SECRETS FOR PO SUCCESS
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Control
Issues: All About
Accountability
Clients
& Profits allows anyone in the company to write purchase
orders. Just what a staff member can and can't do with purchase
orders is determined by their access privileges, which are set
by a C&P system manager. Each staff member has his or her own
settings for:
PO dollar limit
A staff member can be limited to only adding purchase orders
up to a preset order amount. For example, junior creatives might
be limited to ordering no more than $500 at one time, while
a production manager would have a high limit to allow for large
printing orders. If a user tries to order more than their limit,
Clients & Profits will display a warning and prompt them
for a lesser amount. Users with a zero limit can't access purchase
orders at all.
Require cost amounts Anxious staffers sometimes issue
the PO before getting the vendor's quote, which leaves the accounting
department in the dark about the order's cost until the invoice
arrives -- with usually shocking results. This option, if checked,
forces a staff member to enter a cost amount before the PO can
be printed.
Can't change PO amounts
This option prevents users from editing the amounts on saved
purchase orders. It keeps people from changing amounts after
the fact, presumably after the PO was approved.
Can't delete other's POs This option prevents finger-pointing
if a PO suddenly disappears. If checked, only the staffer who
added a PO can delete it.
Approving POs Certain
staff members can be designated to approve POs. Orders that
are approved online will be printed with the approver's signature
automatically. (Not available in Clients & Profits Classic.)
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By Donna Lynn Johnson
Half of ad agencies surveyed don't use purchase orders when
they buy from vendors. What does the one half know that the
other half doesn't?
It's all about control
No one likes to give up
control, especially creatives and account executives. But
purchase orders don't just benefit the bean counters in
accounting. POs give production and account service a more
complete picture of the job's true profitability anytime
they want it. Because POs account for costs that have yet to
be billed by vendors, job reports more accurately show
amounts that have been spent -- and what budget remains.
"Without POs," says Ethan
Goller of Structural Graphics, "how else can you control
your costs?"
While most people won't argue
with writing POs for expensive purchases like printing, the
idea of issuing purchase orders to vendors for everything
the shop buys seems insane.
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But, as any good bean counter
will tell you, it's the only way to know a key value: what
the agency has committed to spend for their clients.
Purchase orders are an
integral part of running a professional agency that plans to
stay in business for the long term. Without a company-wide
purchasing system based on the shop's work flow, the risk of
expensive mistakes is too high. "Using POs," says Kim Snider
of On Fire Design, "has saved us 100 times over."
(Almost every large company
won't pay an invoice unless it has an accompanying purchase
order. This puts the burden on vendors to prove what is
being billed was what was actually ordered, and is very
effective at preventing fraud.)
Using Clients & Profits to
manage purchase orders helps control both staff members and
vendors for a very low cost. (You'll find a step-by-step
tutorial here).
Donna
Lynn Johnson is a former CFO and a leading
Clients & Profits consultant.
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