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Create Purchase Orders In QuickBooks

Purchase Order (PO) System for QuickBooks

QuickBooks PO (Purchase order) module provides a tremendously easy and straightforward method for companies to generate purchase orders Finance departments can very quickly track the working capital needs to satisfy business obligations. If you're relying only on vendor invoices then chances are you won’t understand the cash flow needs until the vendor invoice shows up and that may cause uncertainty for a number of people.

There was one challenge though – to use QBO for sale orders you need to manually enter every purchase order and that could possibly be a bottleneck for Accounting and finance teams.

 

In this website post, we shall cover the fundamental purchase order process in QuickBooks Online but we're going to also cover steps to make the procedure better by leveraging purchase order tool that actually works with QuickBooks Online or Desktop (a.k.a QuickBooks Enterprise). If You want to know about How To Create Purchase Orders In QuickBooks then contact our Proadvisors.

 

But first, let’s look at some data about QuickBooks online a.k.a QBO.

Quickbooks online is a widely adopted Product and also a huge number of customers. According to number from Intuit – the organization behind QuickBooks, they will have over 2.2 million customers using Intuit Quickbooks online.

This product will be used over 193 countries and a lot of for the customers are generally smaller businesses or single owners.

However, you would be surprised whenever you have a look at some of these smaller businesses have a large number of employees.

For example, when you look at the data below from idatalabs.com, almost 40% (total sample measurements of 3,482 customers) of companies do have more than 50 employees.

Quickbooks client base

And around 11% of companies have significantly more than 500 employees.

What the business size is due to the acquisition order process in QuickBooks online?

Quickbooks purchase order process is designed with small company in your mind, it really is simple and effective.

It is made for someone to go fully into the system and produce a purchase order and send towards the supplier.

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There's two difficulties with this technique

Scalability

If you should be a single owner or a rather small company, you will possibly not be creating purchase orders after all. The process may be as simple as calling the seller in addition to vendor ships anything you need.

However, when you have revenue more than $5M and more than 100 employees, You are probably creating purchase orders to order product and services.

So manually creating purchase orders just isn't scalable for a large number of purchasing activity.

Authorization of Spend

The other issue is pre-authorization of spend before making the acquisition. So before you create a purchase order when you look at the system, you'll want to make sure it is approved during the right authorization level.

If you are using Quickbooks online purchase order process, you then either must have a manual approval process or some form of bolt on to approve the purchase orders before they have been approved.

Luckily there are many options for implementing an approval workflow process when it comes to QuickBooks purchase order process. We're going to cover these options in this website post but more to the point, we shall cover things you can do to really make the whole process more effective and productive. So read on…

Related Post: https://accountrules.my-free.website/blog/post/140991/create-purchase-orders-in-quickbooks


Quickbooks purchase order process
Let’s first talk through the method in QuickBooks, if you're just getting to grips with Quickbooks online process, you could find this helpful.

If you're already knowledgeable about the purchase order process, feel free to skip this section and go to the next section on how best to Improve the purchase order approval process

Simple tips to create a purchase order in Quickbooks Online
The easiest way to create a purchase order in Quickbooks is to create is by clicking theIcon-add purchase orderoption at the top right-hand side of the QuickBooks Online menu.

That may open the below menu, click on “Create purchase order” option

Create purchase order menu

As soon as you go through the purchase order, Quickbooks opens listed here screen where you could key in the facts associated with the purchase order. The screen is self-explanatory but we have highlighted the main element parts of the purchase order screen.

Create purchase order - Quickbooks

One of the keys section includes

1.  Payee name which can be also referred to as supplier name.

2. Email: that's where the Quickbook online will send the acquisition order towards the supplier.

3. The ship to deal with in addition to item details for the acquisition order.

4. The total amount is displayed regarding the right-hand side.

5. Ship to – is the address where the order needs to be shipped.

6. Item details: is the selection of goods that has to be put on the

QuickBooks also allows one to add items directly through the item master so it is simple to reorder commonly purchased items.

After that for you can help to save the purchase order or send the purchase order into the supplier.


ProcureDesk can automate the entire process of sending the purchase orders after it was properly authorized. Curious to observe how we do it?click here to schedule a demo.
How exactly to submit the purchase order to a supplier
Submitting purchase order is very straight forward.

Submitting purchase order

To send the purchase order to your supplier, it is possible to click on save and send option. When you click on that option, Quickbook will open listed here window

Send PO by email quickbooks

There are a few things to point out here

At the top left-hand side, you can observe the email to which the purchase order could be sent out. This is actually the email you entered while creating the purchase order. In case you desire to change this email, you can always return to the previous screen.
Just in case you wish to send the physical copy, you can easily print the purchase order and then send it to the supplier.
Just in case you want to download the purchase order, you can hover throughout the PO image and download the purchase order.
To send the acquisition order, follow on on Send and Close.

