In ContactsLaw, a member can request that a purchase order (transaction number prefix PO) be forwarded to a creditor, as an alternative to the traditional approach of recording a creditor journal after an invoice has been received.

Purchase orders function in much the same way as creditor journals, in that they credit the Creditors controlled account and debit one or more expense accounts, however:

• They can only be requested for creditor contacts for which the 'allow purchase orders' option is enabled.
• They have no due date.
• The activity supports separate 'request' and 'authorise' steps.
• A document relating to the purchase order can be added independently of the final invoice.

Once requested, the transaction has no effect on account balances until it has been authorised. If accrual accounting is in effect, a GST liability is incurred at that point. If cash accounting is in effect, the Provision for GST controlled account is debited at that point.

Purchase orders must be reconciled before they become payable or appear in the aged creditors view; this occurs after the creditor issues a final invoice. They must be reconciled separately from other creditor transactions, therefore the 'pay on statement' option is not available when a purchase order is used.

See also