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Purchase Orders

Create purchase orders manually or let AI extract them from supplier documents. Track deliveries, match invoices, receive goods, and maintain full accounting integration.

Overview

The Purchase Orders module manages the full procurement lifecycle — from ordering inventory to receiving goods and recording costs. It supports both manual PO creation and an AI-powered workflow that extracts order details directly from supplier documents like invoices, quotations, and receipts.

Purchase orders integrate with the Trading Partner system for supplier management, the Inventory system for stock updates, and the Accounting module for journal entries on goods receipt.

Key Features

  • AI document extraction — Upload a supplier invoice or quotation and AI extracts line items, supplier details, totals, and tax information automatically
  • Smart product matching — AI matches extracted line items to your existing inventory products using similarity scoring
  • Smart supplier matching — Extracted supplier details are matched against your Trading Partners with auto-selection for high-confidence matches
  • Multi-document workflow — Link multiple documents (quotation, invoice, receipt) to a single PO and track the full document lifecycle
  • Tax-aware pricing — Handles tax-inclusive and tax-exclusive supplier pricing with automatic conversion
  • Goods receiving — Record deliveries with quantity tracking, partial receipts, and variance detection
  • Accounting integration — Goods receipt automatically creates journal entries (debit Inventory, credit Accounts Payable)
  • Order tracking — Full status workflow from draft through approval, receiving, and closure

Creating a Purchase Order

There are several ways to create purchase orders:

From a Supplier Document (AI-Powered)

Upload a supplier invoice, quotation, or receipt and let AI do the work. This is the fastest way to create accurate purchase orders.

  1. Navigate to Purchases → Create Purchase Order
  2. Upload a supplier document (PDF or image) using the document upload area
  3. AI extracts line items, supplier info, dates, and totals automatically
  4. Review the AI-matched supplier — confirm or select a different Trading Partner
  5. Review extracted line items — AI matches each to your inventory products
  6. Adjust quantities, prices, or product matches if needed
  7. Click Create Purchase Order to finalize

From Scratch

Select a supplier, add products and quantities manually. Best for one-off orders or new products.

From Reorder Suggestions

Review AI-generated suggestions based on low stock and sales patterns. One click converts suggestions to orders.

From Previous Order

Duplicate a previous order and adjust quantities. Great for regular restock orders.

Best Practice

For recurring suppliers, use the AI document upload. Over time, the system learns your supplier's document formats and product mappings, making each subsequent order faster and more accurate.

AI Document Processing

The AI extraction pipeline processes supplier documents through several stages:

1

Document Upload & Classification

The system identifies the document type (invoice, quotation, receipt, delivery note) and extracts metadata like document number and date.

2

Line Item Extraction

AI reads each line item from the document — product names, quantities, unit prices, and totals. It also detects whether prices include or exclude tax.

3

Supplier Matching

Extracted supplier details (name, tax ID, contact info) are matched against your Trading Partners. High-confidence matches are auto-selected.

4

Product Matching

Each extracted line item is matched to your inventory products using AI similarity scoring. You can review and adjust matches before creating the PO.

5

Review & Create

Review all extracted data, make adjustments, and create the PO. The original document is permanently linked to the purchase order for reference.

Order Workflow

Purchase orders follow a status workflow. The exact path depends on whether the PO was created manually or from a document:

Manual PO Workflow

  1. Draft — Order is being prepared
  2. Pending Approval — Waiting for manager approval (if required)
  3. Approved — Ready to send to supplier
  4. Sent — Order has been sent to the supplier
  5. Partially Received — Some items have arrived
  6. Received — All items have arrived
  7. Closed — Order is complete and fully invoiced

Document-Based Workflow

When a PO is created from a supplier document, the workflow includes document-specific statuses:

  1. Quotation Received — PO created from a supplier quotation
  2. Confirmed — Supplier has confirmed the order
  3. Invoice Received — Supplier invoice linked to the PO
  4. Invoice Validated — Invoice amounts verified against the PO
  5. Received — Goods received and inventory updated
  6. Closed — Order complete

Approval Workflow

Orders above a certain amount may require manager approval before being sent. Configure approval thresholds in Settings.

Multi-Document Tracking

A single purchase order can have multiple documents linked to it over its lifecycle. The Document Timeline on the PO detail page shows all linked documents:

  • Quotation — The initial supplier quote
  • Invoice — The supplier's billing document
  • Receipt — Proof of payment
  • Delivery Note — Shipping/delivery documentation

Each document shows its number, date, amount, and processing status. You can view the original uploaded document directly from the timeline.

Invoice Validation

When an invoice is linked to a PO that was created from a quotation, the system highlights any price or quantity differences between the two documents so you can catch discrepancies before approving payment.

Tax Handling

The system handles different tax presentations from suppliers:

  • Tax-inclusive prices — Common in many regions. The system back-calculates the net price for inventory valuation.
  • Tax-exclusive prices — The system adds tax to calculate the total payable amount.
  • Unknown tax treatment — When AI can't determine the tax behavior, the item is flagged for manual review.

Each line item shows its tax behavior with a confidence indicator. The Financial Summary card on the PO detail page shows the breakdown of subtotal, tax, and total amounts.

Receiving Goods

When a delivery arrives, record what was received:

  1. Open the purchase order
  2. Click Receive Goods in the workflow actions
  3. Enter quantities received for each item
  4. Note any discrepancies (damaged, missing, wrong items)
  5. Confirm to update inventory and create accounting entries

Goods receipt automatically:

  • Updates inventory stock quantities
  • Creates a journal entry (debit Inventory, credit Accounts Payable)
  • Records price variances if actual prices differ from the PO
  • Supports partial receipts — receive some items now, the rest later

Discrepancies

Always record discrepancies immediately. This creates a record for supplier disputes and helps track supplier reliability over time.

Supplier Management

Purchase orders use the unified Trading Partner system for supplier management. When creating a PO, you select a Trading Partner with the supplier role. The PO detail page displays the supplier's:

  • Company name and tax ID
  • Contact details (email, phone)
  • Address information
  • Website
  • Payment terms

See the Supplier Management documentation for details on managing Trading Partners.

PO Detail Page

The purchase order detail page shows everything about a PO in a two-column layout:

Main Content (Left)

  • Supplier Information — Full supplier contact and address details
  • Line Items — Product, ordered quantity, received quantity, unit cost, tax, and line total
  • Financial Summary — Subtotal, tax amount, and total with tax behavior indicator

Sidebar (Right)

  • Document Timeline — All linked source documents with view/download
  • Purchase Order Workflow — Visual timeline of status changes with available actions

Troubleshooting

AI extraction missed some line items

You can manually add missing line items during the review step. Ensure the uploaded document is clear and not cut off. Re-uploading a cleaner scan often improves results.

Product match is incorrect

Click on the matched product to change it. Use the search to find the correct inventory product. The system learns from your corrections over time.

Supplier not found

If the AI can't match a supplier, you can select one manually from your Trading Partners or create a new one. Go to Trading Partners to add a new supplier first.

Tax amounts seem wrong

Check each line item's tax behavior indicator. If the AI classified a tax-inclusive price as exclusive (or vice versa), you can adjust it during review. The system uses your product-specific tax rates for final calculations.

Goods receipt quantities don't match

You can record partial receipts. Enter only the quantities actually received — the PO will move to "Partially Received" status until all items arrive.