#291 // Sunday Skool “Purchase Orders”

Welcome to this Barkey Coach podcast. This platform was built by Sparky's force Barkeys. We simply exist to make business owners more profitable, business is more profitable and more predictable. So we want to work with people that work hard because we love working hard too, that works smart because you've got to be on top of the business. People that are kind because no one likes a dickhead. Am I right? People who want results because that's what we're here for right? And people who want to be part of a like-minded community. So if you're interested in hearing more about the platform, please reach out and enjoy the podcast. Sparky Coach podcast Sunday School session. Classes in Grab a Notepad, Grab a Pen, Grab your diary, Grab your iPad, Grab whatever it is to take some notes because we're in for a hell of a session on purchase orders. Now if you don't know what a purchase order is, we don't use purchase orders. Strap yourself in this may be life-ulturing in a positive sense. Business-ulturing in a thunder bolt sense. I am passionate about purchase orders. They will make your life extremely easy. They will make everything amazing overall. So how does a purchase order make your life amazing? Well, it puts a number to a supplier invoice and is tracked from here on in. In a short sense. So how does a purchase order help us? So it allows you to first and foremost control your spending at your suppliers. So in a small nutshell sense, when you place an order at your supplier, a purchase order number is raised and applied to that particular supplier invoice. Now you raise that purchase order against where possible. The particular job that the materials will be going against. There are some instances where you will buy some material in stock. But what it does, it allows you to have a control over your spending because if something comes through from your supplier that does not match up with the information you have at hand in regards to the purchase orders that you have raised, it gives you the ability to say "cicindal". That was not me, that was not us, that was not I. We did not purchase this item, it wasn't me. So it gives you a little bit of cost control around it. So I'm not sure if you've ever noticed it or you've ever picked it up but your supplier statement which you get at the end of each month from your suppliers, it lists all of the invoices of all of the items and all of the times that you have purchased something from that particular supplier and it gives you the ability to be like "yes that was me, no that wasn't me". I recognize that purchase, no I don't recognize that purchase. Now when you create a purchase order history it is just a chronological number sequence as such or combination of letters and number sequence that just rolls over each time a new purchase order is created. Those purchase orders then sit in your job management system and it gives you the ability to close them out and reference them against them or as it's commonly known as "receit them". So you are reciting to say "yes we receive these items" and tick them off and then if you don't, if you get a purchase order, sorry if you get a supplier invoice and it doesn't match up with any of your purchase orders, gives you the ability to be like "hey this doesn't make any sense to me". So gives you an element of control and also gives you the ability to be able to create a trail of documentation which is really really important. Leading on to that trail of documentation gives you the ability to essentially alleviate any billing disputes. End or if there is a dispute it allows you to be factual to be like "hey this is what we've been doing, these are all the orders that we've raised, we don't have any information on here as well". Now the next thing that I think is really really important around it is it gives you the ability to automatically have the material that you purchase come boom straight in onto the job. So it gives you the ability to "hey these materials that we've purchased on this time and day on this particular purchase order number that was assigned to this particular job bang those materials automatically are assigned to that particular job and then in turn that job itself gives you the ability to have accurate information associated with that job and then it gives you an understanding of how the job's tracking, where the cost sitting at, where is the profit sitting at, what did we actually spend material wise on this particular job? Give you a bit of control, so give you some control around the purchasing of your team so you can give the ability to create purchase orders to some people and not to others depending on what job management software you're using or depending on what level of access they have or whether they have access to the job management software at all. So that is a really really beneficial way to control your cost because it gives you the ability to understand who's purchasing what and how and it basically limits unauthorized purchasing. It gives you a little bit of professionalism I suppose as well. "hey looks like we know what we're doing I think a supplier with a PO based business potentially looks organized can speed up your ordering, can speed up your conversations so that you can reference a specific PO number when you're communicating with your supplier in a sense of like "hey PO number such and such, where's it at?" as opposed to like "hey Smith Street" and you've worked on 84 Smith streets in the last 10 years and there's 150 different POs related to Smith Street. It gives you the ability to scale as well so with your supporting not that it directly gives the ability to scale like you'll scale anyway but it supports the scale of the business in a sense that it allows you to manage multiple jobs obviously teams and suppliers, creates really solid and tight ways about ordering the material and allows you to have that control as well. The other thing that the beautiful thing and this is what I really like about purchase orders before we dive into it too much and show you how to create one and how it works is that I need these materials. I need them for job number X which is sitting in my job management software and my