You Need to Order Supplies, But the Paper Trail Is a Mess
It happens to every growing business. You run out of a critical component, a vendor calls to confirm an unclear verbal order, or an unexpected charge appears on your credit card statement from a supplier. Without a formal system, managing what you’ve ordered, from whom, and for how much can quickly spiral into a time-consuming guessing game.
This is where the purchase order becomes your best friend. A purchase order (PO) is a formal document you send to a vendor to authorize a purchase. It details exactly what you want to buy, the quantity, agreed-upon price, and delivery terms. For you, it’s a record of intent. For your vendor, it’s a clear instruction to fulfill.
If you use QuickBooks, you already have a powerful tool to create, track, and manage purchase orders seamlessly within your accounting workflow. Whether you’re on QuickBooks Online or an older Desktop version, the process integrates directly with your vendors, inventory, and eventual bill payment.
Let’s walk through how to create a purchase order in QuickBooks, step by step, ensuring your procurement process is clean, professional, and accurate from the first click.
First, Set the Stage in QuickBooks
Before you create your first PO, there are a couple of quick setup steps that will save you headaches later. These ensure your purchase orders pull the correct information and look professional when sent to your vendors.
Enable the Purchase Order Feature
In QuickBooks Online, purchase orders are a standard feature. To double-check or enable them in Desktop versions, navigate to the Edit menu, select Preferences, and then click on Items & Inventory. Find the Company Preferences tab and ensure the box for “Inventory and purchase orders are active” is checked. This unlocks the purchase order forms in your menus.
Add Your Vendor Details
A purchase order needs a destination. Make sure your vendor is fully set up in your QuickBooks vendor list. Go to the Expenses or Vendors section, select “New vendor,” and fill in their business name, contact person, email address, and mailing address. Accurate vendor information here means your PO will auto-fill correctly.
Set Up Your Items or Services
Every line on a purchase order should be a tracked Item or Service in QuickBooks. This is crucial for inventory management and accurate job costing. In the Products and Services list, create items for the things you regularly order. Include a description, cost, and preferred vendor. When you select this item on a PO, most of the details will populate automatically.
Creating a Purchase Order in QuickBooks Online
The process in QuickBooks Online is streamlined and intuitive. Let’s go through the creation flow from start to finish.
Navigate to the Purchase Order Tool
From the left-hand navigation menu, click on “Expenses.” In the top menu bar of the Expenses page, you will see a button labeled “New transaction.” Click it, and from the dropdown menu that appears, select “Purchase order.” This opens a fresh, blank purchase order form.
Fill Out the Purchase Order Header
The form will prompt you for key information. Start by selecting your Vendor from the dropdown list. Once chosen, their saved mailing address will appear in the “Ship to” field. You can edit this for a one-time shipment if needed.
Next, fill in the “PO Date” (which defaults to today) and a “PO No.” QuickBooks will often suggest the next sequential number, but you can use your own numbering system. Adding a “Memo” for internal reference, like “Office Renovation Project” or “Q3 Raw Materials,” is also a good practice.
Add Line Items for Your Order
This is the core of the PO. In the table below the header, click in the “Product/Service” column. A dropdown will show your list of set-up items. Select the item you wish to order. Its description and cost will auto-populate.
Enter the Quantity you need. The “Rate” (cost per item) and “Amount” (Quantity x Rate) will calculate automatically. You can manually override the Rate if you have a special quote. To add another item, simply click on the next blank line in the table and repeat the process.
Review, Save, and Send
QuickBooks will tally the “Subtotal,” calculate any “Sales Tax” based on your vendor’s tax settings, and show a “Total” at the bottom. Review every line for accuracy.
When satisfied, click “Save and close” to store the PO in your system. To send it to the vendor, click the “More” dropdown on the saved PO and select “Send.” You can email it directly from QuickBooks, which attaches a PDF copy, or print it to mail physically.
Creating a Purchase Order in QuickBooks Desktop
The workflow in QuickBooks Desktop (Pro, Premier, or Enterprise) is similarly straightforward, though the navigation differs slightly.
