End of Fiscal Year Purchase Order Management

• A purchase order, or PO, is an official document issued by a buyer committing to pay the seller for the sale of specific products or services to be delivered in the future. The advantage to the buyer is the ability to place an order without immediate payment.
• The advantage to the seller is a guarantee that if the products or services are delivered, payment will be made.
• Procurement can assist with changes to a PO if they are appropriate to the contract with the seller.

• Funds for a PO will remain encumbered until the services are completed, the cost is invoiced, and the vendor is paid. The encumbrance remains across fiscal years if this does not all happen in one year.
• If a PO was issued during a previous fiscal year, and if that PO is no longer needed, cancelling or reducing the PO will not return funds to the department. If you do not use it, you will lose it.

• Balance is zero = Close PO
• Balance is greater than zero but no more payments are due to the vendor = Contact Procurement to reduce the PO to match the final amount.

 If it is a multiline PO, each line has a balance that is allocated for specific service/item. The PO is not completed until all the lines are invoiced. It should stay open if more invoices are expected.

Verify that all open POs are needed in the next fiscal year.

If the PO is no longer going to be in use, contact Procurement to reduce or cancel the PO to return funds to the department.

• If you know the final invoice amount, and the invoices will total a lower dollar amount than the encumbrance, amend the PO to the lower amount and return funds to the department.
  • i.e., discounts, credits etc.