Topic

Messages

Purchase Order Approval

I'm trying to determine how other companies go about the purchase order approval process. I currently review and approve purchase orders for print etc but after approval I get multiple requests to unlock purchase orders from production because they need to do updates. Is this something that other companies run into? Freight and alterations are what seem to cause the majority of adjustments in our case. Do you have the approving manager add the adjustments? I'm trying to streamline our processes and keep the internal controls. Thank you!

Lynnette Husted Financial Manager | BBFM

C&P User Group

Our adjustments are usually related to not including tax on P.O. Our process for approval are:

1. Client 2. Account Manager or Production Manager 3. Controller

We always have clients approve all changes.

Mike Thomas CFO Fuse Inc

We try to have our vendors include the freight in their quotes so that our original PO includes it. Alterations are done in the form of a change order to the job; thus, an additional PO is required.

Nell Stewart

Our production manger enters the purchase orders - and is responsible for any changes especially for any alterations since they are close to what was orginally requested. Our accounting department will make some changes - like for the addition of freight.

Bonnie Gray CFO Clarke Advertising & PR

Lynette,

Our production personnel are responsible for updating and managing vendor costs, according to the budget approved for a given project. They would adjust purchase order balances as need, as long as they document any change in the project diaries and on the PO and are clearly with the budget parameters.

Additionally, there are two ways to improve internal controls.

Purchase orders cannot be written if the dollar amount exceeds the budget amount allotted for that job/task. Therefore, our production personnel would need to alert project managers or senior managers before they can draft a purchase order in this case.

Also: Even though our production personnel has the power to write purchase orders, they have user-defined dollar amounts, which means our production personnel will need to get senior management or another designated authority to complete the purchase order, if the amount exceeds their limits.

Hope this helps.

MoshØ V. Simpson Operations Manager Red Tettemer

We try to do our estimates with freight and sales tax not included. So when we receive the freight and sales tax we just add it on. The client can look at the separate line item and determine if it makes sense and is reasonable. We don't do PO's for Federal Express because there are constant changes and sometimes we have a lot of back forth between the client and the agency and don't want to be locked into a set amount.

Bill Scarpa

Bill,

Just an FYI on the FedEx, if you generate your documentation on-line, you can also pull up the exact cost of the shipment at the same time. This may provide the opportunity to generate the PO for the exact amount.

Shannon Asquith Business Manager Tackett Barbaria Design Group