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Purchase Orders

Purchase orders (POs) are formal requests to vendors to supply goods or services at specified prices and terms.

Why Use Purchase Orders?

  • Creates formal record of what was ordered
  • Documents agreed-upon pricing
  • Tracks expected delivery dates
  • Provides accountability for purchasing
  • Required by many vendors for processing

Creating a New Purchase Order

  1. Search for Purchase Orders (Alt + Q)
  2. Click + New
  3. Fill in header information:
  4. Vendor No. - Select the vendor
  5. Order Date (usually today's date)
  6. Expected Receipt Date - When delivery is expected
  7. Posting Date - When to record receipt/invoice
  8. Add line items:
  9. Click in Lines section
  10. Enter Item No. (or description for non-inventory)
  11. Enter Quantity
  12. Enter Direct Unit Cost (price from vendor)
  13. Verify Line Amount
  14. Add multiple lines as needed
  15. Review Total Amount
  16. Click Save

Key Purchase Order Fields

Field Description
Order No. Unique PO number (auto-generated)
Vendor No. Which vendor supplies the goods
Order Date Date PO was created
Expected Receipt Date When goods should arrive
Amount Total PO value
Status Open, Released, or Partially Received

Releasing a Purchase Order

Before sending to vendor: 1. Review all information 2. Click Release in the ribbon 3. Order status changes to "Released" 4. PO is now official and ready to send

Sending PO to Vendor

  1. Open the released purchase order
  2. Click Print/Send in the ribbon
  3. Choose delivery method:
  4. Email - Sends PDF to vendor email
  5. Print - Prints physical copy
  6. Fax - If still using fax
  7. Confirm and send

Receiving Goods

When goods arrive from vendor: 1. Verify items match PO 2. See Purchase Receipts for receiving process

Modifying a Released PO

If changes needed after release: 1. Click Reopen in the ribbon 2. Make necessary changes 3. Click Release again 4. Re-send updated PO to vendor if significant changes

Partial Receipts

If vendor ships in multiple deliveries: - Receive each shipment separately - PO remains open until all quantities received - See Purchase Receipts

Canceling a Purchase Order

If order is no longer needed: 1. Open the purchase order 2. Click Delete in the ribbon 3. Confirm deletion - Note: Notify vendor if PO was already sent - Note: Cannot delete POs that have been partially received

Purchase Order Types

Stock Replenishment

  • Ordering inventory items for resale
  • Items added to inventory upon receipt

Direct Purchases

  • Items for immediate use (not inventory)
  • Examples: office supplies, services, equipment

Drop Shipments

  • Vendor ships directly to customer
  • Used for special orders

Best Practices

  • Get competitive quotes before creating POs
  • Include detailed descriptions to avoid confusion
  • Verify pricing matches vendor quote
  • Set realistic receipt dates considering lead times
  • Release and send promptly to vendors
  • Track open POs and follow up on late deliveries
  • Document special terms (shipping, warranties) in PO notes
  • Maintain PO numbering for audit trail

Common Scenarios

Scenario: Standard Inventory Purchase

  1. Create PO for stock items
  2. Release and send to vendor
  3. Receive goods when delivered
  4. Post vendor invoice when received

Scenario: Rush Order

  1. Create PO with expedited shipping
  2. Mark as priority
  3. Release and send immediately
  4. Follow up with vendor to confirm

Scenario: Blanket PO (Recurring Purchases)

  1. Create blanket purchase order for repeated items
  2. Release individual orders against blanket PO
  3. Simplifies recurring purchases

Troubleshooting

Problem: Cannot release PO Solution: Check for required fields, ensure vendor is set up properly

Problem: Need to change PO after sending to vendor Solution: Reopen, modify, release, and notify vendor of changes

Problem: Vendor says they never received PO Solution: Re-send from Business Central or contact vendor directly