Four main differences in handling purchase order numbers

Four main differences in handling purchase order numbers

Purchase order numbers seem to be a simple subject. A PO number, which is typically defined by the buyer, uniquely identifies a purchase order. The buyer matches the PO number from an invoice against the purchase order. However, as we have learned from our clients over the years, the procedures for PO numbering vary significantly.

1. Purchase order numbers for each department

Most agree that PO numbers should be unique. A buyer should never have two purchase orders assigned to the same number. Further, a buyer should never be in a situation where a purchase order gets lost because of a gap in the ascending numbering. However, in some industries, gaps in PO numbering are intentional and accepted. For instance, the entertainment industry used to distribute purchase order IDs (e.g. 1-2000) to department 1 and (e.g. 2001-4000) to department 2. If a department did not use all purchase orders, then there would be an automatic gap in numbering. The only way to resolve such an issue is to implement a policy whereby unused POs are returned to the issuer at the end of a show.

Fortunately, electronic purchase order software can resolve this issue. By using an algorithm to prevent duplicates, a digital purchase order system can assign PO IDs consecutively regardless of the department allocation.

2. Purchase order numbers for multiple offices

Another issue occurs with handling Purchase Order IDs across multiple offices within the same corporation. Frequently, independent PO ID circles are needed for each location. However, if all offices start with the same purchase order ID, they still encounter the problem of identical purchase order numbers. One resolution is to assign different start numbers for each location. Another solution is to add a unique prefix for each location.

3. Amendment of a purchase order

Another question concerns how to handle amendments to purchase orders. If an order requires changes, a buyer doesn’t want to loose the initially assigned PO ID. Good Purchase Order Software Solutions easily take care of that. Once an amendment has been finalized, the PO number remains the same but gets a revision number as a supplement. In this way, both the buyer and the vendor can continue using the same purchase order number.

4. Local Differences

One might not think to consider local differences in purchasing. Some regions require that PO numbers be hidden until final approval, while others expose purchase order IDs immediately after a PO has been created.

Depending on the business or organization, requirements about the structure of PO numbers differ. Some of our clients require a certain number of digits, while others simply start with the number 1.

In conclusion, this topic is more complex than one might think. However, these issues are not problematic when employing electronic purchase order systems with customizable options.


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