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Purchase orders

Answer ID: 3324

A purchase order (PO) is a document you can send to a vendor. 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 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 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 Vendors tab and look for Purchase Order.  If you don't see that option, 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 Company > Preferences.
  2. In the left sidebar, click Vendors & Purchases.
  3. In the left sidebar below Vendors & Purchases, click Purchase Orders.
  4. Check the Purchase Orders box.
  5. Enter titles for up to 3 custom fields (optional).
  6. If you want to use a specific numbering system on POs, click Use custom transaction numbers.  For more information on how to set this up, see our KnowledgeBase article KB 1105, How can I set up, change or reset the transaction numbers on my sales forms?  http://support.qbo.intuit.com/support/answers.cfm?faq_id=1105
  7. Enter a default Message to vendors on purchase orders (optional).
  8. 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.  If you'd like to leave feedback about this subject for future product releases, you can click the Feedback link from the bottom of any page in the QBO to do so.

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Entering a purchase order:

  1. Choose Vendors > Purchase Order.
  2. Use the Vendor drop-down arrow to select or add a vendor.
  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 Itemize by Product/Service section and/or the Itemize by Account section to enter the purchases.
  6. Click Save, Print or Send to complete the entry.

As you enter a purchase order, you'll see that the Status in the upper-right corner is automatically set to Open.  This status will be changed to Closed when the PO is added to a vendor 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 transaction.

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Applying a purchase order to a vendor transaction:

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

  • When you select a vendor on any of these transaction types, a Purchase Orders section will appear below the form if that vendor has any open POs.  To add a PO to the transaction, just click the Add Purchase Order button. The PO will be added on the first available line in the Itemize by Product/Service 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.
  • If the wrong PO is added to a transaction by mistake, you can remove it by clicking the X button to the left of the line that was added.  However, removing the line does not change the PO status back from Closed to Open, so you'll need to edit the PO and change the status yourself if it should remain 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

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Purchase order reports:

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

  • To view these, choose Reports > Report List, then click Vendors in the left sidebar.
  • In the Vendor reports area, you will find an Open Purchase Order List report and various Purchase Detail reports.

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