Why Purchase Orders Matter
POs turn “we thought” into “we agreed,” protecting budget, schedule, and cash flow.
- Lock unit pricing and delivery terms before work/materials
- Prevent duplicate or unauthorized buys (no PO, no pay)
- Track committed vs. actual cost by job/phase/cost code
- Provide documentation owners and auditors expect
What Every PO Should Include
Keep line items specific so receiving and billing are effortless.
- Vendor, ship-to job address, contact, and PO number
- Job, phase, and cost code for each line
- Description, quantity, unit, unit price, and extended price
- Taxes/freight, required-by date, delivery instructions
- Terms (returns, lead times), required documentation (tickets, photos)
PO Workflow That Prevents Overbilling
Use the same steps every time to avoid exceptions and delays.
- Create PO from your estimate/SOV groupings for clean coding
- Route for approval by amount thresholds (e.g., PM > $2k, Ops > $10k)
- Issue to vendor; attach PO to the job record
- Receive goods/services: capture delivery ticket, photos, quantities
- Match vendor invoice to PO + receipt; approve only matched items
- Post to accounting and mark the PO closed or partial
Approvals & Controls
Lightweight controls stop small leaks from becoming big problems.
- No PO, no pay policy for materials/equipment
- Amount-based approvals; separate creator vs. approver
- Budget checks against job/phase before issuing
- Revise the PO (or CO) for price/quantity changes—never “fix it later”
Subs, Change Orders & Stored Materials
For subcontract scope, use a subcontract or PO-style commitment tied to your SOV.
- Reference SOV lines so sub pay apps align with your billing
- Track change orders as PO revisions with new lines/rates
- Require stored-materials proof: photos, invoices, location
- Collect lien waivers with each payment application
Tie POs Into Billing & Job Costing
POs should make billing easier, not harder.
- AIA/Progress: map PO lines to SOV items; use receipts to support percent complete
- T&M: pass through materials/equipment with agreed markups; attach tickets and rate sheets
- Reconcile committed vs. actual monthly to catch variance early
KPIs & Reports
Watch a handful of metrics to keep costs under control.
- Open PO aging and partial receipts
- PO variance: invoice vs. PO price/qty
- Committed cost vs. budget by phase/trade
- On-time receipts vs. required-by dates
Common Pitfalls (and Easy Fixes)
A few habits cause most PO headaches—fix them once.
- Issuing POs after delivery → require PO before order
- Vague line descriptions → use item codes, units, and photos
- Freight/taxes not listed → add explicit lines to avoid surprises
- Miscoding → picklists for job/phase/cost code; block free-text
How Werx Fits Your PO Process
Werx centralizes job setup and documentation so POs, receipts, and vendor bills roll into clean job costs and billing.
- Build estimates and map lines to Contract Projects & SOV
- Attach POs, tickets, and photos to the project record
- Match vendor bills and sync to QuickBooks Online
- Support AIA/progress and T&M billing with solid backup
FAQs About Purchase Orders
What is a 3-way match?
It’s the control that compares the PO, the receipt/delivery ticket, and the vendor invoice. You only approve and pay for what was ordered and actually received.
Do I need POs for small buys?
Yes—use a simplified PO for anything that affects job cost. Even small purchases add up, and a PO prevents duplicate orders and price drift.
How do I handle price changes after a PO is issued?
Require a revised PO (or change order) before receiving. Don’t approve invoices that don’t match the PO; update budget and SOV if scope changes.
TL;DR Recap
- Issue POs before ordering to lock price and scope
- Use 3-way match to prevent overbilling and errors
- Map PO lines to job/phase/cost code and SOV items
- Attach tickets/photos and sync vendor bills to QuickBooks
