Purchase order

If you work in accounts payable, you will face this scenario frequently.

The invoice doesn't match the purchase order, the PO.

What do you do? Today I'm breaking down one of the toughest accounts payable interview questions and one of the most common real-world accounts payable problems.

Let's walk through seven different scenarios you might encounter that will cause you problems with your matching and how strong accounts payable teams handle these headaches while protecting their company the solutions might not always be what you might expect especially the last one so let's start off with the situation number one where there's a lower quantity on the invoice than there was on the purchase order Start off by checking the purchase order and talking to purchasing.

If it turns out it was a partial shipment, you need to address the matter of does your organization allow partial shipments against a purchase order or do you need to get separate purchase orders for each shipment? Once you've determined what you need, work with purchasing and the supplier to get the appropriate documentation.

And if you're going to have to, if you don't allow partial shipments, make sure that old PO is canceled.

And of course you'll need corrected.

Okay.

Ready for the rush.

Stress testing customer, mark any SKU whose velocity cannot cover inbound lead time without a markdown or a stock out and write the next purchase order only for SKUs you marked restock and keep the wait and kill rows off that PO.

But before I unlock today's Voltage 3 insights, we need to talk about the rush.

I was looking at some Cinch data this morning and it hit me.

No maybes.

Number three.

Write the next purchase order only for SKUs you marked restock and keep the wait and kill rows off that PO.

Check.

I've got quite detailed there, so I don't know if I've left much for you, Sergio.

No, I think you ended right where I was going, but I do think there's a quantitative measure there that we can, or metric that we can put in, which is actually just purely number of POs raised and number of non-PO invoice Invoices raised, which ties into the experience.

So one big reason why you might have non-PO invoices is because people didn't raise the PO in the first place.

Why does that happen? Because the experience is terrible.

I don't want to go into the ERP and spend 10 minutes filling out a form with data that I don't know how to enter.

If that experience is better, it's easier.

If it takes me two minutes instead of 10, if it's within a platform that I already know how to access because I was just there raising an incident or something similar, you're going to see an increase in POs.

you're going to see fewer invoices that you're unable to track, which is in of itself a good measure to have, right? You want to decrease the number of non-PO invoices because you want to be able to track your spend much better, not have to spend as much time tracking what that invoice might be for.

Open business reports and write units per day for the last 14 days on every SKU this SKU.

New e-commerce rules could add compliance load, mark any SKU whose velocity cannot cover inbound lead time without a markdown or a stock out, and write the next purchase order only for SKUs you marked restock and keep the wait and kill rows off that PO.

But before I unlock today's Voltage 3 insights, we must grasp why quarter still hides the margin you keep guessing about.

Most operators think they can adapt on the fly.

Number two, mark any SKU whose velocity cannot cover inbound lead time without a markdown or a stockout.

Check, each marked SKU says restock, wait, or kill, no maybes.

Number three, write the next purchase order only for SKUs you marked restock and keep the wait and kill rows off that PO.

Check, the PO draft matches the restock list and the pause SKUs are not on it.

paper trail matters because of the revision control.

If the manufacturer revises the BOM after the quote, but before the PO, the whole thing has to restart.

The quote was for revision C.

The PO references revision C.

Only after the manufacturer approves the quote does the purchase order get generated.

The PO goes back to the distributor, who then converts it into a sales order.

Then comes the invoice, the shipping notification, the receiving document.

That's why the BOM revision is stamped on every document.

So as, as I said, a forecast, forecast intelligence agent.

Um, the PO excellence agent is the other one that really allow you to have a very good interaction between your, your suppliers and your inventor as well.

The scheduling agents, because if you don't know your capacity, if you don't, don't-- if you don't dominate of your bill of material, if you have... a-and your bill of operation, how, how can you really plan your activity in, you know, in the factory very well? And at the end, the, uh, able, the able to promise and capable to promise, that that's really drives your, uh, promise to dates you're gonna be achieve or not.

I think this is the most important agents in the, in the sequence.

Don't miss a promise date.

So what does that mean? Well, that means you've gotta get out ahead of it.

When that, when that customer gives you that PO, you have to be able to respond to him and tell that customer when we're gonna ship it, and then you better hit it, right?

Yeah.