A purchase order (PO) records what you have agreed to buy from a vendor before their bill arrives. It doesn't post anything to your books. When the bill comes in, you turn the PO into a purchase invoice.
Create the purchase order
1.Go to Purchases → Purchase Orders and click + New Purchase Order
2.You can also click the + next to Purchase Orders in the sidebar.
3.Leave PO No blank to have it numbered automatically, or type your own number.
4.Set the PO Date and, if you know it, the Exp. Delivery date.
5.Choose the Vendor. For a new vendor, click Create a Vendor at the bottom of the vendor list.
6.Choose the Place of Supply. Pick International for an import or a foreign vendor.
7.Enter a Ship To address or location if the goods should go somewhere specific.
8.Add the line items: Description, Unit price, Qty., HSN/SAC and GST(%). Click Add another item for more lines.
9.Add any Notes, Terms and attachments.
10.In the right-hand panel, check the Status. New orders start as Issued.
11.Click Create Purchase Order, or Save as Draft to finish it later.
Fields worth knowing
- Vendor — needed even to save a draft.
- Place of Supply — needed unless you save a draft. It decides whether lines show CGST and SGST or IGST, as on a purchase invoice.
- Line items — every line needs a description and a unit price above zero.
- Discount — use the chip above the line items to give a discount on each line or on the whole order, before or after tax.
- Deduct TDS on this order — appears when TDS is enabled for your company. Choose Order or Line item and the section. It carries over to the bill.
- Reverse Charge Applicable? — works as it does on a purchase invoice.
- Currency — choosing a foreign currency sets the place of supply to International and fills in an exchange rate.
- Project, Category, Sub Category and Client — optional tags for your reports.
If something required is missing, SmartLedger lists the problems, for example "Vendor is required" or "Line 1: Unit price is required".
What happens next
- The order appears in Purchases → Purchase Orders with its status: Draft, Issued, Billed or Cancelled.
- To send it, open the order, click Edit Purchase Order, then click Send Purchase Order. The order goes by email with its PDF attached. The icons beside the button print or download the PDF.
- To cancel an order, edit it and set Status to Cancelled.
- When the vendor's bill arrives, convert the order into a purchase invoice.
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