Was this page helpful?
Thank you!

Comments or suggestions?



Enter Email Address (optional)
email

Using purchase orders to track committed costs or subcontractor bids

In QuickBooks, you can assign each line item of a purchase order to a job. This feature lets you use the purchase order to track the price the vendor originally bid for his or her phase of work. In other words, you can use the Purchase Order system to help prevent overpaying a subcontractor or materials supplier. If the subcontractor bid a certain price for a certain scope of work for a certain job, then you can enter a PO to keep track of those bids. Later, when the subcontractor submits an invoice, the invoice can be compared to the bid (PO) and a vendor bill can be automatically generated based on the original bid.

The PO tracking system helps you track payments against a multiple part draw schedule. If you enter a purchase order with multiple line items that match the draw schedule, when you receive a bill from that subcontractor QuickBooks can track how much they have billed you to date versus how much is still outstanding.

Use the Open Purchase Orders by Job report for tracking purchase orders that haven't been filled (in other words, to get a listing of all subcontractors who haven't completed or submitted bills on a project). To display this report, go to the Reports menu, choose Jobs, Time & Mileage, and click Open Purchase Orders by Job.

To create the purchase order

  1. Go to the Vendors menu and click Create Purchase Orders. Shortcut

    (You must first turn on your preference for using purchase orders. This preference also turns on inventory.)

  2. In the top part of the purchase order form, enter the Vendor, Class (materials), Vendor address, Ship To address (job site), Date, and P.O. No. See Creating a purchase order for more information.

  3. In the Item field, select the item that relates to the type of work the subcontractor will perform. For example, if you enter a PO for a framing contractor, then you would select the Framing item. You must enter multiple lines of the Framing item, one for each draw on the schedule. For example, if you are entering a two-part draw and the total bid the vendor gave you was $5,000 for rough framing and $5,000 for finish framing, then you enter two line items using the Framing item.

  4. Change the Item Description to represent what you agreed to pay the vendor by when. For example, 50% bid due upon completion of rough framing, work to start May 3 and be complete by May 15.

  5. Click in the Customer column and select the customer and the job.

  6. Make sure you enter a memo that is very descriptive so that when you receive a bill from this vendor you can easily figure out which job and which type of work this PO relates to. For example, you might enter Smith Addition, Framing Bid.

To enter the bill when you receive it from the subcontractor (and to check it against the original bid)

  1. Go to the Vendors menu and click Receive Items and Enter Bill. Shortcut

  2. Click the Vendor drop-down list and choose the appropriate vendor. You will see a message saying "Open purchase orders exist" and you will be asked if you want to receive against one of them. Click Yes.

  3. In the Open Purchase Orders window, the vendor you selected appears along with a list of the open purchase orders for that vendor. Check the appropriate purchase order. Click OK.

  4. In the Date field of the Enter Bills window, enter the date on the vendor's bill.

  5. In the Ref. No. field, enter the vendor's invoice number.

  6. In the Amount Due field, enter the amount you plan to pay the vendor (or the draw).

  7. Click the Items tab.

  8. In Qty, enter 1 for each line item that you are paying in full. If you only want to pay half of the draw, enter 0.5. It is very important that you enter a fraction in the Qty column if you aren't paying the vendor for the full bid or purchase order. If you enter 1 in Qty but are only paying a portion, the purchase order will be satisfied even though it shouldn't be.

  9. Click in the Amount column to enter the amount you're paying. The amount shown on the Items tab should be the same as the amount you're paying (in the Amount Due field). If not, adjust either the Amount Due or the Qty for an item until the amounts are the same.

  10. Click Save & Close.

KB ID# H_CONT_PO_USING_TO_TRACK_COSTS_OR_BIDS
10/23/2014 10:51:07 AM
PPRDQSSWS404 9102 Pro 2013 90f535