In this video, author Jess Stratton shows how to create purchase orders for products. She also shows how to set preferred vendors to items and services, and how to drop ship items.
- In the last video, I created an estimate for a shelter service. The customer has given the go-ahead, and so, now it's time to create a purchase order, to let my vendors know that I need their business. However, before I create a purchase order, there's two things that need to be in place to make the workflow go smoothly and quickly. The first one is that the ability to create purchase orders may need to be turned on in QuickBooks. So, if you don't see it over here on the left-hand side, click Edit from the top menu, choose Preferences, click Items & Inventory, change to the Company Preferences tab, and make sure Inventory and purchase orders are active is selected.
Click the blue OK button, and now we need to tell QuickBooks that our items and services have a preferred vendor. This way, we can quickly know who we need to go to and create those purchase orders for. I'll go ahead and click on Items and Services on the right. The first thing we'll change is our shelter service. I'll go ahead an double-click on it. While we offer this shelter service, Wisdom Pet Meds doesn't actually do it ourselves. We outsource it to a local vet office called Mycat.
So, I'm going to place a check box next to This service is used in assemblies or is performed by a subcontractor or partner. In the Description on Purchase Transactions field, I can include a description. I can also include their cost to me. And I'm going to hit TAB to include an Expense Account. I could use any of the default Expense Accounts that I already have; however, I want to track how much money I'm sending Mycat. So, I'll scroll all the way up and choose Add New It is an Expense Account, and, because we're using account numbers, I'll give it one; you can ignore the number if you don't use account numbers.
In the Account Name, I'll call it Mycat Shelter Service. I'll click the blue Save & Close button, and now I have to choose a Preferred Vendor. In this case, it's Mycat, and they are already set up as a vendor, so I can select them from the list. I'll click the blue OK button, and it's telling me that I changed this account; it's asking me if I want to update existing transactions. I'll click Yes. The spelling dialogue box will always come up; however, for this course, I'm going to click Options, and turn it off so we won't get it every time.
I'll uncheck Always check spelling. I'll click OK. And, now I'll click Close. Now that we've updated that, there's one more product I'm going to update. The shelter also wanted some products in addition to our service. They wanted some organic catnip, so I'll double-click on that item. I can also put the description in Purchase Transactions. And in the Cost field, I can put their cost to me. It's already set up as a Cost of Goods Sold Account. And, here's where I can say who the Preferred Vendor is.
In this case, it's a vendor, again, that I already have set up, called Skaboo. I'll click the blue OK button, and we're all done here, so I'll click the X to close out of the Items and Services list. We've now told QuickBooks that we do want to use Purchase Orders, we've set up our items with those Preferred Vendors, so, now let's go in and create the Purchase Order. You may need to go back into your Estimate and see how many of each thing they wanted. I'll go into Estimates, and click on the Previous button to bring it back up again.
If I was using QuickBooks Premier, the process is a little bit easier. Up at the top where it says Create Invoice, I would also have a button to create a purchase order. However, since this is QuickBooks Pro, we don't have that option, and we need to create it manually. So, I'll close out of this estimate, after looking at the quantity fields. Now, I'll click Purchase Orders on the top left-hand side of the screen. In the vendor field, I'm going to choose Mycat. I can see the PO Number, I can see Vendor, and here's where I'm going to list all of my items.
I'll scroll all the way to the top and choose our shelter service. Here is where you can see the rate, and that's the rate they're charging me to do this service. We're doing it for six animals, and I can even include the customer that we're it for, which, in this case, was the Briar Animal Shelter. When it's all done, I have the same choice that I did with the estimate. I can print it, email it, or I could print it later, or email it later. In this case, I'll choose Email Later. If I was all done, I could click Save & Close at the bottom; however, I have one more to create, so I'll click Save & New.
I'll put an email address in for Mycat, and click the blue OK button. It's going to save that email for next time, so I don't need to put it in every time. To create the next vendor, I'm going to choose Skaboo. Here's where I can see that the PO number has increased. Here's the vendor. However, the Ship To address is set to me. I don't need to get the products; the products can be drop-shipped directly to the shelter. So, at the very top, where it says Drop Ship To, I'll click Briar Animal Shelter. Here's where you can see that it's updated the Ship To address.
Now, let's start listing the products. I wanted some organic catnip, the quantity was 15, and here's the rate that Skaboo was charging me for the product. There was one more thing that they needed; they also needed a dog supplement, and I didn't already put that in. But, that's okay, I can add it manually. It's telling me that I have changed the cost, and it's asking me if I want to update the item. In this case, I'm going to say No. This could be a one-time charge that they're giving me, and I can change the price on the fly, and not have it be permanently set to anything in particular.
Here's where I can see my total. Again, I could print it out later, or email it later. I can save it as a PDF file, print out a direct purchase order, or preview it. Let's click Preview so that we can see what it looks like. I'll zoom in. I can go through it all, make sure I'm happy with it, scroll all the way up and check the information out. I'll click Close when I'm happy. I'll click the Email Later checkbox. And, now I can hit Save & Close. I'll put in the email address for Skaboo, click OK.
Now we're all set to email our forms. We can send the forms later, just like we could with estimates in the previous chapter. If I click Reminders, and I click on the forms to send, I can see that it has now been increased. Here's my estimate, and here's my two purchase orders. I'll click Close because I'm not going to send them now. I'll click the X-out-of-the-Reminders box. And, we've just created some purchase orders to get the products to my customers.
- Setting up a new company file
- Working with the chart of accounts
- Adding bank accounts and credit cards
- Adding service or inventory items
- Setting up sales tax
- Adding customer, vendor, and employee profiles
- Billing customers
- Receiving payments
- Recording deposits
- Handling refunds and credits
- Paying employees
- Sharing QuickBooks with others
- Running reports