Creating purchase orders in Shopify is a process that is essential in managing your storefront effectively. A purchase order (PO) is a key business document used to formally request goods or services from a supplier. As a Shopify merchant, being able to properly create, approve, and manage POs is essential to sustaining your operations.
Issued by the buyer to a seller, a PO specifies the items to be provided, the agreed upon prices, when the goods/services will be delivered, and payment terms. For any company, POs help organize the purchasing process and ensure all parties understand exactly what is being ordered and expected.
Things to include on a PO
Prior to creating a purchase order, it’s important to have an understanding of which elements are essential to include on a purchase order. Here are some important details to include:
- Supplier details: Select an existing supplier or add a new supplier for the PO
- Order items: Add products by name or SKU including price, quantity, delivery date
- Totals: Review the subtotal, additional fees like shipping or taxes as needed
- Approvals: Select an approval process for the PO if required in your settings
Creating a purchase order for your Shopify store
Creating a purchase order for your Shopify store is a simple process. For Shopify Pro users, one option for generating a purchase order is using the app Stocky. Stocky is an inventory management app that is free to all Shopify Pro users.
Here are the steps to creating a PO using Stocky:
Another option that is available for business owners using Shopify is creating purchase orders through accounting software, such as Xero, QuickBooks Online or MYOB. Utilizing these platforms means you will have all your financial documents and data all in one place and eliminates the need for using Shopify Pro.
For example, if you’re using Xero, you can create a purchase order by applying the following steps:
- Select“Purchase Orders”.
- Click on “+ New Purchase Order”.
- Fill out the purchase order fields and use drag-and-drop functionality to reorder item lines as needed.
- Click the arrow next to the“Save” button and choose a save option to save the purchase order.
- Note that the purchase order will be saved as a draft unless you submit it for approval, in which case it will be shown in the “Awaiting Approval” panel.
If you use Xero, you can use the free DocuSign + Xero integration. Once the PO is created, it is automatically synced to DocuSign. A DocuSign envelope is created and sent to the relevant contact to be approved. After it has been approved and signed in DocuSign, the status will be updated to “Approved” in Xero. The Certificate of Completion and Signed Document will also be attached as a PDF in Xero.
Processing and paying for a purchase order
Before you process and pay for a purchase order, check that you obtained all goods ordered. As items arrive, note them as received and update inventory counts. Once you’ve verified the items received you’re then able to pay suppliers via Shopify Payments or through another agreed upon payment method.
You could also integrate an inventory management system (IMS) to Shopify and your accounting software. This helps you not only keep track of your business finances but also helps track your inventory, streamlining the process and saving you time. Certain IMS will be able to automatically update your inventory data.
With efficient systems in place for the full PO lifecycle from order to payment, you gain both cost control and loyalty from customers.
Managing purchase orders efficiently
Managing purchase orders in an efficient manner is crucial for your Shopify business especially as it continues to grow. When looking at how to streamline your current PO process, it’s important to look at how your business currently manages PO’s from start to finish. During this process, you may want to consider automating this process to not only save time but also to have a reliable place to store POs past and present. This is where you can consider inventory management software (IMS) and accounting software as an option. Both are invaluable tools in keeping on top of your Shopify store needs and can open up more time for you to spend on other important tasks.
Why you should integrate Shopify with your accounting software
As a Shopify seller, you’re likely aware of the many benefits of the platform, such as the various tools and features that enhance your experience in running your store. However, Shopify does have some limitations when it comes to accounting, particularly as your business grows. This is where accounting software becomes important.
Through accounting integration, you’re able to sync data from Shopify to your accounting software. Once you start selling goods purchased from suppliers, the Amaka integration syncs this data to your accounting software, giving you real time data on all purchases and transactions. Having access to this synced data along with other valuable financial information, such as reporting and reconciliation features, is important to maintain an accurate picture of your business’ performance.
For Xero, QuickBooks Online and MYOB users, integrating with Shopify through Amaka is a simple process. Using the following steps listed below, you’ll be able to have Shopify integrated with your accounting software in a matter of minutes:
- To start using Amaka, you can either register or sign in to the Amaka dashboard.
- To begin setting up the integration, click the “New integration” button and select “Shopify + Xero” from the list of integrations. You can also choose “Shopify + Quickbooks (QBO)”, “Shopify + MYOB”, based the accounting software you use.
- You’ll need to sign in to your Shopify account by clicking the “Connect new account” button under the Shopify logo. Then, you’ll need to follow the guided authentication process to grant the necessary permissions.
- Following the same authentication process as Step 3, you’ll need to authenticate your accounting software account and click “Save + Continue”.
- To complete the integration setup, you can follow the step-by-step wizard to choose your preferred setup method, invoice breakdown, invoice format, mapping, and scheduler options.
- Once you’ve made all the necessary selections, click “Save + Continue” to finalize and activate the integration.
Key takeaways on Shopify purchase orders
Understanding the creation, handling, and payment of purchase orders (POs) in Shopify is crucial for the effective management of your store. By having an efficient PO system in place, you can keep track of your inventory levels, maintain accurate accounting records, and build stronger relationships with your suppliers. To optimize your PO processes, you can follow the recommendations provided in this article, such as using settings, reports, and integrations.