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Generally there you've got it, creating a purchase order in QuickBooks is a tremendously straight forward process.

QuickBooks purchase order approval process
Now let’s talk by what happens prior to going into the purchase order screen and produce a purchase order.

The request for a purchase order is set up by an employee who needs a particular product or service.

That request is probably sent via email and most likely attaching a requisition form.

That request is then being approved through a few email chains back and forth and finally, if it is approved, it is delivered to the purchasing team or some administrator to produce the purchase order.

In this section, we shall talk about implementing a purchase order approval process in addition to the existing purchase order process in QuickBooks.

However we are going to not only limit the discussion to your approval of purchase orders, but we're going to cover many facets of how to make the entire purchasing process better by enhancing the end to end purchasing process in QuickBooks.

What's the purchase order cost?
Purchase order cost is the cost of sending the acquisition order out to the supplier. This consists of the cost of all of the resources necessary to send the acquisition order into the supplier. What do we mean by resources?

That features everyone within the process and the time spend by them. Let’s understand what these resources are

Time spent to create a requisition- this can differ from minutes to a short while dependant on the size of the requisition.

Time spent to have it approved – This includes the full time spent to obtain the requisition approved. That can includes the time spent by executives to approve your order.

Just in case in the event that requisition is not routed towards the correct person, then it needs to re-routed to the correct person.

Time spent on creating the purchase order: Once the requisition is approved, someone needs to create the purchase order in the system and then send the acquisition order towards the supplier.

So each step mentioned above adds to the price of the purchase order process.

What does your purchase order cost?
How to understand your cost would be to do your analysis, we covered this in detail in how exactly to calculate your own personal purchase order cost

Cost per purchase order

If you should be just interested in what these costs seem like, as per one study, the cost of purchase order could up to $506.52 or as low as 35.88

Why such a broad range?

There's two grounds for it

• The survey is across different industries so that the process could vary significantly.

• The $35.88 cost is actually for top-performing companies whose operations are fully automated. So depending on the automation level into the purchasing process, this might vary.
As per our assessment, the price of the acquisition order could possibly be in the high $60 range.

The following is a tremendously high-level calculation

Purchase order configuration

If you would like calculate your own cost, use ProcureDesk purchase order cost calculator.

How to improve QuickBooks purchase order process
When you look at the above section, we covered the price of a purchase order. When you glance at your cost, you most likely looking at ways are decreasing the cost of PO and the overall process cost.

In the following section, we are going to discuss ways to enhance the purchasing process. We're going to cover how exactly to automate the process, our company is using ProcureDesk (Yes, we are biased!) as one example but go ahead and change it with just about any purchasing system

Implementing a purchase order approval process
1. This is basically the obvious step up decreasing the purchase order cost using QuickBooks. In the place of manually routing the requisition for approval, you should use an automated purchasing system like ProcureDesk. Here are the steps involved in the process.

An easy way for users to generate a requisition in the system, users should certainly create a requisition using a straightforward interface as opposed to using spreadsheets to enter data.

You can further simplify the requisition process by implementing catalogs for frequently purchased items to ensure users don’t need to type that information. We shall discuss supplier catalogs within the next section.

2. The second part of the process is to have an approval process for routing the requisitions to the correct person for approval. Here you need to think about the efficiency regarding the process and find a balance between approvals and efficiency associated with the process.

For instance, if you set up an activity that each and every purchase needs to be approved by the Department Director, then that might never be the absolute most efficient usage of their time.

Imagine when you have 10-15 requisitions a day, then your Director might be spending 20-30 minutes just approving requisitions. Which is not a simple yet effective use of the employee’s time.

One other factor to take into account while setting up approval is the fact that higher you choose to go for approval, the less attention is paid towards the details.

If the senior management can be involved that without these approvals, the Spend could be away from budget then there's an easy way to that. Implement Budgets and ProcureDesk automatically ensures that the spend remains beneath the budget.

So this is what we suggest on approvals

• Identify the absolute most efficient process for approvals, don’t overcomplicate it.

• Use category-based approval workflows to ensure you are purchasing just the right products. For example, all IT purchases should really be routed to IT for approval.

•  Define a threshold above which the requisition has to be approved by senior management. In this way it is possible to control that only some items are provided for the senior management.

Keep in mind that the approval process can always be changed. If you are just starting out and you don’t have much historical data on approval timing a history then you might need to try a simpler process first and you can add conditions to it as required.

Implement catalogs for simple search
The next thing is implementing a better purchase process in Quickbooks could be the usage of catalogs.

Catalogs enable you to group together commonly purchased items which means your users don’t need certainly to keep on entering the same data over and over again.

Catalogs may be used for products and services. For instance, if you have got a contract with a temp agency for temporary resources, then configure that in the catalog. The next occasion, someone has to purchase temp services, they could just pick it up from the catalog instead of calling procurement.

