Closing a Partially Shipped Purchase Order in QuickBooks

| November 23, 2009 | 11 Comments

When you create a purchase order in QuickBooks the quantity that you have on outstanding PO’s will show in several reports. If you receive a partial shipment on that PO and the remaining balance will not be shipped, you need to close the purchase order to remove the outstanding items on these reports. There have been a number of questions about this lately, so here is an article. 

How a Purchase Order Affects Inventory

In my test company I have entered a simple purchase order for a couple of parts.

image In this simple test case I don’t have any of the purchasedpart items on other PO’s, sales orders, invoices, or pending builds, so all you see is the 10 On PO in the inventory stock status by item report.

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How a Partial Receipt Affects Inventory and the Purchase Order

Now let’s enter a bill and receive some of the items. For the sake of discussion I’m going to receive just 4 of the purchasedpart item, and none of the sprocket item.

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 Here’s what the PO looks like now.

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 And here is what the inventory report shows.

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Closing the PO

The question that I see asked often is how do you cancel the unshipped items? We don’t want to see that value in the On PO column any more. There are a couple of ways of handling this.

If you want to close out just a portion of the PO, put a check in the Clsd column. This will close just that line, leaving the rest open. Note that the backordered column is now set to zero.

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The On PO column in the stock status report will no longer show a value for this item.

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If the entire PO is canceled, check the Closed box on the bottom of the form. This closes all lines so that the items don’t show on the report, and changes the status of the PO so that it won’t show on any reports as an open PO.

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Tags:

Category: Inventory

About the Author (Author Profile)

Charlie Russell is the founder of CCRSoftware. He’s been involved with the small business software industry since the mid 70’s, focusing on inventory and accounting software for small businesses. Charlie is a Certified Advanced QuickBooks ProAdvisor. Look for Charlie’s articles in the Accountex Report blog, as well as his California Wildflower Hikes blog.

Comments (11)

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  1. Topic: Recording Business Purchases with Personal Funds
    (I’ve answered this question several times on the Intuit Community Forums.)

    Thanks,

  2. Kim says:

    We currently only purchase items for a specific order by customer and therefore for the last 5 years all of our parts/items are set up as non-inventory parts but are posted to a COGS account. We don’t generally need to keep track of them other then for items that we have received at the end of a financial qtr and have not yet billed out for. This is currently manually calculated.

    We are considering changing all of our items to inventory parts in order to work better with Connectwise and Quosal. What are the consequences of doing so (how will it effect past reports) and is there a better option (such as creating all new items rather than changing the existing ones)?

    Thanks in advance!

  3. Charlie says:

    Kim, I’ll give you a very short answer at this point. In general, don’t change a non-inventory part (expensed immediately) to an inventory part (expensed when you sell it) as that will dramatically affect your finanical statements. The results are usually very bad, although there are times when you can do that. Create new inventory parts…

  4. Thank you, all I needed to know was that I could checkmark an line item to close it. The smallest things can give you a headache if you don’t know the answer. Very helpful!

  5. Heather says:

    I am trying to close out old POs that will not be received on further. Many of these open POS are old, and in some cases, the PO may have been partially received. Others may not be showing as closed, but we’ve received all of the parts against this PO. When we went to clean up the open POs and close them by selecting the “Closed” box at the bottom of the PO, something happened and all of our prior financial statements changed. Changes were in the inventory accounts and in COGS. We use Rapid Inventory in conjunction with Quickbooks.

    Do you have any idea why this error may have occurred?

  6. Charlie says:

    Heather, a PO isn’t a financial transaction so it shouldn’t affect your financials. On the surface, I would say that you need to talk to the Rapid Inventory people first, to see if their product is looking at PO’s and doing something behind the scenes. I’m not that familiar with Rapid Inventory so I can’t say if that is the root of the problem or not.

  7. Rosemary says:

    Heather, I have experienced the same thing but we do not use Rapid Inventory. I use QB without any add-ons. In most cases our items are non- inventory but some were. I closed PO’s and it changed the same accounts. I also agree with Charlie a PO should never affect financials since there is no GL posting but it did. I was on a support call for almost 5 hours and they could not figure it out as I was able to demonstrate through various reports and audit tracking this did happen. I have a lot of open PO’s and partially received PO’s since 2009 that I will not close due to this issue.
    I also have not seen a solution to this issue in any forums so if there is one please let me know. I recently upgraded to 2014 Premier and I have not tried it again.

  8. shirley says:

    two parts
    first the items that were sent , quantity stays as indicated
    on order
    however the items that were not sent ,(you 0 out the quantity
    and save the purchase order.
    Now you can receive items
    then you have to go back and put quantity back in on the items
    that were not sent.

    my question were you go back into this purchase do you;
    just received and it will only receive the items originally not
    received

    or no I have to zero out all the items that were previously
    received. to receive the few that were sent after on the same
    purchase order????

    • Charlie says:

      Shirley, I’m not sure I follow you on this. You have a PO, you do a partial receipt. You leave the unreceived items on the order, because you are going to receive them later, and later on you can receive those. Or, if you aren’t going to receive the rest, you close the PO.

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