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Spend Management for QuickBooks Online

Purchase Order Creation in QuickBooks

Purchase order creation in QuickBooks Online is simple. Just go into the Vendor profile and click on the New Transaction tab which is on the right side of the screen.

Click on the Purchase Order option from the drop-down menu, and you’ll be able to add both category and item details to the purchase order.

The purchase order feature in QuickBooks Online is easily navigated.

Once the purchase order has been entered, you can send the purchase order electronically to your vendor or supplier for processing.

In QuickBooks Online, you can also update the purchase order status once an invoice has been received by copying the information to a bill for AP processing.

There is also an option to view all open purchase orders by running the Open Purchase Order List report, which can be run by product/service or by vendor.

One thing to note is that the purchase order feature in QuickBooks Online will need to be turned on. This can be done in the Settings area of the application.

For a small business this can work well. But as a company grows this will create a bottleneck with your accounting team because you won’t want all your staff to have access to QuickBooks and see your accounting data. QuickBooks does not have granular access controls.

Also, there are no purchase order approval workflows and other important functions for properly managing purchasing within a company.

Budgeting

Both QuickBooks Online Plus and QuickBooks Online Advanced offer basic budgeting options that can be useful for your finance team.

You have the option to use previous year totals or current year totals to prepare your budget.

Because QuickBooks Online uses accounts that are in your current chart of accounts, if you wish to add a particular account to your budget, you’ll first have to add the account to your chart of accounts.

The Budget feature lets you create a new budget for multiple fiscal years.

A Pre-fill data option lets you prefill a newly created budget using previous year or current year totals, and you have the option to subdivide the budget by customer if you desire.

You can create a budget for up to seven fiscal years, and have the choice to create a monthly, quarterly, or yearly budget.

If you subscribe to the Advanced plan, you can also import budgets as a .CSV file.

There’s also an option to copy an existing budget, which allows you to use last year’s financial data in your new budget.

Once a budget has been created, you can run either the Budget Overview report or a Budget vs. Actuals report so you can see how close your current totals are to your budgeted amounts.

The budgeting in QuickBooks Online can be beneficial from a reporting perspective but it will not restrict and control expenditure during the purchasing process and give you real-time budget vs expenditure data at the point of approving a purchase like Planergy, a dedicated spend management software that integrates with QuickBooks Online.

Invoice Processing

Invoice processing is simple in QuickBooks Online, but there is no real automation involved in the process.

For example, once you receive an invoice for a purchase, if the invoice matches the purchase order, you can change the status of the purchase order by converting it to a bill.

However, there is currently no option for an invoice to automatically connect with a purchase order.

Create a bill from scratch or upload an electronic invoice directly in QuickBooks Online.

If you have already created a purchase order for an expense, you can create a bill for that purchase order by choosing the Copy to Bill function, which will automatically close the purchase order.

A dedicated AP automation software that integrates with QuickBooks Online, like Planergy, can greatly improve invoice processing in QuickBooks.

This is achieved by automatically importing invoices, digitally archive them, scanning them using OCR and AI, automatically two- or three-way match the invoice against PO and GRN, flagging duplicate invoices, highlighting any differences between PO and invoice, and automatically routing invoices for approval.

Reducing manual steps and managing by exception greatly improves invoice processing time and reduces the cost of processing invoices.

Supplier and Vendor Management

Vendor management capability is decent in QuickBooks Online. You can add the usual contact information, including a billing address, by clicking on the Vendor Details tab.

To view all current supplier and vendor activity, click on the Transaction List option, which lists all current transactions related to a particular vendor including bills, purchase orders, and payments.

The Expenses option lets you manage all vendor activity from one screen.

One of the most useful features in QuickBooks Online is the ability to complete all related vendor activity from within the Vendors screen.

For example, if a vendor has an open bill, you can schedule it for payment directly from the Vendors screen.

You can also update the status of a purchase order from the Vendors screen, copying information over to a bill.

While this is extremely useful, unfortunately, it doesn’t lend itself to automating the AP/procurement process, since all of these updates will need to be entered manually.

A dedicated spend management platform, like Planergy, will add additional vendor management features. These include supplier approval, vendor performance management, vendor management KPI tracking, PunchOut catalog integrations, and reporting easily on vendor spend.

User Access Controls

QuickBooks Online allows you to add a new user to the system at any time. Unfortunately, there are only two levels of users available:

Standard Users

Standard users can be given full or limited system access.

Standard users with full access can view, add, and change information in both Customers and Sales and Vendors and Purchases.

This includes writing checks, making bank transfers, making deposits, and changing system preferences.

Those with limited access can perform most job functions, but cannot print checks, view bank registers, adjust inventory totals, view income and expense totals, or set up multicurrency options.

There is no option to customize which features and functions the system users can have access to.
Company Admin

Company Admins have complete access to all system features including sending money, changing passwords, and adding users.

New users can be given All, Limited, or No access in QuickBooks Online.

Two other types of access can be used that don’t count toward the number of current system users:

Reports Only

This designation allows employees to access standard financial reports while restricting payroll reports and those that contact personal information.
Time Tracking Only

If you use time-tracking, this designation allows employees to add their time sheets to the system.

While these options may be suitable for smaller businesses, larger businesses will likely need a more sophisticated way to assign access controls for their employees.

A separate spend management platform allows you to leave access to QuickBooks to the finance team while giving more granular controls around purchasing. For example, restricting access to view POs from just one department.

Reporting

For general financial reporting, QuickBooks Online offers solid reporting options.

For expense management purposes, those reports are limited to the following:

Open purchase order list
Open purchase order detail
Purchases by product or service detail
Purchases by vendor detail

Expense management reporting in QuickBooks Online is limited.

