Purchase Orders
A formal commitment to buy. No financial impact.
A purchase order is a formal request to buy from a vendor — a documented commitment with agreed quantities and pricing. It is sent to the vendor as confirmation of intent. Critically, a purchase order creates no journal entry, no accounts payable, and no financial obligation in your books. The obligation only arises when the vendor's bill is saved.
What a PO does provide: a documented record of what was ordered, a basis for three-way matching, and visibility into open commitments through its fulfilment status.
Use Cases
| Use Case | Who | Why |
|---|---|---|
| Order raw materials from supplier | Procurement | Formal order with agreed quantities and pricing before delivery |
| Order equipment or fixed assets | Operations | Track the order and expected delivery timeline |
| Restock inventory | Procurement | Replenish trading stock from vendor — controls what quantity is ordered |
| Enforce purchasing policy | Management | Require PO approval before any spend — every bill traces to an approved PO |
Creating a Purchase Order
Navigate to: Procurement → Purchase Orders → New
Form title: "New Purchase Order"
Header Fields
| Field | Required? | Details |
|---|---|---|
| Vendor | Yes | Searchable select. The vendor you are ordering from. |
| Date | Yes | Order date. |
| Items | Yes | Item, Qty, Rate, Discount, Tax, Amount. Same table as bills. |
There are no payment terms or due date on a purchase order.
Optional Fields
Optional fields from the Fields menu: Subject, Center/Location, Project, PO Number (your internal reference), Tags, Note, Attachments, Recurring.
Form Actions
| Button | What It Does |
|---|---|
| Save | Saves the PO with its number. Status Open. No financial impact. The menu beside it offers Save & Print, Save & Duplicate and Save & New. |
| Save as Draft | Saves as a draft (D-… number). Editable. Not yet counted as an open commitment. |
Send the PO to the vendor from the detail page with More → Share.
PO Status Reference
| Status | Meaning |
|---|---|
| Draft | Being prepared. No commitment recorded. |
| Open | Saved. Nothing received or billed against it yet. |
| Partly fulfilled | Some ordered quantity is on a GRN or bill created from this PO. Remainder outstanding. |
| Fulfilled | Every ordered quantity is covered by GRNs or bills. Commitment closed. |
| Voided | Cancelled. No financial impact to reverse (POs have none). Document remains in audit trail. |
The list opens on Open by default; the Partly fulfilled, Fulfilled and Draft tabs show the rest.
Converting a Purchase Order
An open PO can be converted to the next document in the procurement cycle. Conversion pre-populates the new document with the PO's vendor, items and rates — you adjust quantities as needed.
| Convert To | When to Use | What Happens |
|---|---|---|
| Goods Received Note | Goods have arrived — you want a receipt record before the vendor bills you | Creates a GRN pre-populated with the PO items. Adjust quantities to what actually arrived. Stock on hand rises on save; no journal. |
| Bill | Skipping the GRN — service purchase, or the vendor bills on delivery | Creates a bill pre-populated with the PO items. Posts cost and AP when saved. |
How to convert: Open the PO detail page → More → Convert to → Bill or Goods Received Note. The Lifecycle panel offers the same with Create GRN and Create bill on its Goods received and Bills stages.
The PO status updates automatically from the quantities on the documents created from it:
- Some quantity covered → Partly fulfilled
- All quantity covered → Fulfilled
You can convert a single PO multiple times — for example, if a vendor ships in batches. Each conversion creates a separate GRN. The PO tracks cumulative quantities across its GRNs and bills. When all quantities are covered, it reads Fulfilled.
If your business requires that every purchase be pre-approved, set up an approval workflow for Purchase Orders in Settings → Workflows: pick approvers per level and, if you like, a minimum amount below which no approval is needed. A PO awaiting approval cannot be converted to a GRN or bill until it is approved.
Related
- The form, field by field: Creating a purchase order.
- Turning the order into a receipt or a bill: Converting a purchase order.
- Sending it to the vendor: Sharing a purchase document.
- Checking the order against what arrived and what was charged: Three-way match.