Why You Need Purchase Orders In Your Building Business

Purchase orders serve a key purpose in a construction business to help;

• Identify deliverables and scope of works

• Confirm agreed costs

• Outline important project information

• Assist with budgeting and cost tracking, and

• To act as an overall risk management tool

Keep reading below where I'll dive deep into these key outcomes....

1. Identifying Deliverables and Scope of Works

Purchase orders play a crucial role in clearly defining the deliverables and scope of works and this on its own make them a primary reason to be used.

By having a centralized document that specifies what is expected from trades or suppliers, potential misunderstandings and confusion can be mitigated, ensuring all parties are aligned on the project requirements.

2. Confirmed Agreed Upon Cost

Purchase orders confirm the agreed-upon cost for the services or materials being provided.

By detailing the specific price you're going to pay, any discrepancies or misunderstandings on the price can be addressed at the start (before the trade commences the works or supplies goods), avoiding disputes later on.

3. Outlining Important Project Information

In addition to deliverables and costs, purchase orders also serve to outline important project information and business terms such as invoice payment terms, expected start dates (for the works), contact information of key personnel, and any site specific information (i.e. permitted site working hours).

When sending out a purchase order to on-site trades, I also use this as the opportunity to provide them with the site specific safety information (i.e. the site health and safety coordination plan) and to also provide them with a link to complete their site safety induction.

4. Budgeting and Cost Tracking

Purchase orders act as the first step to monitor the project budget (against purchase order costs) and to allow for cost tracking.

By having a baseline cost established in the purchase order, builders can easily monitor and compare actual expenses against the budgeted amounts, enabling better financial management and decision making throughout the project.

5. Risk Management

Taking all the above into account, purchase orders act as a comprehensive risk management tool for the builder by addressing project deliverables, specifying expected costs, providing the necessary project information, and providing the first step for financial tracking against the budgeted cost.

By utilizing purchase orders, builders can minimise uncertainty, provide for greater project transparency, and overall, reduce the potential risks already associated with building and construction projects.

Ready To Start Using Purchase Orders In Your Building Business?

Wunderbuild is an all in one construction management software which you can use to manage your entire building operation from the Pre Construction stage (leads, tenders, takes offs, estimates and quote proposals), Accounts & Billing (invoicing, purchase orders, timesheets, financial reporting) and Project Management (scheduling, site diaries, task management, quality control checklists, mobile app and more).

Specifically with regard to purchase orders, it allows you to;

• Create and store purchase orders for each job

• Attach the relevant plans and documents for each purchase order

• Customise the purchase order content and details through saved templates

• Email the purchase order to your trades and suppliers directly from the software

• Capture receipts (bills received) against the purchase order cost, ensuring you don't overpay and that you're running a tight ship when it comes to your budgets and cost tracking.

Wunderbuild comes with a free 14 day trial so you've got plenty of time to try out all the features and with plans starting from less than $250 per month for up to 10 projects, you'll be hard pressed to find another construction management software tool with so many features at such a low price.

PLUS, when you sign up for Wunderbuild from this page and then stay on as a paid subscriber, you not only get my entire Builders Software Toolbox package and a copy of the Builders Blueprint book, you'll also get my personal help to customise and set you up with Wunderbuild all for FREE, so you can get off on the right foot when it comes to setting up Wunderbuild and systemising your building business.

To find out more watch the video below

If you have any questions, feel free to send me an email or you can join my private Facebook group to post your questions/comments and at the same time connect with like minded builders using Wunderbuilds' software.