Transcript Slide 1

How does this thing work, anyway?
This presentation is intended to
make filling out a Purchase Order
easier; however, some may find
it difficult to maneuver around
all that glitters, so here are a few
pointers:
–The show will automatically advance;
however, if you would like to stop it at
any time, just hit Enter. If you want
outta here, hit the aptly named Escape
button.
Let’s get to know our PO, shall we?
A Purchase Order, or PO, is
typically used when placing an
order for goods or services; a
PO is also used whenever a
check must accompany the
order (supporting
documentation must
accompany the requisition in
order to issue a check).
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Paint By Numbers…again
As with the Accounts Payable
PowerPoint Show, we will do the
numbers thing here with Purchase
Orders. That means this tutorial
will take you through the 17 steps
required to birth a PO, step-bystep—no more guessing! It’s really
very simple.
Come, join the fun!
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1. Check Boxes Galore
This is where you tell
the Business Office
whether or not a check
needs to accompany the
order. If nothing is
checked, a PO is
manufactured as if a
check does NOT need
to be issued.
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2. Requisition Date
Today’s date.
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3. Vendor Information
Enter the vendor
name and address
where the order is to
be sent. A full
physical address is
needed for, among
others, auditing
purposes.
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Item No.
This is too often a confusing
step—but it wasn’t designed that
way. This may surprise you, but
this is NOT where you want to
put your product number (put
your product number in the
Description); this is simply where
you number your items
consecutively, i.e. 1, 2, 3. People
tend to want to make more of it
than it needs to be, thinking that
they need to fit their twelve-digit
product number in this teenieweenie space, and cursing the
dolt who designed the form.
Well, let the dolt put your mind
at ease and simplify things for
you: 1,2,3—those are the only
numbers that belong here.
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4. Description—Part I
Note the sentence above
Description—the sentence telling
you to use the “EXTRA SHEET” if
ordering more than three items.
This is quite possibly the most
misunderstood dogma in all
accounting lore. This sentence
simply means this: If you have
more than three (3) items to order,
write the words, “See attached” in
the Description and simply attach a
second page (the EXTRA SHEET
does nicely, but any sheet will do).
The reason for this: crowding all
kinds of items in a small space does
not a legible Purchase Order make.
If I had a nickel for every PO that
had three items on Page 1 and two
items on Page 2, I wouldn’t be
rich—I’d be filthy rich. So rich you
wouldn’t be able to stand me.
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4. Description—Part II
As I was saying, I’d be so
rich I wouldn’t have to
put together PowerPoint
presentations on how to
fill out Purchase Orders
for a living. But that not
withstanding, suffice it to
say and nevertheless, if
you have 4 items, just
write “See attached” and
attach the EXTRA SHEET
or a reasonable facsimile.
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5. Quantity
Obvious, mayhaps, but
tricky, also. (That’s how you get
four commas in a five-word sentence.)
Okay, if you’re getting
one item, put 1 in Qty; if
you’re getting a
measurement of one item
(eg. 10ml of an item that
comes in a bottle), put 1
in Qty and 10ml in
Description. We’ll deal
with the whole Unit issue
next.
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6. Unit
A typical unit: EACH. It can be
as exotic as PKG, or BOX, or
CS, but usually, it’s just EACH.
Pop Quiz:
Q: If you were getting 10ml of
something the comes out of a
bottle, would you put “Bottle”
or “Each” in Unit?
A: Each.
Rule of Thumb:
If you’ve got a measurement of
anything, put it in the
Description, not the Unit.
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7. Unit Price
If Unit Price isn’t clear
enough, think of it as
price/unit.
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8. Amount
Qty x Price = Amount
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9. Ordering on Page 2
May I refer you to 4.
Description—Parts 1 & 2.
Short Form:
put “SEE ATTACHED” in
the ITEM field and
NOTHING MORE
and record ALL your
items on Page 2.
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10. Requisition Total
Amount
+ Amount
+ Amount
Requisition Total
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11. Cost Center/WBS
This is where you will
list the Cost
Center/WBS budget
codes from which you
intend to pay the PO.
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12. Amount
This is where you list
how much money you
would like taken out
of each CC/WBS.
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13. “PURCHASING OFFICE USE ONLY”
Enter a brief
description of the item
here.
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14. Purchase Order Total
Enter total amount of
Purchase Order here.
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15. Quotations Received From
Any PO over $2,500
needs to have bids from
two additional vendors.
The vendor names and
bid amounts are listed
here and documentation
can be attached but it can
also be kept in your files,
in which case, make a
notation of that on the
PO so we know where to
send the auditor.
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16. Requested By
The person making
the request signs here.
This person becomes
the SHIP TO once the
PO is created.
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17. Approved By
The fund controller(s)
signs here.
This person becomes
the BILL TO once the
PO is created.
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“Then what happens?” you ask.
I’m glad you asked.
When a PO is born, 5 clones (or “copies”) are made—
each with its own unique color and purpose. The white
copy goes directly to the vendor; the blue and yellow
copies remain in A/P custody (for reasons we don’t need
to get into here) and the pink and gold copies get sent to
the BILL TO. The BILL TO, if you will remember, is the
fund controller. Here’s what you need to remember
about this conversation: No matter who does the
ordering, it is always the BILL TO who gets the pink and
gold copies. Theoretically, the vendor will be sending the
invoice to the BILL TO, however, if you, as the SHIP TO,
receive the invoice, get it over to the BILL TO so it can be
submitted for payment. Hurry, they’re waiting. But
before you rush off, there’s more. Oh, yes, there’s
more…
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More…
On the subject of paying Purchase Orders:
For you fund controllers out there, once
you receive word the merchandise was
received in good order, you need to
approve the payment by making some
kind of “Okay to pay” notation
anywhere on the pink copy. Attach the
ORIGINAL invoice to said pink copy and
send to the Business Office.
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There, now.
You’re done.
Still plagued with questions,
concerns or critiques? Contact
Accounts Payable. The helpful
women who run the place would
be more than happy to assist
your every Purchase Order need.
Be prepared to take a number.