Intuit continues to add features to QuickBooks Online that support inventory management. The latest feature is QuickBooks Online Purchase Order partial receipts, which will help many inventory-centric businesses. Let’s take a look at how this works.
This feature is being rolled out to users over a period of time, possibly several months, so some of you may be seeing this now and others will see it later. Intuit often does this with significant new features. Beta testing can show you how the feature works with a select and limited number of users, but it can’t show you how it will affect the system with a large “load” on the servers. If they roll it out over time they can monitor how it performs with an increasing number of users. That makes good sense, but it sometimes get frustrating to people who support QuickBooks Online because you have two versions of the product in the field. QuickBooks Online doesn’t expose a “version number” to users or ProAdvisors, so we can’t always tell what version we are using.
QuickBooks Online Automation Settings
Before we get into the purchase order feature I want to talk about one of your company settings that could have a big effect on how the feature works.
In the Advanced section of your Company Settings you will find the setting “Pre-fill forms with previously entered content” in the Automation section.
This is on by default when you create a new QuickBooks Online company.
When you create a new transaction, such as a purchase order, the detail lines of that transaction will fill in with the details of the last transaction of the same type that you created. For example, if I create a purchase order for 10 widgets and 3 clips, the next time I create a purchase order for that same vendor the purchase order will be pre-filled with lines for 10 widgets and 3 clips.
If you place the same order repeatedly, this could save a lot of extra work. (That is, if I order 10 widgets from ABC corp one day, then a week later order 10 widgets from ABC corp again, then a week later do the exact same thing, this feature might make sense. If I order different things each time, it won’t be a helpful feature. If I don’t reorder often, it won’t be helpful.) However, as I’ll show below, this option might create some problems for you. Since the quantity is copied over, I fear that this will lead to overstocking of items. That is something that you want to avoid.
Personally, I would rather have this option be off by default, and have people use the Copy feature in the transaction list if they want to duplicate an order. However, that takes extra steps.
How QuickBooks Online Purchase Orders Worked Before
Let’s look at how purchase orders worked in QuickBooks Online before this update.
Here’s a purchase order that I’ve created for two items:
At a later time, I receive those items. I’ll create a Bill for those items. I could instead create a Check or Expense transaction if I wish.
When I enter the vendor for the bill, a “drawer” opens on the right side that shows the outstanding purchase orders for this vendor.
I haven’t selected that purchase order yet, but you’ll see that there already is an item detail line in the bill. That is because the pre-fill automation setting is enabled, as I mentioned earlier, and it is copying information from a prior bill. I’ll have to remove that line at some point as it isn’t a part of the purchase order.
When I click the Add link by the purchase order, the detail lines are added to the bill (lines 2 & 3 below).
Sometimes you receive all the items in a purchase order at the same time, other times you don’t. You may only receive some of the detail lines, or you may receive just a portion of the quantity ordered for a detail line. In my example, I’ve received just the “Rock Fountain” items. So I’ll delete the other two lines by clicking the trash can icon on the right.
Here’s the updated bill.
At a later date, I receive the rest of the items on that purchase order. When I go to create another bill transaction, the drawer does not open to show me that purchase order. All I get is a detail line from the prior bill due to the automation feature. Those are the items that I already received. Perhaps you are getting a feeling as to why I’m not a fan of the automation feature? What if my prior bill for this vendor had 30 detail lines? You would have to delete each one individually. Yuck.
What we are seeing is that a purchase order was only able to have one linked transaction. When we entered the bill for that first receipt, that closed the purchase order so no further receipts could be associated with it. Even though I didn’t receive all of the items.
This was a serious limitation in the prior purchase order feature. It creates a situation where you might not be able to accurately track items that haven’t been received. It makes you have to manually reenter items and quantities, which greatly increases the chances of entering inaccurate information. It makes the whole process take longer.
