A Purchase Order tells the vendor where to deliver the product and where to send the invoice.
A Purchase Order tells the vendor to put the purchase order number on the packing slip and exterior shipping label. That tells Central Receiving who to call so the items can get to you as quickly as possible.
A Purchase Order informs the vendor of Loyola’s 4% state sales tax exemption, and that we only have to pay the 5% city tax. The 4% state sales tax exemption saves the University and your department a significant sum of money each year.
Purchase Orders identify Loyola as a non-profit and Federal Excise Tax Exempt under Section 501(c) (3). Additionally as a non-profit many vendors give us substantial price discounts on products and services when a purchase order is used.
A Purchase Order creates a contract between Loyola University and the vendor.
Purchase Orders specify inspection of products and services and rejection and replacement of those products or services if they do not conform to your standards, and replacement is at the vendors’ expense.
Purchasing assists departments with acquiring best prices for purchases.
Purchase Orders can require a receiving report before payment is made. So the invoice won’t be paid unless you have the merchandise.
Purchase Orders allow for easier ordering, receipt of product and payment tracking.
Purchasing negotiates pricing with new and current vendors.
Purchase Orders created for computer purchases require the approval of IT. IT reviews purchases for appropriate configurations and warranties. For example buying a computer from Dell with a Purchase Order carries a better maintenance agreement and price than if the computer was bought in a store. If a tech from IT works on a store bought computer, generally that will invalidate the warranty, whereas if the computer is bought on a Purchase Order the techs can work on them without invalidating any warranties.
Opening a blanket Purchase Order, with an approved vendor for example, saves you the 4% state sales tax, makes online ordering simpler, does not require immediate payment, and may result in free, next-day shipping.
Opening a Purchase Order makes paying the invoice much easier; the money is already on hold to be paid to that vendor. All you have to do is sign the invoice and put the Purchase Order number that you want to use on the invoice and Finance takes care of the rest. This saves time.
Purchase Orders also create an easy to read paper trail in the departmental budget. On the F23 screen in FRS any payments against the Purchase Order will list the Purchase Order number, vendor name, and dollar amount. This makes determining how department funds are being spent much easier because the Purchase Order will have a description of what is being purchased, where a check request only lists the vendor name and dollar amount, no description when you view the F23 screen.