Accounting For Ecommerce – Use Purchase Orders In QuickBooks Online

I encourage my eCommerce clients to use Purchase Orders in QuickBooks Online because it is critical to managing inventory properly. If you enter a bill immediately when you order the inventory, those items will show up in inventory. That will cause us to show inventory that we don’t actually have in stock yet.

This can cause a lot of problems, and lead to angry customers.

Purchase orders allow us to track what we’ve ordered without impacting inventory.

How to Use Purchase Orders in QuickBooks Online – It’s About The Process

If you are an eCommerce business and you order from many suppliers, you will be interested in this workflow.

My client has enters all purchase orders in QuickBooks Online with all of the inventory parts they ordered. They are in a much better position to know and enter this information.

When the bills are received, I have my clients forward all bills into Billbeez. Each Billbeez account gets a dedicated email for the purpose of sending bills in. This works no matter what.

When my client sends the bill to Billbeez that bill will sync to QuickBooks Online. The bill will be booked to an expense account called “Other Billbeez.”

Once per week or more I go through those bills in “Other Billbeez.”

I look up the bills in Billbeez to get the PO number. Then I can match the bills to the Purchase Orders in QuickBooks Online. This is a memorized report grouped by vendor, so it’s easy to see what is there.

When you match the bill to the PO, that bill will now reflect the inventory items received.

This process is clean and efficient.

Why this is efficient?
I don’t need to communicate with my client, because I’ve built a process that eliminates the need. We can see exactly how to match the bills to the PO’s. Normally this would take at least two emails back and forth for each PO. This is especially true when in many cases the amounts won’t match up 100%.

This saves a ton of time.

My job here is easy and the inventory is accurate. I am not entering the bill (and receiving the inventory in QuickBooks Online) until my client receives the bill.

Partial Receipts on Purchase Orders in QuickBooks Online

When you match a PO to a bill, it will add the entire PO. If that is not what you received, the total will not match. Adjust the quantities of the items to match what was on the bill. If your bill shows lower quantities than what was on the PO for an item, it will leave the PO open for the remaining items.

Purchase orders in QuickBooks Online are not hard to use. It’s more about your process and how you use them.

When used properly purchase orders in QuickBooks online will help ensure that you have a process for keeping your inventory accurate.

Closing out Purchase Orders in QuickBooks Online

If you will ultimately not receive all of the items in your purchase order, then you can close it out by checking off closed on the form.

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