One of the vital components to acquiring goods and services within an organization is establishing a PO Number system. A PO Number or purchase order number is an alphanumeric code assigned to a specific transaction. Using PO numbers creates a paper trail between buyer and seller, and makes it much easier to track the status of a particular transaction when both parties may have many open transactions both together and with other parties. Documenting all business transactions is vital to the success of an organization. When you order something your business needs, you want to be sure you receive it and at the agreed upon price. Thus, having a unique identifier helps avoid confusion when an invoice arrives.  The purchase order number saves time and resources when tracking down invoices and shipments.  In this article, you will learn more about the aspects and processes of a PO Number. In the end, you will learn how to create a purchase order number system for your organization. 

Purpose and Function of PO Numbers

Buyers send a purchase order to vendors or suppliers at the beginning of a transaction. The purchases are assigned a PO Number, which is usually sequential or incremented up from the last purchase order issued. This is referenced throughout the entire transaction and even included on the packing slip The purchase order number is used to reference the purchase order, which contains the list of goods or services desired by the buyer.  Other important information including desired delivery date and payment terms is often included. Hence, it gives anyone in both companies a solid reference point to track transactions.  By referencing purchase orders, a business can learn a lot about the volume and type of products ordered over time. You can analyze a company's cash flow and interpret which departments buy or sell the most, for example.

PO Number Process

The buyer always initiates the purchase order and assigns the PO number.
    • First, an employee gains approval for a purchasing request. This approval kicks off a PO Number assignment. 
    • Next, the order is placed with another company or vendor via submission of the approved purchase order. The vendor records the PO number and products or services requested. Eventually, it becomes prepped for packing and shipping. 
    • The goods or services are delivered and/or accomplished along with the invoice, which should match the purchase order. The invoice typically contains the purchase order for easy matching. 
    • Finally, with an easy-to-find PO number on a vendor’s invoice, it’s easy to expedite the payment.

How to Create a PO Number

Any business can create a purchase order template and assign a numbering system.  However, licensing an accounting and financial system will save a lot of time and effort. Purchase order number generation is within FINSYNC's cloud-based accounting software. The system auto-generates and applies a purchase order number for all purchase orders created. Then routes them for sign-off. All purchase orders are stored sequentially for easy reference. If your business does not use professional accounting software, you can create your own PO Number template. These codes must be in alphanumeric format with or without dashes. Most companies will use letter and number combinations to represent locations, vendor names, and dates. Ensure enough product or service details, so the seller quickly understands how to fulfill the request—the less back and forth, the better. 

Conclusion

It doesn't matter if you are the business or the vendor; having a purchase order number makes things easier for everyone.  On the customer side, a buyer may have an issue with an order placed five months ago. By using the PO number, tracking the service order and invoice will be much simpler.  Integrating a PO Numbering system prevents a business from having duplicate orders, incorrect filings, and other common accounting errors.  Learning all the forms and tools you need to prosper can be overwhelming when you first start a business. The best outcome is to incorporate some form of purchase order tracking system. Get an excellent handle on your small business finances straight out of the gate.   FINSYNC syncs with over 7,000 financial institutions across the country.
The Covid-19 crisis has created unprecedented opportunity to launch a virtual accounting practice. With the pandemic of Covid-19 and the Federal Government's response to an economic downturn expected to dwarf the sub-prime crisis of 2008, there has never been a better time for accounting professionals with the right skills to help get the nation back on its feet.

Tidal Wave of Applications for the SBA Paycheck Protection Program (PPP) Expected

Ask any small business owner what's on their mind in the midst of shelter-at-home, and their responses will be similar. The health of their family followed very closely by the health of their business. With shelter-at-home keeping consumers from purchasing goods and services across so many industries, unemployment rates have already skyrocketed. The CARES Act, and specifically the PPP, could not come sooner. However, not unlike the HealthCare.gov fiasco, there is already confusion about how to apply to secure the financing. With PPP, a business can secure financing that becomes a grant. As long as the business continues to pay employees in accordance with the program's requirements, the government will forgive the loan. Free money. What business owner wouldn't apply? The opportunity is fantastic, but the application process leaves a lot to be desired. The forms and documentation are so complex that a small business owner without a strong financial education has little chance of completing them correctly without assistance. An incorrect application could lead to delays in receiving the loan deposit of several weeks. Businesses who complete the form correctly the first time can have funding in as few as 2 days. A very high percentage of 30,000,000 small businesses will apply for this program in the coming weeks. That's where you come in.

The Crisis is Unprecedented, the Method of Work is Not

How do you serve small businesses in this time of need? Virtually. The market for professional services has been trending towards virtual services for some time. Business owners have used virtual services in marketing technology through publicly traded companies such as Upwork and Fiverr for quite a while. Businesses use Uber to navigate business trips. FINSYNC has developed its Services Network specifically to solve the need for professional, vetted financial assistance for US-based companies. Businesses simply request services through the app, and, based on their needs, get matched to the professional best suited to their requirements. That professional could be you.

The Tools Are Readily Available

While taking first steps into the virtual, gig-economy may seem frightening at first, it's a lot more personal than you might think. Google, Zoom and others provide free tools for video conferencing. FINSYNC service providers have access to its business software that includes Payments, Accounting, Payroll, Projects, and, most importantly in the current economic climate, Cash Flow Management. FINSYNC also makes its services portal available so that you and your new business customer can communicate virtually, with activity tracking, commenting and document management all simplified and at your fingertips.

Get Started in VIRTUAL ACCOUNTing

To get your virtual accounting career started, simply complete your 10 minute application.  There's no cost to apply or become a FINSYNC Specialist. You'll be paid via direct deposit for your work helping businesses navigate the SBA application process. You'll also have the opportunity to earn future work when normalcy returns to the economy and businesses need all your other amazing skills!
Services FinSync Quickbooks Bill.com Gusto Expensify TSheets Harvest
Payments
Bill Pay
Invoicing
Accounting
Payroll
Expense Reimbursement
Time Clock
Time Sheets
Projects
Cash Flow Management