How to Create a Purchase Order

Learn how to order products from suppliers using purchase orders.

🎯 What You'll Learn

• Create purchase requisition
• Generate purchase order
• Send PO to supplier
• Track order status
• Receive goods (GRN)

📋 Prerequisites

• Access to Purchase module
• Suppliers configured in system
• Products set up
• Purchasing permission
• Approval workflow (if required)

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Step-by-Step Instructions

Method 1: Purchase Order from Requisition

This is the standard workflow with approval process.

Step 1: Create Purchase Requisition

1. Navigate to Purchase → Purchase Requisition
2. Click + New Requisition button
3. Fill requisition header:

Requisition No: Auto-generated (PR-2025-0001)
Date: December 15, 2025
Required By: December 25, 2025
Requested By: Your name (auto-filled)
Branch/Location: Select your branch
Department: Select department
Priority: Normal/Urgent/Critical

Step 2: Add Items to Requisition

Add Products:

1. Click + Add Item button
2. Search or select product
3. Enter details:
   • Product Name: Select from list
   • Quantity: Amount needed
   • Unit: Auto-filled from product
   • Purpose: Why you need this
   • Estimated Cost: (Optional, for budgeting)

Example:

Product: Rice (25kg bag)
Quantity: 50
Unit: Bags
Purpose: Stock replenishment - running low
Estimated Cost: ฿15,000

4. Click Add to save item
5. Repeat for all needed products

Bulk Import (Optional):

1. Click Import button
2. Download CSV template
3. Fill in Excel: Product, Quantity, Purpose
4. Upload completed file
5. Review imported items

Step 3: Add Notes & Attachments

Requisition Notes:

1. Scroll to notes section
2. Add any relevant information:
   • Urgency reason
   • Special requirements
   • Budget constraints
3. Attach documents:
   • Quotes from suppliers
   • Approval emails
   • Stock reports

Step 4: Submit for Approval

1. Review all items
2. Verify quantities
3. Click Submit for Approval
4. Select approver (if not automatic)
5. Add submission note if needed
6. Click Confirm Submit

Status Changes:

• Your Status: "Pending Approval"
• Approver receives notification
• You can still edit until approved

Step 5: Wait for Approval

Track Approval:

1. Go to Purchase → My Requisitions
2. Check status:
   • 🟡 Pending: Awaiting approval
   • 🟢 Approved: Ready for PO
   • 🔴 Rejected: See rejection reason
   • 🔵 Partially Approved: Some items approved

If Rejected:

1. Read rejection notes
2. Make necessary changes
3. Resubmit requisition

If Approved:

• Proceed to create Purchase Order
• Approved items show green checkmark

Step 6: Create Purchase Order from Approved Requisition

1. Open approved requisition
2. Click Create Purchase Order button
3. System pre-fills PO with approved items

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Method 2: Direct Purchase Order

For urgent needs or if you have direct purchasing authority.

Step 1: Create New PO

1. Navigate to Purchase → Purchase Order
2. Click + New Purchase Order
3. PO form opens

Step 2: Select Supplier

1. Click Select Supplier dropdown
2. Search existing supplier
3. Or click + New Supplier if needed

Supplier Details Auto-Fill:

• Supplier name
• Contact person
• Phone/email
• Address
• Payment terms
• Credit limit

Step 3: Fill PO Header

Required Fields:

PO Number: Auto-generated (PO-2025-0234)
Date: December 15, 2025
Delivery Date: December 25, 2025
Supplier: ABC Food Supplies Co., Ltd.
Delivery Location: Main Branch - 123 Main St
Payment Terms: Net 30 days
Currency: THB (฿)

Optional Fields:

Reference: Your internal reference
Project: If applicable
Department: Requesting department
Shipping Method: Truck/Van/Courier
Incoterms: FOB/CIF/EXW (for imports)

Step 4: Add Items to PO

Method A: Manual Entry

1. Click + Add Line Item
2. Select product from dropdown
3. Enter details:

Product: Rice 25kg
Description: Premium Jasmine Rice
Quantity: 50 bags
Unit: Bag
Unit Price: ฿300.00
Discount: 5% (if negotiated)
Tax Rate: 7% VAT
Line Total: Auto-calculated

Important Calculations:

Subtotal = Qty × Unit Price
Discount = Subtotal × Discount%
After Discount = Subtotal - Discount
Tax = After Discount × Tax Rate
Line Total = After Discount + Tax