While there are several accounts payable and vendor reports available, the reports provide minimal information that can be useful for proper spend management.

A dedicated spend management software, like Planergy, can include deep reporting functionality for accounts payable and procurement with automated spend analysis.

Spend Management Best Practices

Spend management best practices are important for small and mid-size businesses.

These best practices include:

Automating workflows and removing manual tasks
Vetting and selecting vendors carefully
Procurement of goods and supplies at the best price for the best terms
Maintaining a good business relationship with vendors which should include regular communication
Taking advantage of early payment discounts when offered
Setting departmental and individual spending limits to stay within budget
Making sure that vendors and suppliers are always paid on time and accurately
Using analytics to make the best possible business decisions

Automation plays a key role in spend management best practices. For example, it’s difficult to pay vendors on time when invoices aren’t approved regularly.

It’s also difficult to have a complete picture of your finances when invoices are sitting on someone’s desk waiting to be approved.

When using manual AP systems, it can also be difficult to take advantage of early payment discounts.

That’s why it can be beneficial to your business to use a procure-to-pay application that integrates with accounting software applications like QuickBooks Online.

Use a Dedicated Spend Application with QuickBooks Online for Improved Spend Management

Using a dedicated spend application like Planergy can increase the effectiveness of your accounting software application while also automating much of the purchase order and accounts payable process.

For example, Planergy offers the following features that can significantly reduce or even eliminate data entry, provide real-time budget vs. actual reports, and true AP automation.

Features Spend Management Software adds to QuickBooks Online

Two- and Three-Way Matching

While you can match a purchase order to an invoice in QuickBooks Online, the process has to be completed manually.

Using an application like Planergy, incoming invoices are automatically matched to shipping receipts and purchase orders using artificial intelligence and OCR technology.
Automated PO Processes

Instead of using a manual purchase order system, mapping Planergy to QuickBooks Online allows you to automate the entire purchase order process from the initial purchase request to automating the entire purchase order workflow process.

Using a procure-to-pay software application also allows you to better monitor spending while reducing time-consuming manual processes.

In addition, you can manage your purchases from initial request to approval, to payment, from any device or mobile app.
Purchase and Invoice Approval Workflows

One of the biggest issues that impact accounts payable is delayed approvals. Using a manual approval process, paper invoices are routed to approvers, where they can remain on a desk for days or weeks at a time.

Even if you receive invoices electronically through QuickBooks, those invoices will still need to be routed to approvers before they can be paid.

Using procure-to-pay software streamlines the approval process by using an automated approval workflow that eliminates the manual approval process.
Budgeting Controls

Planergy gives you real-time visibility of spend versus budget.

It can also restrict purchasing when you reach your budget requiring approval on a budget increase before further spend can be committed against the budget.

This gives you better information when approving POs while also having the ability to ensure you are staying within budget.
Supplier Relationship Management and Approvals

QuickBooks Online allows you to enter basic vendor details, but it’s impossible to adequately manage large numbers of purchases using QuickBooks applications alone.

But adding a procure-to-pay application like Planergy offers easy vendor onboarding with centralized data management capability that can support vendor systems and supply catalogs.

In turn, a better supplier relationship can also lead to better pricing and more flexible payment terms.
Spend Analytics

If you’ve ever wondered exactly what your business is spending its money on, having access to true spending analytics is vital.

While QuickBooks Online offers good standard reporting options, there’s little available that can help with true spend management.

On the other hand, procure-to-pay applications like Planergy offer real-time business intelligence reports and user dashboards that can be fully customized to suit the needs of your business and help turn data into actionable insights.

Unlike QuickBooks reports, procure-to-pay applications offer insight into spending levels and where you’re spending. You’ll also be able to track every purchase you make.
Accounts Payable Automation

While you can manage invoices in QuickBooks online everything is quite manual.

Planergy introduces AP automation to automatically scan and match invoices, automatically forward invoices for approval to the correct person, all while ensuring invoices are backed up digitally.
Accurate AP Reporting

Instead of waiting until a bill has been received or paid, using a procure-to-pay application allows you to view budget vs. actuals in real-time.

You’ll also have access to business intelligence reports while ensuring a quicker, more accurate month-end closing process which includes committed spend totals.
Granular User Access Controls

User access is an important part of any application. QuickBooks Online offers multi-level user access but fails to provide granular access control that keeps access to accounting data strictly to accountants.

A better solution is to use an application that offers granular user access controls, allowing authorized users to access procure-to-pay features without having complete access to accounting software applications.

As a result, AP and purchasing staff have easy access to the functions they need without access to confidential data such as payroll and bank account information.

For added security, things like two-factor authentication and the ability to set multi-level permissions based on roles help keep confidential information secure.

Have the Best of Both Worlds

QuickBooks Online is a great application for general accounting, but it offers little in the way of spend management capability.

But when coupled with an easily integrated, procure-to-pay application, like Planergy, you can continue to use the accounting software you’re comfortable with while bringing AP automation to your business.

With a procure-to-pay application, you can manage all of your purchase orders, from initial request to approval directly in the application, without the need to access QuickBooks Online.

In addition, procure-to-pay applications like Planergy offer AP automation such as three-way matching automation, with the ability to automatically import and generate bills in QuickBooks Online for all approved expenses.

Using an automated procure-to-pay application will allow you to reduce or even eliminate paper invoices, create an automated workflow approval system that ensures that invoices are promptly approved for timely payment, and eliminate the need for duplicate or repetitive data entry.

Using QuickBooks Online combined with a procure-to-pay application like Planergy can eliminate Excel spreadsheets, save time, and still provide the accounting capability your small business needs.

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