job management software supports purchase order integration with suppliers and what that means it's a multiple way conversation which then talks to your accounting software. So in this instance I'll specifically reference like Ferguson Simprone is "hey I've got job number sitting here I need material for it I'm going to raise a purchase order that is linked to job X right I raise that purchase order I enter the materials that I need for it and I send it to my supplier. My supplier then sends the supplier invoice which is integrated into my job management software that is automatically pulled it gets receded and approved depending on the minor steps along the way that is relevant to your job management software. That information is then so that material is then received and allocated to the particular job then that supplier invoice is then pushed into zero. So within zero now you have a supplier invoice from this particular day with this particular P.I. number associated with it and that's sitting in there as a bill that is ready to be paid in the future. Now the other beauty with using purchase orders within your job management system is with your job management system when it's set up quite well and say you've quoted a job and you've got all the materials associated with that particular job out of it and you've assigned hey I need you know X amount of 2.5 cable X amount of 1.5 cable and he power points and he brackets and he fixings and he's important you've gone granular and all and everything's got a part number in there associated with it all. It allows you to pull the information out automatically into a purchase order and bang send it off to the supplier. So twofold you can pull it out as a supplier quote okay send off to your supplier send off to multiple suppliers and get the procurement stage happening so you can get costings for what it's actually going to cost me or you can pull it straight away and send it straight off for the order to be fulfilled. So it cuts out a lot of the double handling because the high works being done at the beginning with the pre-builds and then in turn it allows you to click a couple of buttons bang it's sent on and then in turn material turns up, information is receded, so I supply our invoices receded and that's sent over to zero. Now a beautiful way to have a look at this in in a accounting sense as well is that with the accounting side of it so say you're zero software or your accounting software here let's just say last month of March there were 20 supplier invoices from CNW right so CNW supply 1 to 20 it'll have an invoice number get 1 2 3 4 5 and then all different ones for all 20 the value of those 20 invoices then equal 20 thousand dollars in total so 20 invoices equal 20 thousand dollars right you get your statement come in you set up your payment you've paid your supplier your supplier has been paid 20 thousand dollars so you've got 20 thousand dollars of money paid out of money spent that comes out in your job management software that 20 thousand dollars is then now reconciled against those 20 individual invoices so those 20 individual invoices are ticked off and marked as paid and your statement is now reconciled simple as that so you can have a look at it in a sense that there is a supplier invoice associated with the pool of money spent each month with your supplier so it helps with reconciling as well and it helps with your supplier payments so you know you're actually paying and if there's any credits or anything like that apply they come a lot come along the way and you can create credit notes within your job management sorry within your job management and within your zero software so it can be reconciled in that particular sense so in a really really I guess beautiful way it allows for you to really track your materials in a really nice way so that you have the ability to be able to see hey what material is actually assigned to these jobs cool what do I owe my suppliers so it gives you real time tracking and real time understanding of hey this is what we actually owe to our suppliers at any one's time so it gives you real dark with how you sitting in a financial sense and I don't know anyone I don't know anyone at all who wouldn't know or who wouldn't want to know what's happening in that particular sense I think it's super super important to be able to understand what isn't isn't happening so with the purchasing part of it super super important to think bring it into line with your business and allocate them so that it takes the guesswork out of where you're actually sitting at any particular time in your business it takes the guesswork of allocating and assigning materials to job it will save you so much money because it's not like what material do I use on here it's like hey these are all the materials that have been assigned to it all you'll save thousands of dollars in material just falling through the cracks because they're assigned to a street number or they're assigned to a street name or a job name or something like that it allows you to really dial in and assign the materials correctly to any particular job so you have the ability to be able to assess it so I'm going to give you an example here of what it looks like in SimPro first and then I'll give you an example of what it looks like in Fergus and how it operates in a really really simplistic sense so within SimPro itself so let's just say we've created a purchase order so we've created a new purchase order so you come over here and you just create a particular purchase order here all right going to give you an overview of what it's like to see what purchasing is within SimPro itself and then I'll share with you a bit of Fergus as well so we'll jump over to SimPro here get the sharing occurring so really simplistically within SimPro we have the ability to be able to create purchase order so it's quite simply go to materials and you can create a blank P.O. We can create within the jobs I'm just going to show you creating a blank P.O. number so here you can assign it so you can search for job number so for example I may have I'm just thinking of a site so VEVY Street so we could put it in there and assign it to that particular job number and cost center