A purchase order (PO) is a document you can send to a vendor/supplier. 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/supplier accepts your PO, it means you have an agreement with them to receive those products or services under the terms given.
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 Plus Sign Icon and click on Purchase Order. If you don't see this, click Show more at the bottom. If you get "We're sorry! Purchase Orders is turned off.", you'll need to enable the feature before you can use it. Purchase orders aren't available in QuickBooks Online Essentials or Simple Start.
- Choose Gear Icon > Company settings.
- In the left sidebar, click Expenses.
- To the right, click on the pencil next to Purchase Orders.
- Check the Use Purchase Orders box.
- Enter titles for up to 3 custom fields (optional).
- Enter a Default Message to vendors/suppliers on purchase orders (optional).
- 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. The Purchase Order will default to the Master sales form in your Custom Form Styles.
- Choose Plus Sign Icon > Purchase Order. If you don't see this, click Show more at the bottom.
- Use the Vendor/Supplier drop-down arrow to select or add a vendor/supplier.
- If shipping a product directly to a customer instead of to yourself, use the Ship To drop-down arrow to select the customer.
- If you're using custom fields, fill them in as needed.
- Use the Item Detail section and/or the Account Detail section to enter the purchases.
- Note: If selecting the Item Detail section the Product/ Service must be marked to 'I purchase this product/ service from a vendor." to appear in the drop down list to select from.
- Click Save and Send, Save and Close or Save and New to complete the entry.
As you enter a purchase order, you'll see that the Status in the upper-left corner is automatically set to Open. This status will be automatically changed to Closed when all quantities and/or amounts on the purchase order are indicated to be received and/or paid across all linked transactions. You can also edit an existing PO at any time to change its overall status, or the status of its individual lines.
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/supplier transaction.
If a PO is accepted and the product/service is provided by the vendor/supplier, you'll need to record a bill, a check/cheque, or Expense (a credit card charge, or a cash transaction showing what you paid (or what you owe)) to the vendor/supplier.
- When you select a vendor/supplier on any of these transaction types, a Purchase Orders section will appear on the right hand side of the screen. To add a PO to the transaction, just click Add on the purchase order displayed. The PO will be added on the first available line in the Item Detail, Product/Service or Account Details section below.
- A purchase order is automatically closed when all quantities and/or amounts on the purchase order are accounted for across all of its linked transactions.
- If the wrong PO is added to a transaction by mistake, you can remove it by clicking the Trash can on the far right of the line item, if this is done before saving the transaction, the PO will stay open. However, if you save the PO to the transaction and then have to edit the transaction by deleting the PO, the PO will remained close and must be manually changed back to Open.
Note: QuickBooks Online doesn't have a way for you to add negative line items from a purchase order onto a bill / check / expense. If you'd like to record a potential refund, the best option is to record a vendor credit.
Receiving or paying part of a purchase order:
If you are receiving a partial amount on a purchase order, or making a partial payment, you can add part of a purchase order to a transaction, and link multiple transactions to a single purchase order.
- Choose Plus Sign Icon > Bill, Check, or Expense
- Use the Vendor/Supplier drop-down arrow to select or add a vendor/supplier. A purchase order section will appear on the right hand side of the screen.
- To add a PO to the transaction, click Add on the purchase order displayed. Details from the purchase order will be added on the first available line in the Item Detail, Product/Service or Account Details section.
- Edit the quantity or amount for each line to reflect the portion that you would like to record as partially received or paid.
QuickBooks automatically closes a purchase order when all quantities and/or amounts on the purchase order are accounted for across all of its linked transactions. You can manually close the purchase order by changing the status on the purchase order, or by manually closing individual lines on the purchase order.
- To view these, choose Reports > All Reports, then click Review Expenses and Purchases.
- In the Review Expenses and Purchases reports area, you will find the Open Purchase Order List and Open Purchase Order Detail report and various Purchase Detail reports.