What is the point of PURCHASE ORDERS?

[VenalWinfrey]

Dear all

Super thick question I know! Here goes. I work in finance, and we try to insist as a department that when individuals within the company place orders with our suppliers, they raise a 'purchase order' in advance, which can be quoted on the invoices. Can anyone explain to me the reasons/benefits behind doing this?

As far as I can see, is it just a means for heads of departments to control their budgets, and ensure they know what is being spent where, when and by whom?

Any help greatly appreciated! Thanks as always.

[mandimoo]

surely, for the heads to control their budget is good enough reason? ultimately the owner of the company needs to know if he is profitable, otherwise why bother. also the indvidual buyers, over a period of time could not possibly remember every individual item theyd ordered, at what price, what lead time, when it was due. if you had several buyers who saw that you needed an item, each one of them may phone and order it. if nothing recorded on your system, you may end up with 10 of an item you only need 1 of, which would be a waste of money. there are sooooo many reasons actually, the above are just a couple.

[Oneeyedvic]

There are also legal ramifications - what happens if an employee phones us a supplier and says "can I have 10 laptops delivered please". If the supplier just blindly follows this instruction and delivers the laptops which subsequently disappears, who do you think will pay?

With a purchase order ,generally speaking only managers should be able to access the numbers etc, so there is immediately a 'trackable' trail to follow.