Implementing the QuickBooks Purchase Order function can speed up data entry and ensure accurate job costing, because you don’t have to worry if you are selecting the correct cost code from the QuickBooks Item List; BUT knowing which Purchase Order belongs to which Vendor Bill can be quite a task – see this question from a reader.
Hi, We are a growing construction business and we have recently starting creating Purchase Orders to our Subcontractors and Materials Suppliers from our QuickBooks Estimates – this feature works great and I love it. It makes data entry so much easier and allows us to easily see if our costs are increasing without our knowledge.
We have one vendor that we buy the majority of our materials from, so we have a lot of different Purchase Orders for that vendor. My problem is, a lot of times our Subcontractors or Vendors don’t reference our Purchase Order number on their invoices, only the job – so I have a hard time figuring out which of the Purchase Orders the bill belongs to. I’ve created Excel spreadsheets for each job which lists all of the Vendors we’ve created Purchase Orders for, the Purchase Order Number, cost/Item code, the amount of the PO, when we received the bill from the Vendor, and whether or not the PO was received in full or not. This worked fairly well, for awhile, but now it’s driving me insane – I think I have spreadsheets for my spreadsheets! Is there anyway that I can get rid of my spreadsheets and track the job and cost codes for my Purchase Orders in QuickBooks?
Would appreciate any suggestions that you have. Please sign me as “Totally Frustrated!”
Hi, thanks for submitting your question.
Let me start by saying that I totally feel your pain and frustration! The Estimate to Purchase Order workflow is wonderful, but you are right the Bill to Purchase Order matching leaves a LOT to be desired. I used to deal with a very similar situation and do have a couple of tips for you.
The first tip involves using the Memo field at the bottom of the Purchase Order – by default, QuickBooks records the Estimate Number in the memo field – which isn’t so useful if you ask me, so click into the memo filed and type in a short version of the job name – followed by either the cost code or a description of what you are purchasing.
Whatever you enter in that memo field displays in the Open Purchase Order window that appears when you are in Enter Bills and Select a Vendor who has open Purchase Orders.
The Open Purchase Order window is a fixed size, meaning that you can’t resize it or make it bigger, but it can help you to more easily identify WHAT the Purchase Order was issued for and which job it belongs to.
You’ll need to edit each of your open Purchase Orders and enter the job and cost code in the memo field and then go to the Enter Bills window, select your Vendor and look at the information that is now provided in the Open Purchase Order window. You may also need to experiment with exactly what and how you enter information into the memo field of the P.O. – just so YOU can follow what is displayed in the Open Purchase Order Window. I know it took me awhile before I got it right.
So, that takes care of the figuring out which Purchase Order a Vendor Bill belongs to. Let’s tackle your desire to get rid of your Excel spreadsheets!
Let’s look at the Open Purchase Order by Job Report that’s built into QuickBooks – Reports menu –> Jobs, Time & Mileage –> Open Purchase Orders by Job; below is the Standard Report.
You may want to Customize this report to provide you with some more information. Click the Customize Report button –> on the Display tab –> click into the Columns box and scroll down the list and check Memo, click OK. Now the same information that you put in the Item Description field of the Purchase Order will display in this report as well the original Quantity, what you’ve received, the cost price, total amount and the open balance of the Purchase Order.
This will get you all of the information that you’ve been tracking in Excel – EXCEPT for when your received the bill from the Vendor. So, I hope that’s not a deal breaker. If you are happy with this report, you’ll want to memorize it so that you don’t have to customize it every time you run the report.
Again, you might need to do some cleanup on your Purchase Orders to that the Item Descriptions that appear in the Memo field are more meaningful. For example, if the Item Description just says “Site Work Equipment Rental” and you want to SEE that the piece of equipment is that you rented, edit the original Purchase Order and add the type or piece of equipment “Site Work Equipment Rental – Bobcat”.
Play around with the Memo Field and the Item Descriptions and when you are happy, it’s Bye-Bye Excel spreadsheets!
2 thoughts on “Is Managing QuickBooks Purchase Orders Driving You Insane?”
Thanks Annie 🙂
Your comments are right on target as well. Establishing a relationship with the vendors is really important, especially someone in the Vendors A/R department – after all they want to be paid! Online portals are awesome too – but not everyone has them.
Nice answer Nancy! I also recommend that you “train” the vendors. If they want your business they will learn to cooperate by faxing and emailing their invoices immediately after material has been picked up so it can be booked in QuickBooks. Establishing a relationship with one or two people at the vendor site and thanking them constantly for their cooperation can go a long way. Also, more and more vendors have online portals to keep up with your purchase orders and invoices, utilize them whenever possible.
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