iv. How to Create PO (purchase order)

A purchase order (PO) is a document a buyer sends to request goods or services, specifying items, quantity, price, and delivery terms. It is issued before delivery and acts as a contract. A bill or invoice is sent by the seller after delivery to request payment. In short, a PO is for ordering, while a bill is for paying.

Fill the following information. 

• Enter the reference number to identify the purchase order detail, or the system will automatically generate a reference number until input is provided. e.g., PO/001/2026 

• Enter the company name of the supplier’s company, e.g., Demo Supplier Trading LLC.

If you don’t find the supplier’s name, then an add new option is given in the drop-down space; click on it and then create your supplier. If you want to know about how to create a supplier, then go to the section—if you don’t find the supplier name in Bills/PO (2).

• Click on project if this order is related to a specific project. Choose an existing project given in the drop-down option. This field is optional; if you don’t want to link the purchase order to any specific project, then there is no need to fill this field. 

If you don’t find your project name, then scroll down and go to the section about “How to add a new project” (3).

• Use Project Details—Check this box to auto-fill details from the selected project. 

• Enter the purchase order date, that date the order is placed (e.g., the default is today). 

• Entering the valid date means the supplier must confirm or fulfill the PO before a specific date. After that date, it becomes invalid. After this date, the order cannot be accepted, processed, or used for delivery. 

• Enter the discount rate mentioned in the given order and apply a percentage discount to the entire PO. E.g., the discount rate is 10%. If there is not any discount, then apply 0 in the required field. 

• Enter the payment terms, which mean the number of days the PO remains valid.

• Enter the Select the currency for the quotation (e.g., AED).

How to add product in PO 

• Click and select the items from the dropdown list. e.g., any product or service. 

First, add your inventory in stock and then book any purchase order or bill against that inventory. How to add a product into inventory is explained in the Inventory module in the stock section named “How to add a product in stocks.” (1) 

• Enter the account name and choose the related accounting category.

The accounts field depends upon the item if you are going to add a specific item/service name in the item field. Then it will not show you any accounts headed in the “account” field. Just select it, and it will automatically add the item to their respective account.

OR 

Only if you choose “Others” in the “add product section” to book any revenue head while creating a quotation, proforma invoice, or sale invoice, the appropriate Chart of Accounts must be selected manually.

And if you select “others” in the item section and still don’t find your account head in the account field, to select the account code, go to the charts of accounts, click on profit and loss, and that page will allow the user to create or add a new account head in any category as per your need. 

Below picture explained you items scenario. 

• Enter a description like a brief detail of the product/service. e.g., providing financial service for 1 month. 

• Mention the unit price, the price per unit of the product. (If your item is related to service, then stay this block empty, e.g., AED 1000.) 

• Enter Quantity, the quantity of items. (We enter quantity only for products, not for service). 

• The net price would be automatically calculated. e.g., if the unit price is AED 1,000, then the cost for 100 pieces would be AED 100,000. 

• Click and select the applicable VAT rate. e.g. 5% standard 

• Automatically system would calculate VAT amount.   e.g. would be AED5000 

• “Enter Gross amount” means “Enter the total amount, including VAT,” e.g., the gross amount would be AED105000. 

• inclusive checkbox, here it works like this: in the unit price, the VAT amount is already added. Here, the system only deducts and calculates the original price of the product and the calculated VAT amount from the unit price. When you click on the inclusive button, it means the VAT amount is deducted from the total amount. And when you click Off, it means the VAT amount is included. 

• Use (-) to remove or (+) to add more product rows to add more items. 

• Enter Summary; you can also add comments or special terms for the PO in the text area provided. 

• The summary also automatically calculated your net amount, the discount applied to the overall amount before or after the VAT amount, and the total payable amount. 

• There are three options given for the signature for responsible persons. Select the authorized persons or department responsible for approving or signing the proforma PO.

• After entering all information successfully, click on save the PO and add it to your records. 

• After submitting the form, all your information will appear on the screen in a summarized form.

• In the list of suppliers, you can see all brief summaries of purchase orders will be given. You can add new purchase orders easily through the front page as well. 

By clicking on it, the user can review the details of the purchase order.

Users can even edit, delete, download, send email, create duplicates, create bills, and create GRNs on the basis of any purchase order. 

These functionalities are explained in their purchase module in the purchase order subhead.