Open the Create Purchase Orders Window
From the main menu bar, go to Vendors and select “Create Purchase Orders.” This opens the standard purchase order form. Alternatively, you can use the Home Page if the “Purchase Orders” icon is visible in your workflow.
Complete the Form Details
Select your Vendor from the dropdown at the top. Their information will fill in the address fields. The “Date” and “P.O. No.” fields work the same as in the Online version. You also have a “Ship To” field for specifying a delivery address different from your business address.
Enter the Items on the Order
In the item column, select from your Item list. Fill in the Quantity, and the Cost (if not pre-filled) and Amount will calculate. The “Customer:Job” field is powerful here; if this order is for a specific client project, selecting it will help with job costing later.
You can add multiple lines as needed. The form will show the “Item Description” at the bottom, which you can edit for clarity on this specific order.
Finalize and Use the Purchase Order
After checking the totals, click “Save & Close” or “Save & New” to store the PO. To use it, you typically don’t “send” it directly from QuickBooks Desktop. Instead, with the PO saved, you can print it by clicking the “Print” button on the form or via the File menu. You then email or mail the printed PDF or hard copy to your vendor.
What Happens After You Send the Purchase Order?
Creating the PO is just the beginning. Its real power is in how it connects to the rest of your accounting cycle in QuickBooks.
Receiving Items Against the PO
When the goods arrive, you don’t create a bill from scratch. In QuickBooks Online, go to the original Purchase Order. Click “More” and select “Receive items” or “Create bill.” In Desktop, go to Vendors > “Receive Items and Enter Bill.” When prompted, select “Yes” to receive against an open PO and choose the correct one.
QuickBooks will open a bill form with all the PO details already populated. You simply verify the received quantities and costs, then save the bill. This links the inventory receipt and the payable directly to the original purchase order, keeping everything tied together.
Closing the Loop
Once the entire order on a PO has been received and billed, QuickBooks will mark the purchase order as “Closed.” You can always view all your POs—open, closed, or pending—by going to the Purchase Order list or report. This gives you a perfect, real-time view of what you’ve committed to spend.
Common Troubleshooting and Best Practices
Even with a smooth system, questions arise. Here are solutions to frequent issues and tips for better PO management.
The Vendor Isn’t in My Dropdown List
You cannot select a vendor that isn’t in your Vendor list. Pause the PO creation, go add the new vendor first under Expenses or Vendors, then return to your PO and select them. It takes a minute but ensures consistency.
My Item or Service Isn’t Listed
Similarly, you need to add new products or services to your Items list before they can be selected on a PO. Take the time to set it up correctly with cost and income accounts. This extra step pays off in accurate reporting later.
How to Handle Partial Shipments
Vendors often ship partial orders. When receiving, simply adjust the “Qty” column on the bill to reflect only what arrived in that shipment. Save the bill. The PO will remain “Open” for the remaining quantity, allowing you to receive the rest later against the same PO number.
When You Need to Change or Cancel a PO
Made a mistake? Find the original purchase order in your list and open it. You can edit any detail—quantities, items, prices—as long as no items have been received against it yet. If you need to cancel it entirely, you can void it. This keeps a record of the cancelled order without affecting your accounting.
Using Purchase Orders for Non-Inventory Items
Purchase orders aren’t just for physical inventory. You can create items for “Services” or “Non-inventory Parts” to use POs for things like consulting hours, software subscriptions, or office furniture. The process is identical and provides the same audit trail for all company expenditures.
Streamline Your Ordering and Gain Control
Implementing purchase orders in QuickBooks transforms a reactive, chaotic process into a proactive, controlled one. It eliminates order confusion, provides a clear audit trail for every dollar committed, and seamlessly connects your ordering to your inventory and accounts payable.
Start with your next order. Instead of a phone call or a scribbled email, take two minutes to create a formal PO in QuickBooks. Send it to your vendor. When the shipment arrives, use the “Receive against PO” function. You’ll immediately feel the difference in clarity and control.
The few extra clicks upfront save countless hours of reconciliation, questioning, and frustration later. Your vendors will appreciate the professionalism, your bookkeeper will love the clean records, and you’ll have a precise, real-time picture of your company’s financial commitments.
