Purchase Orders
Purchase order management in DrillerDB connects inventory tracking with procurement processes. The system helps formalize ordering processes, track outstanding orders, and coordinate receiving activities with inventory updates.
Understanding Purchase Orders
A purchase order represents a commitment to purchase specific materials from a vendor at agreed prices. Creating POs in DrillerDB documents purchasing decisions, communicates requirements to vendors, and establishes a record for verification when shipments arrive.
Purchase orders support inventory management by tracking what's been ordered but not yet received. This visibility helps prevent duplicate ordering and supports better planning around expected material arrivals.
Creating Purchase Orders
Generate purchase orders from low stock reports or create them manually when reordering needs arise. The system suggests order quantities based on minimum and maximum stock levels, though you can adjust these recommendations based on upcoming project needs or volume pricing opportunities.
When creating a PO, specify the vendor, expected delivery date, and list the items being ordered with quantities and expected prices. The system calculates order totals automatically, supporting budget verification before submitting orders to vendors.
Vendor Information
Each purchase order associates with a vendor from your contact database. Vendor records store ordering information like contact details, payment terms, and delivery preferences. Maintaining accurate vendor information streamlines the ordering process and ensures orders route to the correct recipients.
Track vendor performance by reviewing purchase order history. Identify vendors who consistently deliver on time with correct quantities versus those requiring extra follow-up or frequently shipping incorrect items.
Order Status Tracking
Purchase orders progress through several statuses including draft, submitted, partially received, and completed. Draft orders remain in progress and can be edited freely. Once submitted, orders are formally communicated to vendors and changes require coordination.
Partially received status indicates that some items from the order have arrived but others remain outstanding. This status supports situations where vendors ship items separately or where back-ordered items arrive after the initial shipment.
Receiving Materials
When shipments arrive, receiving staff verify contents against purchase orders and update inventory quantities. The receiving process links PO line items to inventory adjustment transactions, documenting that ordered materials have entered stock.
Receiving against POs provides verification that you received what you ordered at the expected prices. Discrepancies between PO quantities and received quantities trigger investigation to resolve billing issues or locate missing items.
Partial Shipments
Vendors sometimes fulfill orders across multiple shipments due to availability constraints or size limitations. DrillerDB handles partial receiving by allowing you to mark individual line items as received while others remain outstanding.
Track which items are still expected from each order to follow up appropriately with vendors. Partial receiving ensures you can update inventory for materials that have arrived without waiting for complete order fulfillment.
Purchase Order History
Maintain complete history of all purchase orders for audit purposes and spending analysis. Historical PO data supports analyzing purchasing patterns, negotiating better pricing based on volume, identifying preferred vendors based on performance, and documenting purchasing decisions for financial reviews.
Review PO history when updating inventory minimum quantities. If you consistently order the same items at the same intervals, your current minimums are probably appropriate. Irregular ordering might indicate minimum quantities need adjustment.
Budget and Spending Tracking
Purchase orders contribute to budget management by documenting committed spending before payments are made. Tracking PO totals helps ensure purchasing stays within budget constraints and identifies significant spending increases that might require budget adjustments.
Generate spending reports by vendor, category, or time period using PO data. These reports support vendor negotiations, budget planning, and cost control initiatives.
Integration with Inventory
Purchase order receiving transactions automatically update inventory quantities when using stock tracking mode. This integration ensures inventory records reflect incoming shipments promptly and maintains accuracy between what's been ordered and what's in stock.
The connection between POs and inventory also supports analyzing reorder patterns. Understanding how often you order specific items and in what quantities helps optimize order timing and sizes to balance carrying costs against ordering costs.
Cancellations and Modifications
Sometimes purchase orders need cancellation due to project changes or vendor issues. DrillerDB tracks canceled orders separately from completed ones, maintaining history while preventing confusion about what's actually expected to arrive.
Modifications to submitted orders require creating new order versions or tracking changes through notes. Coordinate all changes with vendors to ensure they fulfill the correct requirements. Documentation of changes protects against fulfillment disputes.
Working Without Purchase Orders
While purchase orders provide valuable tracking and control, they're not required to operate inventory management in DrillerDB. Companies with simpler procurement processes can order materials informally and simply perform receiving adjustments when shipments arrive.
The decision to use formal purchase orders depends on your company's size, complexity, purchasing volume, and control requirements. Start with informal receiving if your needs are simple, then add purchase orders if you identify issues with ordering visibility or control.
Future Enhancements
DrillerDB's purchase order capabilities continue to evolve based on user needs. Planned enhancements include automated reorder point calculations, vendor performance scoring, and integration with accounting systems for three-way matching between POs, receiving, and invoices.
These additions will further streamline procurement processes and strengthen connections between inventory management and financial operations.