How purchase order (PO) commitments work

To receive accurate values for purchase order (PO) commitments, your Purchasing application must be set up so you can enter an order and later receive the order and/or create the PO purchase invoice.

The Construction industry uses specific terminology that can differ from Sage Intacct terminology. Understand how Sage Intacct terms align with Construction industry terms.

You can then change Sage Intacct terminology to match Construction industry terms. For example, you can change Project to Job.

1. When you order items through Purchasing, select the project, select whether line items are billable, and submit the order.
   • Depending on how Purchasing was configured for your company, orders may be submitted through a purchase order or other similar transaction.
   • Regardless of how this type of transaction is named in your company, line items will be tracked as PO Commitments for the project as long the transaction is an order that hasn't been received or hasn’t posted a liability to Accounts Payable.
   In the transaction definition, the Template type must be “Order” and the "Post to AP" option must be deselected for a commitment to be recognized. You can also create a purchase order by converting a requisition (Template type = “Quote”).
2. On the Project summary tab, the amount of the order appears in your PO Commitments.
3. Later on, return to Purchasing and receive the items and/or convert the Purchase Order to a PO purchase invoice.
   • Depending on your company, receiving items and recording the PO purchase invoice may be separate steps or combined into the same transaction.
   • To accurately calculate PO Commitments when orders are partially received, the Purchase Order transaction definition must use the “Leave Transaction Open” option, instead of “Close Original and Create Back Order.”
4. On the Project summary tab, the PO Commitments amount is reduced, with the corresponding amount added to either Billable Expenses or Non-Billable Expenses.