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Intuit

How to use purchase order

Purchase orders are easy to use in QuickBooks Online. With just a few steps you can complete the following tasks.

  • Enable a purchase order.
  • Enter a purchase order.
  • Apply a purchase order toward a transaction.
  • Receive or pay part of a purchase order.
  • Run purchase order reports.

What is a purchase order (PO)?

A purchase order (PO) is a document you can send to a vendor. Using a purchase order accomplishes the following:

  • It states your intent to purchase products or services from a vendor.
  • It defines the details of the purchase, such as quantities and prices.
  • If your vendor accepts your PO, it means you have an agreement with them to receive those products or services under the terms given.

FAQs Question about Purchase Orders

How do I enable a purchase order?

Note: POs are available in QuickBooks Online Plus and in older QuickBooks Online Edition products (with optional Sales package enabled).

How to check if the purchase orders feature is enabled in your company:

  1. Select the Plus icon (+) on the Toolbar, then Purchase Order.

  2. If you don’t see it, select Show more.

If you see the Purchase Orders feature listed but get the message We're sorry! Purchase Orders is turned off when you select it, you'll need to enable the feature.

How to enable the purchase orders feature:

There are two ways to enable purchase orders. Either select the Settings link, and update your setting, or follow the steps below:

  1. Select the Gear icon on the Toolbar, then Account and Settings (or Company Settings).
  2. From the left menu, select Expenses.
  3. Select the pencil icon next to purchase orders.
  4. Check the Use Purchase Orders box.
  5. (Optional) Enter titles for up to three custom fields.
  6. (Optional) Enter a Default Message on POs.
  7. Select Save, then Done.
Note: Formatting of the PO comes from the Master Sales Form Template, regardless of whichever template you have set as default. There's no way to customize purchase orders further with different content, layout and style options.

How do I enter a purchase order?

  1. Select the Plus icon (+) on the Toolbar, then Purchase Order.

  2. From the Vendor drop-down, select or add a vendor.
  3. If you are shipping a product directly to a customer, select the Ship To drop-down and choose the customer.
  4. If you're using custom fields, fill them in as needed.
  5. In the Account details and/or Item details section, enter the purchases. (Note: Only the products or services marked I purchase this product/ service from a vendor will appear in the Item details section.)
  6. Select Save and Send, Save and Close or Save and New to complete the entry.

Things to know when you enter a PO:

  • As you enter a PO, you'll see that the status is automatically set to Open. This status will be automatically changed to Closed when all quantities and/or amounts on the PO are indicated to be received and/or paid across all linked transactions.
  • You can edit an existing PO at any time to change its overall status, or the status of its individual lines.
  • When adding a PO, you can select a customer for each line item. To make these items billable to the customer(s), you must mark the Billable box after adding the PO to a vendor transaction.

How do I apply a purchase order to a transaction?

To apply a purchase order to a transaction:

  • If a PO is accepted and completed, you'll need to record a bill, a check, or Expense such as a credit card charge, or a cash transaction showing what you paid or still owed.
  • When you select a vendor on any of these transaction types, the Purchase Orders section will appear on the right hand side of the screen.
  • To add a PO to a transaction, just select Add on the purchase order displayed. The PO will be added on the first available line in the Item details or Account details section below.
  • A PO is automatically closed when all quantities and/or amounts on the purchase order are accounted for across all of its linked transactions.
  • If a PO is added to a transaction by mistake, you can remove it by selecting the Trash can icon on the line item. If this is done before saving the transaction, the PO will stay open.
  • If you save a PO to a transaction and then have to edit the transaction by deleting the PO, the PO will remain closed and must be manually changed back to Open.
  • When linking a bill, check, or expense to a PO, the date on the transaction has to be on or after the date on the PO.
  • You can't add negative line items from a PO onto a bill, check, or expense. If you'd like to record a potential refund, the best option is to record a vendor credit.

How do I receive or pay part of a purchase order?

If you're receiving a partial amount on a PO, or making a partial payment, you can add part of a PO to a transaction, and link multiple transactions to a single PO.

How to receive or pay a part of a purchase order:

  1. Select the Plus icon (+) on the Toolbar, then Bill, Check, or Expense.
  2. From the drop-down, choose or add a vendor. A PO section will appear on the right hand side of the screen.
  3. To add a PO to the transaction, select Add on the PO displayed. Details from the PO will be added on the first available line in the Item details or Account details section.
  4. Edit the quantity or amount for each line to reflect the portion that you would like to record as partially received or paid.
Note: You can link multiple transactions to a single PO. QuickBooks automatically closes a PO when all quantities and/or amounts on the PO are accounted for across all of its linked transactions. You can manually close the PO by changing its status or by manually closing individual lines on it.

How do I run a purchase order report?

QuickBooks Online has a number of reports that will help you with your purchase orders.

How to run a purchase order report:

  1. From the left menu, select Reports.
  2. From the Reports page, select Expenses and Vendors.
  3. Select any of the following reports to run or customize them:
  • Open Purchase Order List
  • Open Purchase Order Detail
  • Other Purchase Detail reports