When do most AP departments require a PO?


The answer to your question depends on many different factors including your management's philosophy about purchasing controls, purchasing limits, size of each order, types of products or services ordered, and internal resources to name a few. Some companies require a PO for the purchase of certain materials used in their production process. Others require a PO when the dollar amount to be purchased is over a certain limit.

A TAPN Survey asked the opposite question -- Identify categories of purchases made without a purchase order. Under Benchmarking => Results, see Non-PO Payment Policy, or clickhere.

In the AP Tools Suite section under the topic AP Tools>AP Policy Manual Templates there is a Purchase Order Policy that provides suggested guidelines about when to use and how to use a purchase order. You can customize the policy based on your management's requirements. Click on this link to go directly to the template.

There is also another article on the site titled "Focus on the Basics to Build Good AP Practices" which provides information relating to what processes and procedures are considered desirable including expenditures that may involve using a PO. Click on this link to go directly to the template.

We also encourage you to post your question to the Messaging/Forum section of the site to get feedback directly from your peers as to how they are using a PO process in their organization. There is also a discussion in the AP General discussion forum about a person inquiring on a PO process and when to use it. Click on the link to go to the Discussion Thread

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