Guide · Purchase orders
The purchase order workflow
that makes cost control real.
A purchase order is a promise to spend money. Run POs well and your committed costs stay honest and invoices reconcile themselves. Run them badly and cost control is guesswork. Here’s the workflow that works.
01 / The basics
In plain English
A purchase order (PO) is a document you raise to a supplier or subcontractor that says: this is what I’m ordering, at this price, for this job. It’s your record of a commitment to spend, money you’ve promised even if the invoice hasn’t arrived yet.
POs matter because they’re the backbone of cost control. The moment you raise a PO, that amount becomes committed cost against the job’s budget. When the supplier’s invoice arrives, you match it back to the PO to confirm you’re being billed what you agreed. Without POs, you only find out what a job cost when the invoices land, too late to do anything about it.
Why POs are the link between budget and actual
- Budget is what you planned to spend.
- Committed is what you’ve ordered via POs but may not have been billed.
- Actual is what you’ve actually been invoiced.
POs are what make the “committed” column real, and committed cost is your early-warning system for a blowout.
02 / The reality
Where builders get stuck
No POs at all
Ordering by text and phone call means there’s nothing to match invoices against and no committed-cost picture.
POs raised after the fact
A PO written to “tidy up” an invoice that already arrived defeats the purpose. You never had the early warning.
No link to the budget
POs kept in a separate book don’t draw down the budget, so committed cost lives only in someone’s head.
Manual invoice matching
Matching invoices to POs by hand is slow, so it gets skipped, and over-charges get paid.
Variations not captured
Extra work ordered verbally never makes it onto a PO, so the cost surprises you and the variation never gets claimed.
Approval chaos
Without a clear approval step, anyone commits the company to spend and nobody’s watching the total.
03 / The fix
A workflow that holds up
- 01
Build the budget first
Start from the won estimate so every PO has a budget line to draw against.
- 02
Raise the PO up front
Order through a PO before the work or supply happens, not after the invoice.
- 03
Commit against the job
The PO draws down committed cost on the job budget the moment it’s raised.
- 04
Send it to the supplier
The supplier knows exactly what’s ordered, at what price, for which job.
- 05
Match the invoice
When the invoice arrives, match it to the PO and flag anything that doesn’t agree.
- 06
Approve and record
Approve the matched invoice and push it to accounting so actuals update against committed.
04 / The tooling
How software helps
Software makes the PO workflow worth doing by removing the friction. When POs are raised from the job budget, committed cost updates automatically, with no separate ledger to keep. When the supplier invoice arrives, the software can match it to the PO for you and flag mismatches, so the check that protects your margin actually happens.
Tie that to accounting and the loop closes: approved, matched invoices become actuals against the budget, and your budget-vs-committed-vs-actual picture stays live without anyone reconciling a spreadsheet.
05 / In practice
Where VIABUILD fits
VIABUILD closes the PO-to-invoice loop.
In VIABUILD, the budget comes from the estimate you won on, and POs draw down committed cost against it. When the supplier invoice lands in your AI accounts inbox, it’s matched back to the PO automatically and any over-charge is flagged before you approve.
Approved bills push to Xero, and the actuals flow back against the budget, so the whole loop from commitment to payment is one connected workflow, not three disconnected steps.
- POs raised from the job budget
- Committed cost updates automatically
- Automatic invoice-to-PO matching
- Over-charges flagged before approval
- Approved bills sync to Xero
- Actuals flow back against budget
06 / FAQ
Common questions.
A purchase order is a document you raise to a supplier or subcontractor specifying what you’re ordering, at what price, for which job. It records your commitment to spend and becomes the reference you match the supplier’s invoice against.
Raising a PO up front turns the order into committed cost against the budget immediately, giving you an early warning of where the job is heading. A PO written after the invoice arrives provides no early warning and no real control.
Committed cost is money you’ve ordered through purchase orders but may not have been invoiced for yet. It sits between budget (planned) and actual (billed), and it’s the number that warns you about a blowout before the invoices land.
POs are raised from the job budget and draw down committed cost automatically. When the supplier invoice arrives in the AI accounts inbox, it’s matched to the PO and over-charges are flagged before approval, then approved bills sync to Xero and update actuals.
07 / Keep reading
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