How to Create Purchase Orders in QuickBooks

QuickBooks is a popular accounting software that helps businesses manage their finances. One of the features it offers is the ability to create and manage purchase orders (POs). This streamlines the procurement process, making buying from suppliers easier and more organized. Below, we explore how to set up and create purchase orders in both QuickBooks Online and QuickBooks Desktop.

What is a Purchase Order?

A purchase order is a document sent from a buyer to a supplier. It specifies the items, quantities, and agreed prices for products or services. When the supplier accepts the purchase order, it forms a contract between the buyer and seller.

Advantages of Using Purchase Orders

• Organization: Purchase orders help keep orders organized and documented.
• Tracking: POs provide a clear history of procurement, which aids in tracking spending and budgeting.
• Accuracy: Using a purchase order minimizes miscommunication, ensuring that both parties agree on what was ordered.
• Approval Process: POs can be set up for internal approval, providing a layer of governance in spending.

Creating Purchase Orders in QuickBooks Online

Step 1: Enable the Purchase Order Feature

1. Click the Gear icon in the upper right corner.
2. Select Account and Settings.
3. Navigate to the Expenses tab.
4. In the Purchase orders section, click the Edit icon.
5. Toggle Use purchase orders to On.
6. Optional: Add up to three custom fields and a default message for vendors.
7. Click Save, then Done.

Step 2: Create a Purchase Order

1. Click the + New button on the left sidebar.
2. Under the Vendors section, select Purchase order.
3. Choose the vendor from the Supplier dropdown.
4. Review or enter the Mailing address.
5. If shipping directly to a customer, select Ship to and verify the shipping address.
6. Enter the Purchase Order date.
7. In the Item details section, add the products or services, specifying quantities and rates.
8. Click Save and close or Save and send to email the PO to the vendor.

You can find more detailed instructions on the official QuickBooks help page.

Creating Purchase Orders in QuickBooks Desktop

Step 1: Enable the Purchase Order Feature

1. Go to the Edit menu and select Preferences.
2. Choose Items & Inventory, then click the Company Preferences tab.
3. Check the box for Inventory and purchase orders are active.
4. Click OK.

Step 2: Create a Purchase Order

1. Navigate to the Vendors menu and select Create Purchase Orders.
2. From the Vendor dropdown, select the vendor you are ordering from.
3. Fill in the necessary fields, including the items you wish to order.
4. Click Save & Close.

For a comprehensive guide on using purchase orders in QuickBooks Desktop, visit their support page.

Conclusion

Using QuickBooks to manage purchase orders helps streamline the procurement process. POs ensure you keep track of orders, avoid mistakes, and maintain better control over your spending. Whether you use QuickBooks Online or Desktop, creating POs is a straightforward process that improves your overall workflow.