or you can just put it in a PULIOUS stock so you must understand if you do put it in a stock it will just go straight to your stock take itself and it will end up in the storage device that you select here so out of all these vehicles it'll end up in there so if you don't have it if you do choose stock it will just go to your storage device which is why I recommend doing it to a particular job in the instance that we talked about earlier select your supplier so let's have a look here Haymans for example which is beautiful you can then go in and oops to start to stock so it doesn't create one for me in regards to sweet whoops order order some material here obviously associated with it so it's from the catalog we can get the catalog let's just say we're getting some cable which is CBL 2.5 to you right here so we need to get 200 meters that so bang where we go we need some cable I need some clips or iconic power points as well unless you say we need 10 of them and I need some clips or 154 C clips as well which will be a little bit further down here and let's just say I need a box of 20 of them so those items have been added in there now so those items sit in here and I might be want to put a supplier note in here I'm like hey I want to deliver these to the office that's like hey bang that's delivering them to the Gold Coast unit to office in there so you put some notes associated with it as well and then what happens is as you say that it's created a PO number associated with it all same finish it and then you can just choose and it just sends it straight off so this is what it comes up with it's just a PDF that's been created and just get sent straight to the supplier and then what happens is that PO is now sitting here or jump back in there is now sitting here and when we when we bring it in and we receive it's being receded it comes in as receded and then the tax invoice number sits in there as they recede an item so I'll go have a look at my purchase orders I'll have a look at the receded ones and we'll have a look at one here so these particular items have all been receded so that's the items been receded that there is a tax invoice number that it was against so then those items end up and then it gets pushed over into zero in a really really simplistic way so that supplier invoice which is not attached in this particular instance but it will end up as a invoice within SimPRO within zero that gets pushed through and you have the ability to be able to view it in your job management software as well so I'm going to give an example of what a Fergus one looks like so let's just say you've got a job that's sitting and we've got job number seven it's a test job we come down here we have a look at a purchase order and we can create a purchase order and we assign it so then we can jump in here and we can select the supplier in this instance the datwm is it pick up or delivery the order number has been raised and put a contact and a date and time and then you can then search your price books so AWM if it's in there we can search for it in this particular instance it's not actually allocated to we don't have our price books synced up in here but what happens is you can do this you send it and then you can email it off to your supplier and then that reference there is picked up and then your supplier docs come in here and then you can choose to assign it to which particular job you're looking for within and then I'll focus itself as well. So it gives the ability to reconcile it and then send, sorry, receipt it and then send it off to your job management software. So they're just two examples, pretty briefly around purchase orders and how you utilize them. But I really want to emphasize the importance, whatever job management system you are using, you create purchase orders assigned to the job. And then you follow the pathway of the receding of it all. If your job management system is linked with your supplier, and then your job management is integrated with your accounting software, it creates a full circle of all your material being receded and received and then assign an allocator to a particular job and ending up in zero benefits of all of this, right? So in summary of it all, is that creating a purchase order gives you the ability to assign that material to a particular job. When that is received, it will automatically be received and assigned to that particular job and all you may need to just manually push it. But it will be assigned to it by the allocation of the PIO number, which is a PIO number, which is assigned to a job, the job itself. Then once it's allocated, it gives you the ability, to be able to then go down and around and across, to be able to have a look at where it's sitting in a sense that, hey, I'm now in my zero or in my accounting software, and we've got supplier costs associated in zero. So it gives you ability to reconcile statements, but it also gives you real time numbers of where we're sitting in a cost sense of the bills building up over the period of the month. So it gives you an accurate number of your expenditure to your suppliers. But most importantly, you do some transparency and gives you the ability to be able to, I'll stop that there, give you transparency and give you the ability to be like, hey, where is our expenses going and where are we spending our money? And it gives you the opportunity to be able to track where your materials are being purchased from and where they should be going. So you don't have a leaky bucket of material and not being assigned to jobs. And they're not in there for not being charged onto the clients. So highly recommend POs the way to go. If you have any questions around POs, please reach out. Happy to converse more about them and happy to talk further about them and how they can work for you and how apply the job management software that you're doing. But if you don't use them already, please get stuck in a PO as they're super easy. Enjoy your day. What have you up to? Thanks for tuning in as always and happy to discuss further peace. That's a wrap on another podcast. Whatever you're doing, don't be too busy to stop and and check if you're making money and above all else, you know the rules, be kind. Season.