For things like office supplies, you need to use external catalogs, also referred to as punch-outs.

Punchouts are external catalogs managed by suppliers however with your unique pricing and product catalog. As an example, as opposed to creating a catalog with 1000’s of items from Staples or Office Depot, you are able to just use their existing catalog.

When Punchout is integrated with a procurement system, it allows the user to go out and look at items then again the device routes the requisition back for approval ahead of the order may be placed.

This is the best of both worlds, your users have the internet shopping experience and you are clearly routing the purchases to your chosen vendors.

Enhance the productivity associated with Purchasing team by implementing a request and quote process.

A purchase order is one last part of the purchasing process. Before that, you would normally see a request and a quote process.

Let’s take a good example

Mike in marketing needs to print brochures from a new product launch. Since it is an innovative new product, he does not have a preferred pricing and a preferred supplier.

If your company has a purchasing team, Mike will get in touch with the team at this time to inquire about for quotes from a few suppliers. Most likely this a back and forth over email on specifications, quantities, etc.

Once that is finalized, a buyer from the purchasing team would get in touch with the suppliers to get quotes via email or over the device.

Once this is certainly done, the client sends the quote into the requestor, who then creates a requisition this is certainly sent for approval.

Following the requisition is approved, the buyer creates the purchase order and then send towards the supplier.

The process stated earlier just isn't an exaggeration but an extremely common occurrence in a lot of companies. There's two difficulties with the manual request and quote process.

• It is highly inefficient since there are multiple manual steps in the process additionally the same data is being entered in requisition first and then in to the purchase order.

• It is extremely difficult to keep an eye on quotes for audit purpose. For example, if your policy requires one to keep track of quotes, then you definitely probably need certainly to search through your emails to find those quotes

The procedure mentioned above can easily be automated, which increase productivity and lower errors while creating orders.

For example, Imagine a procedure where in fact the requestor can send the request electronically, the client can send that request to the supplier electronically.

After the response is received, the same quote are able to be converted into a purchase order. When the order is approved, the device creates the purchase order directly when you look at the Quickbooks and then send the PO into the supplier.

This method is efficient much less error-prone. Systems like ProcureDesk can very quickly accomplish that.

Reduce spend through Budget controls
Quickbooks has a terrific way to structure the budgets in the system.

But how can you link those budgets to your purchases?

• how can you ensure that budget owners have complete visibility into the budget consumption and how much of their budgets are already consumed and what amount is left?

• how will you make certain that the budget owners can review the purchases ahead of the purchase order is put against their budgets?

These are the questions that every company needs to address to make sure they will have complete transparency into the process.

This could all sound overwhelming but the whole purchasing process can be improved because of the following

• A process whereby the orders are linked with the budgets. In that process, a system is checking whether funds can be found from the selected budget (based on past consumption).

• A process whereby the purchases are often approved because of the budget owners in line with the purchase volume.

•A process where you can easily report on purchases made against a certain budget.

All this work could be automated by a purchasing system like ProcureDesk.

Automatically create purchase orders in Quickbooks
We talked about a couple of ideas when you look at the sections above on how best to increase the purchasing process in Quickbooks.

But all this could be useless when you have to then manually create the purchase order in the QuickBooks systems.

Luckily, this method could be fully automated using purchasing systems. By integrating your purchasing system with QuickBooks online version, it is simple to streamline the workflow for purchasing.

Once the order is fully approved in your purchasing system, or just about any other front end module for the PO process, the acquisition order are able to be delivered to the QuickBooks system for further processing.

The integration with Quickbooks is hassle free, but you should clearly define the utilization cases for integration and test them to ensure purchase orders are moving to Quickbooks seamlessly.

For instance, In ProcureDesk implementation, we clearly identify most of the use cases by using the services of our customers after which set up a test arrange for ensuring successful integration.

Automate transmission of a purchase order to suppliers

As we saw in the earlier sections, Quickbooks allows you to send the purchase order out to your suppliers. It is possible to email it to your suppliers or download the acquisition order and send it off to the suppliers.

Since we have already automated the acquisition order process so far, why don't you fully automate it by automatically sending the purchase order to your supplier.

The bolt-on purchasing system you will be using with Quickbooks should easily have the ability to automatically send the acquisition order into the supplier contact.

This way you might be ensured that when your order is approved, there's absolutely no additional step expected to send the purchase order towards the supplier.

One word of caution though, we often see that our customers don’t maintain a clear vendor database, so you may desire to make sure the order contacts in your supplier records are correct or over to date. Otherwise, you are able to land up in a situation where orders are not being delivered.

The greatest practice of this type would be to ensure you get generic emails for orders, as an example, order@suppliername.com. The reason for that is that supplier sales personnel would often keep on changing and if the email used is not generic, you need to keep on updating the seller records.

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