Financial Workflow: POs, Bills, and Invoices
Date: 20.08.2025 | Revision: 2023.02.d
This document outlines the comprehensive workflow for managing Purchase Orders (POs), Bills, and Invoices in Buildertrend. Adhering to this process ensures financial control, accurate job costing, and timely payments.
1. Core Concepts: The PO-Bill-Invoice Relationship
Understanding the distinction between these three components is critical for maintaining financial integrity.
| Component | Purpose | Key Rules |
|---|---|---|
| Purchase Order (PO) | Defines the scope and approved budget for work or materials. | - Authorizes work to begin. - Once approved, its value appears as a Committed Cost in the job budget. |
| Bill | Records a debt owed to a supplier or subcontractor for services/goods rendered. | - Must be linked to a PO. - Cannot exist independently. - Total bills cannot exceed the PO amount. |
| Invoice | A request for payment from a supplier or subcontractor. | - Triggers the verification and approval process. - Payment is based on approved invoices, not just submitted ones. |
For detailed procedures on invoice handling, refer to the Invoice Management Workflow.
2. The Workflow: From Purchase Order to Payment
Step 1: Create the Purchase Order (PO)
A PO is the foundation of any expenditure. The approach to creating a PO depends on the nature of the subcontractor or supplier.
PO Creation Strategy
| Subcontractor/Supplier Type | Policy | Rationale |
|---|---|---|
| Main Subcontractors | One PO per job. | Consolidates all work, including variations, under a single order for streamlined tracking. |
| Accounts & Labour | One PO per billing cycle (e.g., monthly). | Aligns with their recurring payment schedules. For labor, itemize costs weekly within the monthly PO. |
| One-Off Trades | One PO per contractor. | Ensures even small, specialized jobs are properly documented and tracked. |
| Direct Card/Cash Payments | A PO may still be required. | For one-off purchases (e.g., materials from Bunnings) or fees. Consult with Account Manager Sunny for cash payments. |
If a company is not on the official Accounts & Labour List, they are treated as a Main Subcontractor or One-Off Trade. For new subcontractors, always consult with the Director (Gear) before proceeding.
Step 2: Receive and Upload the Invoice
When an invoice is received from a subcontractor or supplier:
- Identify the corresponding PO in Buildertrend.
- Create a Bill against that PO. The bill amount should match the invoice amount.
- Upload the invoice and attach it to the newly created Bill.
Step 3: Approve the Invoice for Payment
An uploaded invoice is not automatically ready for payment. It must undergo a rigorous approval process.
Approval Checklist:
- Verify Accuracy: Is the amount correct?
- Prevent Duplicates: Has this invoice already been processed?
- Confirm Legitimacy: Is the work or material documented and justified?
- Check Quality: Was the work completed to standard, without defects?
- Cross-Reference: Does it align with the contract terms and PO?
Once all checks are complete, the Project Manager or Contract Administrator must mark the Bill as "Ready for Payment" in Buildertrend.
A Bill can be created without being marked "Ready for Payment." This signifies that the invoice has been logged but is still pending final review (e.g., waiting for a signed delivery docket).
3. Summary of Key Principles
- No PO, No Work: A PO must exist before any cost is committed.
- Bills Follow POs: All bills must be tied to a pre-existing PO.
- Invoices Trigger Action: Invoices are claims that require verification and approval before payment.
- Documentation is Key: Maintain meticulous records of all POs, Bills, and Invoices for auditing and financial accountability.
- When in Doubt, Ask: For any uncertainties, consult with Director Gear or Account Manager Sunny.
Work FLow
Date: 20.08.2025 | Revision: 2024.08.d