QuickBooks for Windows: Purchase orders
With QuickBooks for Windows and PayMaker, purchase orders are managed in QuickBooks. To pay the bill for a purchase order in PayMaker, follow the steps below to ensure your workflow process is correctly managed.
- Create an Other Asset account labeled “PO Clearing”
- Create an Other Charge Item labeled “PO Clearing” tied to “PO Clearing” Other Asset Account to use for all your purchase orders
- In QuickBooks for Windows, create the purchase order
- The purchase order itself is created in QuickBooks for Windows and sent to the vendor to fulfill the inventory order
- A debit posts to the items recorded in QuickBooks for Windows for the price paid (total amount equals the item receipt)
- When the inventory items from the purchase order arrives, create an item receipt in QuickBooks
- Zero out the receipt by adding a credit for the “PO Clearing” charge item as a reverse amount for the total
- Vendors send an invoice for shipped goods with the purchase order slip
- This second half of a purchase order is the "item receipt", acts as an Invoice to be paid by the recipient upon receipt of the inventory items
- Zeroing out the receipt will Debit the Inventory Asset, and Credit the “PO Clearing” charge item
- Send the receipt to your PayMaker account (email, fax, or upload)
- In PayMaker, enter the receipt as a bill
- Enter the total amount of the receipt to your “PO Clearing” charge item
- The item receipt is sent to PayMaker as a bill for the amount of the zero'ed out Item Receipt
- The “PO Clearing” charge item is used as the expense account and when paid as normal, the Inventory debits and credits match against the Purchase Order Debits and Credits, allowing for reconciliation for the item cost
- This will result in a Credit to your Accounts Payable, and Debit to “PO Clearing” other charge item
How it works
A purchase order is a statement for intent to buy, prior to actual purchase.
- This type of contract authorizes an order from the vendor, before the vendor has received or charged the client for the order
- The expense of the payable bill can be recognized as an account payable upon receipt of said inventory
- Inventory quantities can also be recognized upon receipt of the invoice to account for the total items received, and total cost of purchase
- On the balance sheet, items from purchase orders appear as inventory, and payable bills for items appear as liabilities
Things to know
Customers using Purchase Orders and job costing: This workaround will not work for the Jobs Estimates vs. Actuals Details report in QuickBooks for Windows. The report will only show the PO clearing item created in this workaround instead of the item that would be listed on Item Receipts used to receive inventory.
If you do not see the described feature available in PayMaker, you may not have access to the feature based on permissions for your role and/or your plan does not have this feature. If you wish to get access to the feature, please review the available plans for PayMaker and upgrade accordingly or contact the Administrator of your PayMaker account. Changes in monthly user fees may apply.