WORKING SMARTER EVERY
DAY
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5 Great Tips for
Closing & Reconciling Your POs
While
Clients & Profits automatically reconciles
purchase orders with vendor invoices, some POs will
need special attention. These five tips offer
useful suggestions for these unique
situations:
Tip #1
- All POs always need cost amounts POs keep
their open balance until reconciled with an A/P
invoice. If the net cost amounts of the A/P invoice
and the PO match exactly, the PO closes
automatically. If a PO doesn't have a cost amount,
you can still enter the vendor's invoice but the
purchase order won't get closed automatically.
Instead, you'll need to click the Closed checkbox
in the Purchase Order window.
Tip #2
- Look for discrepancies If there's a
discrepancy (even a penny) between the PO and the
vendor's invoice, the PO will remain open with a
balance. This is meant to call attention to the PO
in case it is only partially billed by the vendor
and another invoice is to follow. The Over/Under
Orders report lists these kinds of purchase
orders.
Tip #3 - Manually close completed POs If a
PO has a balance but is completely invoiced by the
vendor, then close it manually by clicking on the
"closed" checkbox in the PO window.
Tip #4 - Investigate POs with negative
balances A negative balance means the vendor billed
you for more than the order amount. Purchase orders
remain open if they have a negative balance in
order to flag those orders that were overcharged by
the vendor. Together these POs will help identify
vendors who consistently overcharge you.
Tip #5 - Close many POs at once The Update
Status window lists all purchase orders that have a
balance, including negative balances. To manually
close many POs at once, click the "close" checkbox
for each order you wish to close, then click Save.
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By Bonnie Burlew
For improved cash flow, prebilling is the way to go. If your
clients are a little slow to pay, it makes good financial
sense to not wait for the vendor's invoice to come in to
bill your clients. After all, your shop is not your client's
bank!
"We prebill everything we can," says Wendy Tricarico of
Shipley Associates. "And if we can't prebill something
completely, we'll prebill 50%. It's so easy to do with
Clients & Profits."
Once the PO is entered, you can immediately create an A/R
invoice for it. And there are a variety of billing
options.
If it's a PO for a large dollar amount, it's worthy of its
own invoice. Generate it directly from the PO file by
prebilling the PO with no rekeying of details. Then, go to
the A/R file to proof, post and print the invoice. Send it
to your client immediately.
If it's something you wish to bill along with
costs (hard costs) from the job, then choose the A/R file to
add a Progress/Final Billing invoice. This invoice type can
combine POs (BOs and IOs, too), costs and even a job's
change orders.
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Regardless of how you bill your POs, from a client's
perspective, they won't be able to tell that you are not
actually billing hard costs.
However, it's a very good idea to include the concept of
prebilling, especially for big ticket items, on your
clients' contracts. If you can't do this for existing
clients, make sure you do for every new client.
With the costly work that's done outside your shop on your
clients' behalf, being able to prebill, especially for the
big ticket items like printing, can make a big difference in
your cash flow and the financial health of your
business.
Bonnie
Burlew is a senior member of the Clients &
Profits Helpdesk
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