When is it appropriate to close your purchase order (PO)? The list below summarizes when a PO should be closed. Read on for additional details on each and tips for fiscal year-end.
- The wrong supplier was used when creating the PO.
- All expected invoices have been paid but the PO remains open.
The wrong supplier was used when creating the PO
Unfortunately, it’s not possible to swap suppliers on a purchase order. If you find the wrong supplier was selected when building the order, close the existing PO and submit a new requisition using the correct supplier record. Be sure to notify the supplier that a replacement PO is headed their way so they know to use it for future invoices.
All expected invoices have been paid, but account encumbrances remain
Depending on how invoices were applied, a PO may remain open after all invoices have been received and paid. If this is the case, fully close the PO by navigating to the three dots (next to the help icon at the top of the PO) and select Close PO from the menu. This releases account encumbrances.
Fiscal year-end tips
Existing PO encumbrances roll forward to the next fiscal year automatically. This is a good thing! This means that orders that haven’t been fulfilled can remain open and continue to receive invoices and make payments into the new fiscal year.
Do not close a PO if you’re expecting additional shipments or services to be performed. The PO should remain open until all invoices are received, regardless of the fiscal year.
Closing a PO prematurely can delay the supplier’s payment and affect other IU department’s ability to place new orders. If you need assistance determining whether a Purchase Order should be closed, you can log a comment to the PO and tag the Purchasing Helpdesk.