When using Quickbooks, you may come across the term “purchase order.” So, what is a purchase order exactly, and how do they work?
Overview of Purchase Orders
A purchase order is a document stating the intent to purchase products, goods or services offered by another company. It contains detailed information about the intended purchase, including the quantity, price, date and more. Purchase orders are commonly used when a business purchases products or services from another company. The business creates and sends the vendor a purchase order. If the vendor accepts the purchase order, it creates an agreement between the two parties.
How to Create a Purchase Order
You can create a purchase order in Quickbooks in just a few easy steps. First, you’ll need to enable this feature by logging in to your Quickbooks account and choosing Edit > Preferences. From here, you can enable or disable purchase orders.
After enabling purchase orders in Quickbooks, click Vendors > Create Purchase Orders. You can then choose a template to use for the purchase order (optional). Next, click the “Vendor” drop-down menu and select the vendor from whom you are purchasing products, goods or services. If the vendor is new, you’ll need to create a new vendor. If it’s an existing vendor with whom you’ve done business in the past, you can choose the vendor’s name from the list.
Quickbooks also allows users to track purchase orders by class. If you use class tracking, you can click the “Class” drop-down menu and select the class that you want to track the purchase order. Like using a template, however, class tracking is completely optional and not required when creating or using a purchase order in Quickbooks.
Assuming you’ve followed the steps previously mentioned, you’ll need to complete the information for the line item area. When you are finished, you can then add a memo or vendor message to the purchase order in the respective fields. When finished, click “Save & Close” to complete the process.
It’s important to note that the steps listed above only apply to Quickbooks Desktop. Creating and using purchase orders in Quickbooks Online requires a different approach. You can enable purchase orders in Quickbooks Online, for instance, by logging in to your account and clicking the Gear icon > Company settings > Expenses > Purchase Orders. From here, you can click the “Use Purchase Orders box” to enable this feature.
Did this tutorial work for you? Let us know in the comments section below!