Example:
50 bags × ฿300 = ฿15,000
Discount 5% = -฿750
Subtotal = ฿14,250
VAT 7% = ฿997.50
Total = ฿15,247.50

4. Click Save Line
5. Repeat for all products

Method B: Copy from Previous PO

1. Click Copy From button
2. Select previous PO
3. System imports items
4. Adjust quantities as needed

Method C: Import from Requisition

1. Click Import from PR
2. Select requisition(s)
3. Items auto-populate
4. Verify and adjust

Step 5: Review Order Summary

PO Summary Shows:

Items:               12 products
Total Quantity:      250 units
Subtotal:           ฿45,000.00
Discount:           -฿2,250.00 (5%)
After Discount:     ฿42,750.00
Shipping:           ฿500.00
VAT (7%):           ฿3,027.50
Grand Total:        ฿46,277.50

Verify Everything:

• ✅ Supplier correct
• ✅ Delivery date realistic
• ✅ Products accurate
• ✅ Quantities sufficient
• ✅ Prices match quotes
• ✅ Discounts applied
• ✅ Totals correct

Step 6: Add Terms & Conditions

1. Scroll to Terms & Conditions
2. Add or select standard terms:
   • Payment terms
   • Delivery terms
   • Quality standards
   • Return policy
   • Warranties

Example Terms:

- Payment: Net 30 days from invoice date
- Delivery: To main warehouse, 8 AM - 5 PM
- Quality: Must meet food safety standards
- Returns: Defective items accepted within 7 days
- Packaging: Supplier's expense
- Late Delivery: Penalty applies after delivery date

Step 7: Save and Submit PO

Save as Draft:

1. Click Save Draft if not ready
2. Can edit later
3. Not sent to supplier yet

Submit PO:

1. Click Submit button
2. Final verification prompt
3. Confirm submission
4. Status changes to "Submitted"

Step 8: Send PO to Supplier

Email PO:

1. Click Email to Supplier
2. Verify email address
3. Add CC recipients if needed
4. Customize message:

Subject: Purchase Order #PO-2025-0234

Dear [Supplier Name],

Please find attached our purchase order #PO-2025-0234 
for delivery on December 25, 2025.

Please confirm receipt and expected delivery date.

Thank you,
[Your Name]
[Company Name]

5. System attaches PDF automatically
6. Click Send

Print PO:

1. Click Print button
2. PDF generates
3. Print or save
4. Send via fax/courier if preferred

Download PO:

1. Click Download button
2. Save PDF locally
3. Forward as needed

Step 9: Await Supplier Confirmation

Supplier Actions:

1. Receives PO via email
2. Reviews order
3. Confirms acceptance
4. Provides expected delivery date

Track Status:

• 🟡 Sent: Awaiting confirmation
• 🟢 Confirmed: Supplier accepted
• 🔵 Partial: Items on backorder
• 🔴 Rejected: Supplier declined

If Changes Needed:

1. Supplier requests modifications
2. Revise PO (create amendment)
3. Resend updated PO

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Receiving Goods (GRN Process)

Step 1: Prepare for Delivery

Before Delivery Date:

1. Go to Purchase → Purchase Orders
2. Filter: Status = "Confirmed"
3. Check expected deliveries
4. Prepare receiving area
5. Assign staff to receive

Step 2: Receive Goods

When Delivery Arrives:

1. Navigate to Purchase → Goods Receipt
2. Click + New GRN
3. Select PO from list
4. GRN form opens with PO details

Step 3: Inspect & Count Items

For Each Item:

1. Physical count
2. Compare to PO quantity
3. Check quality
4. Enter in GRN:

Product: Rice 25kg
PO Quantity: 50 bags
Received Quantity: 50 bags
Accepted: 48 bags
Rejected: 2 bags (damaged packaging)
Shortage: 0 bags

Quality Check:

• ✅ Correct product
• ✅ Good condition
• ✅ Not expired
• ✅ Proper packaging
• ✅ Meets specifications

Step 4: Record Discrepancies

If Items Damaged:

1. Take photos
2. Note damage details
3. Enter rejected quantity
4. Attach photos to GRN

If Short Delivery:

1. Count carefully
2. Recount to verify
3. Record shortage
4. Note in remarks

If Over Delivery:

1. Contact supplier
2. Verify with PO
3. Accept or reject excess
4. Document decision

Step 5: Complete GRN

1. Verify all items recorded
2. Add receiving notes
3. Print delivery receipt
4. Get delivery person's signature
5. Keep copy for records
6. Click Complete GRN

GRN Status:

• ✅ Full Receipt: All items received
• ⚠️ Partial: Some items received
• 🔄 Pending: Awaiting more deliveries

Step 6: Update Inventory

Automatic Actions:

• Stock levels increase
• Inventory value updates
• Products available for sale
• Dashboard reflects changes

Step 7: Match Invoice (3-Way Matching)

When Supplier Invoice Arrives:

1. Go to Purchase → Invoice Matching
2. Select GRN
3. Compare:
   • PO (what was ordered)
   • GRN (what was received)
   • Invoice (what was charged)
4. All three should match

If Matches:

• Approve invoice for payment
• Schedule payment per terms

If Doesn't Match:

• Contact supplier
• Resolve discrepancy
• Adjust as needed

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💡 Tips & Tricks

Efficient Purchasing

✅ Bulk Orders:

• Order larger quantities for better prices
• Consider storage capacity
• Check product shelf life

✅ Regular Suppliers:

• Build relationships
• Negotiate terms
• Get priority service

✅ Forecast Demand:

• Review sales data
• Plan seasonal needs
• Avoid stockouts

Cost Savings

✅ Compare Prices:

• Get quotes from multiple suppliers
• Negotiate discounts
• Consider total cost (delivery, quality)

✅ Early Payment Discounts:

• Take advantage of 2/10 net 30
• Saves money long-term

✅ Consolidate Orders:

• Combine small orders
• Reduce delivery fees
• Minimize administrative work

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⚠️ Common Issues

Problem: PR Rejected

Common Reasons:

• Budget exceeded
• Unnecessary purchase
• Wrong specifications
• Better alternatives available

Solution:

1. Review rejection notes
2. Revise requisition
3. Provide justification
4. Resubmit

Problem: Supplier Out of Stock

Actions:

1. Ask for expected availability
2. Order partial quantity now
3. Find alternative supplier
4. Consider substitute products

Problem: Price Increased

Handling:

1. Contact supplier for explanation
2. Negotiate better price
3. Update PO with new price
4. Get approval if over budget

Problem: Delivery Delayed

Response:

1. Contact supplier immediately
2. Get new delivery date
3. Update PO
4. Find emergency supplier if critical

Problem: Wrong Items Delivered

Resolution:

1. Don't accept wrong items
2. Document discrepancy
3. Contact supplier
4. Request correct items
5. Return wrong items

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📊 Quick Reference

Purchase Order Workflow

Need Identified → PR Created → Approved → 
PO Created → Sent to Supplier → Confirmed →
Goods Delivered → GRN Created → Invoice Received →
Invoice Matched → Payment Processed

Status Meanings

Status	Meaning	Action Needed
Draft	Not submitted	Complete & submit
Pending	Awaiting approval	Wait
Approved	Ready for PO	Create PO
Sent	With supplier	Await confirmation
Confirmed	Supplier accepted	Prepare for delivery
Partial	Some items received	Track remaining
Complete	Fully received	Close PO
Cancelled	Voided	None

Required Documents

• ✅ Purchase Requisition
• ✅ Purchase Order
• ✅ Supplier Quotation
• ✅ Goods Receipt Note (GRN)
• ✅ Supplier Invoice
• ✅ Quality Inspection Report (if applicable)
• ✅ Payment Voucher

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🎯 Practice Scenario

Try This Complete Cycle:

1. Create PR:

   • 10× Rice 25kg bags
   • 5× Oil 5L bottles
   • Required by: Next week
   • Submit for approval

2. After Approval, Create PO:

   • Supplier: ABC Food Supplies
   • Delivery: Your warehouse
   • Terms: Net 30 days
   • Send to supplier

3. When Delivered, Create GRN:

   • Count items
   • Check quality
   • Record receipt
   • Complete GRN

4. Match Invoice:

   • Verify quantities
   • Check prices
   • Approve payment

Expected Result:

• Stock increased
• Inventory value updated
• Invoice ready for payment
• Supplier account updated

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Master the purchase order process to ensure smooth supply chain operations! 📦✨