Purchase Order in Quick Book

SOP-FIN-042: Purchase Order Lifecycle Management (QuickBooks Online)

1. Document Control Block

• Document ID: TR-OPS-PO-042
• Effective Date: 2023-10-27
• Version: 2.1.0
• Review Cadence: Annual

2. Executive Summary & Scope

This SOP defines the standardized protocol for generating, approving, and tracking Purchase Orders (POs) within the QuickBooks Online (QBO) ecosystem. This process is mandatory for all procurement activities exceeding a $500 threshold to ensure fiscal accuracy, inventory integrity, and accurate accrual-based accounting. Scope is limited to standard inventory and service procurement; does not cover petty cash or employee reimbursement.

3. Prerequisites & Required Tools

• Software: QuickBooks Online Plus or Advanced subscription.
• Access: "Editor" or "Admin" level permissions within the QBO Purchasing module.
• External: Approved Vendor Master File (VMF) entry and signed Quote/Pro-Forma invoice from the supplier.
• Compliance: Internal Procurement Policy P-101.

4. Roles & Responsibilities (RACI)

5. Step-by-Step Procedure

Phase I: Procurement Initiation

• Log in to QBO and navigate to the + New button.
• Select Purchase Order from the Vendors column.
• Select the verified Vendor from the dropdown menu (Ensure billing/shipping addresses match the VMF).
• Input PO Date and Shipping Terms.

Phase II: Line Item Specification

• Select the Category or Item (Ensure matching GL accounts for COGS or Expense).
• Input exact Quantity and Rate per the vendor quote.
• Enter a clear Description (must include SKU or Part Number if applicable).
• Attach the source quote PDF to the "Attachments" field for audit traceability.

Phase III: Finalization and Dispatch

• Review the subtotal against the approved budget.
• Click Save and Send to dispatch via email directly from QBO.
• Record the confirmation number from the vendor in the "Memo" field.

6. Quality Assurance & Verification

• Metric Thresholds: All POs must be generated at least 48 hours prior to order placement. Variance between PO total and Vendor Invoice must be < 2%.
• Common Pitfalls: Selecting the wrong Expense Account, creating duplicate vendor profiles, or failing to "Close" a PO after full receipt.
• Audit Checklist:
  • Does the PO align with the attached quote?
  • Is the item mapped to the correct Class/Location?
  • Has the PO been transitioned to "Closed" status upon receipt of goods/services?

7. Troubleshooting FAQ

Scenario 1: The "Save and Send" email failed to deliver.

• Solution: Verify the vendor’s email address in the Vendor Center. If correct, check the QBO "Audit Log" to confirm no system-side delivery blocks. Manually download the PO as a PDF and send via the corporate email client, then append a note to the PO record citing manual delivery.

Scenario 2: The PO total exceeds the initial Quote.

• Solution: Do not process the PO. Notify the Procurement Lead to issue a Change Order. A PO must never be finalized if the cost exceeds the approved budget by > 5% without secondary authorization from Finance.

Scenario 3: PO is "Open," but the items were never received.

• Solution: Conduct a vendor reconciliation check. If the order is cancelled, update the PO status to "Closed" immediately to prevent stale encumbrances on the balance sheet. Document the cancellation reason in the "Memo" field.