Purchase order numbering

[forumuser10]

In our company, we have always issued Purchase orders with a different set of numbers depending on the supplier, I always thought this was wrong, and somewhat confusing.

Example: I order one piece of plastic from one company PO1, and then a piece of steel from another company PO1

I prefer it to be PO1, and PO2

Can someone confirm this is the correct way to do it?

Can we just change it, or will it be problematic from an accountant point of view?

We do not use any accountant program

[Crossy]

I use (for invoices) IN, 3 letter customer ID, Buddist year, a number starting at 00001

The final number increments one for each invoice so they are sequential but I can see at a glance who has been invoiced on each one without opening the file.

So I could create:-

IN-INA-57-00010

Next could be:-

IN-SRT-57-00011

YMMV of course.

[fletchsmile]

There's no right or wrong way really. It's whatever is most useful and convenient to you.

Personally, like you I prefer sequential numbering PO1, PO2 rather than restarting by supplier, but like Crossy would add additional fields

As you say though you also have to think who else uses the documents and what for. Although you don't have a system, it's likely your accountant will at least want to log in Excel. Depending on their sophistication and competency they may have already set up other functions that feed off this for various purposes, so check first before changing as you could mess up follow on automated processes in Excel

A few additional general tips:

- Given the increasing use of databases, spreadsheets etc, it does pay to give it some thought though and develop a logical system that would allow you to sort or slice and dice your data in different ways. This is particularly useful for accountants and users of management information or analysis. It's also a good idea to think about what might happen when your business grows not just where you are now.

- Start with the info you want and may need to sort by and work backwards based on your key fields you thin will be useful to you. This could include:

- Type of transaction, eg PO = purchase order; PN = purchase invoice SN = Sales Invoice etc

- Year/Month (possibly day if very big volumes), eg 1409 being Sep 2014 or 14 for 2014. (as you'll be capturing the date in another field on the document)

- Name or 3 letter code to identify, eg DTC being DTAC

- Sequential numbering - just need to think how many as a max. Number of digits will depend on how you use other fields above

etc

So you would end up with something like:

PN-NHO-14-0001 being purchase invoice for Nice Hotel in in year 2014 purchase invoice number one / 00001

PN-ABC-14-0002

PN-NHO-14-0003

PN-WER-14-0004

As an accountant in a former life myself I would want something like above as a minimum. I'd then be able to play around in Excel to show you via pivot tables, look ups etc: Total of transaction type sliced and diced by counterparty, year, number etc. This could then feed into giving you listings such as:

- list of all purchases by supplier

- list of all outstandings by supplier

- list of all payments

- actual accounts: P&L, balance sheet, etc

- lists to reconcile witholding tax, VAT and other tax returns

You can basically create a system in Excel of anything you might need for accounts or information. So good to find out if your accountant is already doing this

- Also in Thailand a 3 digit code for your counterparty/supplier/customer is very useful for linking all transactions, because Thailand typically issues: Purchase Orders, Purchase Invoices, Tax Purchase Invoice (for Purchase), Payments, i.e 4 key docs. So very useful to be able to match and reconcile that your documentation sets are complent from PO>PN>TP>PM

- Also depends on simple things like what is most natural to file the hard copies, eg by date or by counterparty. The revenue department expect meticulously filed documents

Cheers

Fletch

Edited September 19, 2014 by fletchsmile