and Settings > Expenses. Under the Purchase Orders section, turn on the purchase order feature, save your settings, and exit.
Step 3: Navigate to the New Purchase Order
From your dashboard, click on the + New button on the left-hand side, then select Purchase Order from the drop-down list. This will open the purchase order creation screen.
Step 4: Select a Vendor
In the purchase order screen, start by choosing the vendor you’re issuing the order to from the Vendor drop-down list. QuickBooks will automatically populate relevant information, like the vendor’s address, if it’s already saved in your system. If the vendor isn’t listed, you can quickly add a new one.
Step 5: Fill in Order Details
Now, add details about the items you’re purchasing:
- Category/Item Details: Choose the products or services from your inventory or chart of accounts.
- Quantity: Enter the number of units you’re ordering.
- Rate: Input the agreed-upon price per unit.
- Amount: QuickBooks will automatically calculate the total based on quantity and rate.
Step 6: Set the Delivery Date and Location
Specify the expected delivery date and the location where you want the items to be delivered. These details ensure accurate tracking and coordination with the vendor.
Step 7: Add Any Additional Information
You can use the Memo field to add notes or special instructions for the vendor. This can include delivery instructions, special requirements, or reference numbers, helping ensure that your order is fulfilled accurately.
Step 8: Save and Send the Purchase Order
Once all details are verified, click Save and Close if you want to finalize the purchase order, or Save and Send to email the order directly to the vendor. QuickBooks will store a digital copy of the PO, making it easy to retrieve whenever needed.
Tips for Efficient Purchase Order Management in QuickBooks
- Use Saasant for Bulk Orders: If your business handles a high volume of purchase orders, consider using tools like Saasant. Saasant integrates with QuickBooks Online, making it easy to create, import, or manage multiple POs in one go.
- Regularly Review Open POs: Monitoring open purchase orders ensures that items are received on time and helps you keep track of pending deliveries.
- Automate Notifications: Set reminders to follow up on pending orders or confirm deliveries with vendors, reducing the risk of missed or delayed shipments.
- Maintain Accurate Inventory Records: With each PO you create, update your inventory and expenses in QuickBooks to ensure seamless financial tracking.
Final Thoughts
Creating purchase orders in QuickBooks Online is a crucial practice for businesses looking to streamline their purchasing process. By issuing POs, you can manage your costs more effectively, maintain accurate records, and foster reliable relationships with vendors. For businesses managing multiple vendors or high transaction volumes, tools like Saasant can simplify PO creation and management, making the process even more efficient.