Purchase Order Overview
A purchase order (PO) is a document that is issued by a buyer to a seller, indicating their intention to purchase certain products or services. POs are typically used to control the purchasing of products and services from suppliers, and are then retained for record keeping.
The Purchase Order function is located as a sub item in the Procurement menu header at the project level.
This will bring up the Procurement-Purchase Order log screen, all POs created on this project will be displayed here. To create a new Purchase Order click the 'Add Purchase Order' button.
The PO template has multiple tabs; PO Header, Addresses, Terms and Conditions, & Document.
PO Header Tab
- Purchase Order Number - Is an suto numbered field, but the user can define the project specific numbering system.
- Created Date - The date the PO document was created; this can be back dated if needed.
- Taxable - Is there going to be taxes calculated on the PO
- Ordered By - Is a drop down selection screen listing off the Project Members list
- Ordered Date - Usually defaults to the date created, but this can be changed if needed.
- Tax Rate - Is defaulted from the details of the Project Summary page.
- Buyer - Is a drop down selection screen listing off the Project Members list.
- Required Date - The date the material is required on site, or delivered.
- TO - Who the PO document will be going to.
- Ship Via - is a predefined list, but the user can add more line items by selecting the + icon to the right of the drop down menu.
- Freight Cost - is a manual entry field where the shipping charges can be entered.
- Location - Is only active if the TO field is populated, it allows the user to select what branch they want to send this to.
- F.O.B. - Stands for Freight On Board, this is a predefined list but the user can add items by selecting the + icon to the right of the drop down menu.
- Payment Terms - Is a list which is populated by the user by selecting the + icon next to the drop down menu.
- Attention - Is a list of contact people associated to the company in the TO field.
- Subject - Is a brief description for what this PO is for.
PO Header Tab cont'd
- Related Quote No. - Is a manual entry optional field for a to record a possible quote.
- Requisition No. - Is a manual entry optional field for a to record a possible requisition.
- Comments - Is a manual entry field to add more details than the subject field.
- Delivery Instructions - Is a manual entry field to add more details for delivery to site.
- Ship to Address - Drop down menu has three option Select, Add New, & Shipping Main.
- Bill to Address - Drop down menu has three option Select, Add New, & Shipping Main.
Terms & Conditions tab:
By default all predefined terms and conditions are selected to appear on the printed purchase order document, the user can deselect any line items they want and also add new terms and conditions.
The document tab is a default template from TriBuild, The user can create/modify the default template to have company specific document.
- Choose Template button - Allows the user to switch between the defaulted template and a company specific one. Only a System Admin can create custom templates.
- Line Items button - Allows the user to create a bill of material list for the PO template.
When the user selects the Line Items button, they are able to add a BOM using 3 different means:
- Activity Log Items - Are spec sections which were added to the Activity Log module for the project.
- Company Log Items - Is the master list of items which every project looks at.
- Add Line Items - Allows a user to add items which are not listed in either the Activity Log or the Company Log.
Items are added to the PO BOM (purchase order bill of material) by selecting the specification numbers. This will make the Add Line Item window appear. This is the details of all line items are available here, and even allocating the item to a cost code if the budget has been setup.
When completed the user selects either the Save & Close or Save & Add Another buttons. If the user selects the Add Line Item button to create a BOM, the Add Line Item window is blank and the user can populate as much data as needed. When completed the user clicks the Save button at the bottom of the Document tab.
Email/Preview Purchase Order
There are 3 tabs :
- Purchase Order Document - Allows the user to preview the PO document before emailing it.
- Commit and Email - Allows the user to email out the PO document and close the editing process.
- Commit and Save - The recipient(s) will not be sent the Purchase Order. You must print the document and deliver it. Opening the Print Dialog will commit this Purchase Order even if you cancel the Print.
Are Purchase Orders the Same as Contracts?
When a purchase order has been submitted and accepted, that purchase order becomes a legally binding contract. So in that sense, yes – a purchase order is a contract. However, an actual contract will tend to be much more detailed than a purchase order. So when a complex transaction is in play, or when multiple purchase orders may be necessary, it would be beneficial to sign a contract as well.
Purchase orders are a great way to provide a record of purchase agreements in case a dispute arises later. Consider purchase orders as a written trail of breadcrumbs. Let’s say a delivery comes in, and the materials aren’t what was ordered or don’t meet the desired specifications. Without having a purchase order to fall back on as a reference, there’s no telling where the whole thing went wrong. With a clear purchase order in hand, it’s easy to show where the mistake was made.