Purchase Order Overview
What is Purchase Order?
A Purchase Order (PO) is your formal commitment to buy goods or services from suppliers at agreed prices and terms. It acts as a legally binding contract that protects both parties, tracks procurement commitments, and controls your spending before bills arrive.
Who Uses This?
Purchase Team
Create and manage orders to suppliers based on approved requests
Department Heads
Track orders raised for their department needs
Warehouse Team
Receive goods against POs and update inward status
Finance Team
Match bills against POs and track payment obligations
Key Features
Order Management
- Supplier Selection: Search and select verified suppliers
- Multi-Item Orders: Add multiple items per PO
- Pricing Control: Set unit prices and negotiate discounts
- Tax Calculation: Auto-apply GST based on supplier GSTIN
- Terms & Conditions: Standard clauses for order acceptance
Tracking & Control
- Status Management: Track from Open to Fully Fulfilled
- Delivery Tracking: Monitor expected vs actual delivery dates
- Partial Fulfillment: Track bills and inward against PO quantity
- Department Linking: Allocate costs to specific departments
- Document Attachment: Store quotations and supporting files
How It Works
Typical Workflow
- Create PO: Select supplier, add items with quantities and prices
- Add Terms: Include delivery dates, payment terms, and conditions
- Submit Order: System generates PO number and sends to supplier
- Track Delivery: Monitor goods receipt against expected delivery date
- Bill Matching: When supplier bill arrives, match against PO
- Close PO: Mark as fulfilled when all items billed and received
PO Status Flow
Alternative Statuses:
- Rejected: Order cancelled before fulfillment
- Expired: PO expiry date passed without fulfillment
- In Review: Pending approval (if workflow enabled)
Tracking Metrics
| Metric | What It Shows | Where Used |
|---|---|---|
| Ordered Qty | Total quantity in PO | Items tab in PO view |
| Billed Qty | Quantity for which bill received | Bill tab showing bill numbers |
| Inward Qty | Quantity received in warehouse | GRN tab with receipt details |
| PO Value | Total order amount with taxes | PO header and summary |
Getting Started
| Task | Guide | Time Required |
|---|---|---|
| Create New PO | How to Add Purchase Order | 5-7 minutes |
| View PO Details | How to View Purchase Order | 2 minutes |
| Edit PO | How to Edit Purchase Order | 3-5 minutes |
| Track PO Status | Field Reference | 5 minutes |
Related Sections
- Suppliers - Manage supplier master before creating POs
- Purchase Request - PR to PO conversion workflow
- Bills - Record supplier invoices against POs
Quick Tips
Best Practices
Always verify supplier GST details before creating PO - ensures accurate tax calculation and ITC claims
Use reference field to track supplier's quotation number for easy cross-verification during bill matching
Set expected delivery date realistically with buffer time to avoid frequent PO amendments and supplier disputes
Need help? Contact support at support@bizconnekt.com