Purchase Orders in QuickBooks Desktop | Step-by-Step Guide

In this tutorial, we’ll walk you through the process of creating a purchase order in QuickBooks to order additional inventory items. We’ll use a glass door as an example, which we’ve previously set up as an inventory part with one item on hand. We aim to order three more to ensure we have a total of four available for future use.

Step 1: Set Up Inventory Item

1. Open QuickBooks.
2. Navigate to the Item List by selecting Lists > Item List from the menu.
3. Set Up the Inventory Item:
   • Click on “Item” at the bottom and select New.
   • Choose “Inventory Part” from the item type list.
   • Fill in the details:
     • Item Name/Number: Glass Door
     • Description: Detailed description if needed.
     • Cost: Set the cost, for example, $500.
     • Sales Price: Optional, set the price at which you sell the item.
     • COGS Account: Cost of Goods Sold.
     • Income Account: Sales of Product Income.
     • Asset Account: Inventory Asset.
     • On Hand: Set the current quantity, e.g., 1.
     • Reorder Point: Optional, set a reorder point if you want QuickBooks to alert you when stock is low.

Step 2: Create a Purchase Order

1. Navigate to Purchase Orders:
   • Go to Vendors > Create Purchase Orders.
   • Alternatively, use the Purchase Orders icon on the home screen.
2. Enter Vendor Information:
   • Vendor: Select Perry Windows and Doors from the dropdown list.
   • Class: Choose Remodel if it applies.
   • Ship To: Leave blank if shipping to your warehouse or select the client’s job site if applicable.
3. Fill in Purchase Order Details:
   • Template: Use Custom Purchase Order Template.
   • Date: Default to current date or change as needed.
   • Purchase Order Number: Auto-generated, but you can change it if necessary.
4. Add Items to the Purchase Order:
   • Item Column: Select Glass Door from the dropdown list.
   • Description: Enter any additional details, such as part number or special descriptions.
   • Quantity: Enter 3.
   • Rate: Default rate from the item setup ($500). Adjust if there’s a different price for this order.
   • Customer/Job: Leave blank if the items are for general inventory.

Step 3: Customize Purchase Order (Optional)

1. Vendor Message and Memo:
   • Vendor Message: Add any specific instructions for the vendor.
   • Memo: Add internal notes for reference.
2. Review and Total:
   • Total: QuickBooks automatically calculates the total (e.g., 3 x $500 = $1,500).

Step 4: Additional Options

1. Main Tab:
   • Find: Search for existing purchase orders.
   • New: Create a new purchase order.
   • Save: Save the current purchase order.
   • Print: Print the purchase order.
   • Email: Email the purchase order to the vendor.
   • Attach File: Attach relevant documents.
   • Create Item Receipt: To be used when the items are received.
2. Formatting Tab:
   • Spell Check: Ensure all text is correct.
   • Insert/Delete/Copy Line: Manage line items.
3. Reports Tab:
   • Open Purchase Orders: View all open purchase orders.
   • Purchase Orders by Job/Item/Vendor: Detailed reports for better tracking.

Step 5: Save and Send Purchase Order

1. Save the Purchase Order:
   • Click Save & Close or Save & New to save the purchase order.
2. Send the Purchase Order:
   • Print: Print the order and send it physically.
   • Email: Send the order via email directly from QuickBooks.

Step 6: Receiving Items into Inventory

After creating the purchase order, you will need to receive the items once they arrive. This is done through the Receive Items feature in QuickBooks. We’ll cover this process in the next section of the tutorial.

By following these steps, you can efficiently create and manage purchase orders in QuickBooks, ensuring your inventory levels are maintained accurately and effectively.