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Controlling Costs With QuickBooks’ Purchase Order Management

Learn how purchase order management can increase speed, accuracy, and control for any small business in this video lesson by BuildYourNumbers.com


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Preview of Controlling Costs with Purchase Order Management

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Controlling Costs with Purchase Orders (2140/Level 2)

Approximately 84 minutes:

Highlights From Controlling Costs with Purchase Orders

  1. 11 Reasons why *SMBs DON’T use QuickBooks Purchase Orders
    …..(*Small and medium businesses)
    …..
  2. How Purchase Orders can make a BIG difference in your business:
    • PM3
    • 5 ways to create cost savings & value adds
    • 15 ways sellers and buyers can clarify transactions
    • Avoiding big problems
    • Defining the purchasing process
    • 6 ways that things can go wrong
    • Using Purchase Orders to establish ‘what happens’ if they do?
    • Developing your (legal) terms and conditions
    • Reducing paperwork associated with Purchase Orders
    • Reference article
      …..
  3. Achieving Speed, Accuracy & Control with QuickBooks Purchase Orders
    • Speed
      √  How to create Purchase Order “take offs” from an Estimate
      √  Example:  Creating a Purchase Order based on an Estimate
      √  How to automatically convert Purchase Orders into Bills
    • Accuracy
      √  3 ways that PO’s increase accuracy (& save even more time)
      …..when you enter Bills
    • Control – when the Bill doesn’t agree with the Purchase Order…
      √  Internal issues
      √  Vendor issues
      √  Responsibility for resolving problems
      …..
  4. QuickBooks techniques to handle special situations
    • Changes in quantity delivered
    • Multiple Bills from a single vendor –2 options to:
      √  Track remaining balances
      √  Eliminate overpayments
      √  Discover unrecorded Change Orders
    • How to duplicate Purchase Orders
    • Creating Purchase Orders for recurring jobs
      ..(step-by-step instructions for automating a large portion of the entry process)
      …..
  5. QuickBooks Purchase Order reports – useful applications
    …..
  6. Can you use Purchase Orders to accelerate cash flow?  Here’s how…
    …..
  7. Just getting started with Purchase Orders?  (“Real-life” insights.)
    …..
  8. Expect these 7 positive results when you begin to use PO’s…


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Controlling Costs with Purchase Orders (2140/Level 2)

Diane Gilson: Welcome, this is Diane Gilson and today we’re talking about speed, accuracy and control using your purchase orders. So, the one thing that I thought about where is it that you would want speed, accuracy and control in the rest of your life, and that would be if you’re out driving a race car. Now I haven’t done a lot of that race car driving, but I’ll tell you what, if I was in one I would want all of those things in place,… probably accuracy and control first and then I’d go for the speed.  It seemed like a good analogy at the time when I put this together.

So, okay we’ll go on and today what we’re going to be talking about is why we don’t, and why we should, use purchase orders and how to get speed accuracy and control with purchase orders within QuickBooks. We’ll be looking at purchase order reports, faster cash flow using purchase orders, and purchase orders in real life. We’re going to be talking about some special techniques for special situations and what kinds of results should we expect to see if we’re using purchase orders.  So, we’ll go ahead and get started on that.

We’re going to look at our hand-out for today, and again in the hand-out I have gone ahead and included screenshots.  I will flip back and forth into QuickBooks as we go along as well, but in the hand outs you’ll see the bigger screenshots and some reminders of how to get to various places within QuickBooks.

So there are a lot of reasons why mid-sized and smaller companies don’t use purchase orders in QuickBooks.  Of course anybody who is a larger company, and is handling a lot of materials probably has transitioned over to the P.O. side. But, if you haven’t, let’s just talk about why we see quite often that companies are NOT using the P.O.’s.:

  • First of all they might not know that it’s available in QuickBooks or even have the feature turned on.  It’s not unusual for me to find out that people say, “Oh, well I didn’t know we could do purchase orders in QuickBooks.”  So, in the event that you don’t have that feature turned on you can double check and see.
    …..
    You go up into ‘edit’.  We’re going into that preferences screen, then we’re going to go to the company preferences and you’ll look at the items in inventory area, under the preferences and you’ll want to click on this box that says inventory and purchase orders are active. Now, if you don’t deal with inventory it’s not going to hurt anything – but this is the way you get those purchase orders turned on.
    …..
    Advanced inventory is something I’ll mention again a bit later; you’re seeing it here because I’m working with Enterprise and that is an option starting with Enterprise 2011 and so I’ve clicked that on because I wanted to play with it a bit.  So you may see some things that relate to advanced inventory as we progress. But, that’s where you turn on your purchase orders feature and once you’ve turned that on, you’ll be able to see the icon out here on your front screen, up here in this upper left hand corner.Okay, so in some cases people just haven’t used them before and they don’t really know why they should or how to use them so of course we’re going to cure that problem today.
  • Sometimes people say, well we don’t buy much in the way of materials or we don’t sub-contract out a lot and we just have typical office supplies and a few fixed assets. And I’d say that’s one of the only really valid reasons that I can think of that you might not want to use purchase orders.  So, depending upon what type of business you’re running, then that might apply. But, if you’re in construction or manufacturing or a service business where you’ve got sub-contractors and materials coming and going – and any kind of volume through the business – that probably doesn’t hold water.
    …..
    Maybe people don’t want to take the time to get quotes or bids and just say “Let’s just get this stuff and do it!”.  And that may be appropriate for smaller jobs but as soon as you start getting into any quantity or volume I think you’ll see that there are a lot of great reasons to be using P.O.’s.
    …..
  • Or “We got the bid from the supplier, that’s enough.”   I got a quote from the supplier, well what we’ll talk about is that, that may be great for the supplier who’s given you the bid, but purchase orders could do a lot to protect you as a purchaser, and we’ll talk about that.
    …..
  • Or “Too much bother and paperwork…”  We’re going to be talking about how you can probably scale back on the amount of paper work that’s involved and still have a good and effective purchase order system.
    …..
  • Another thing that comes up is “You know, I worked for a company that used P.O.’s.  It was a big problem – you know that we had to take care of every nickel and dime, and I don’t want to impose that on my people.  It just takes too long.  And keeps us from getting our job done.”  I think that people who are saying that might have come out of a system that was carried too far…….