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Date of Purchase Order

What is the risk of a purchase order being raised and dated after its corresponding invoice date?

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Is there any accounting principle which records the timeframe when a purchase order should be raised?

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RLI
By lionofludesch
26th Apr 2019 16:27

No. Purely internal matter.

You can cheerfully make up your own rules.

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By WhichTyler
26th Apr 2019 16:44

It's a risk and control issue rather than an accounting one.

Depending on materiality and frequency, a passing auditor might raise an eyebrow and wonder what other controls are not being properly implemented...

Internal audit would not be pleased

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By johngroganjga
26th Apr 2019 17:07

A purchase order is nothing to do with accounting. It’s to do with internal control and management.

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By bowlsfreak
26th Apr 2019 17:15

Thanks - so is there a risk if dated after a corresponding invoice?

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Red Leader
By Red Leader
26th Apr 2019 17:18

Mismatch?

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By johngroganjga
26th Apr 2019 18:08

Only you, knowing the specifics of your business, can say whether it is a problem.

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Hallerud at Easter
By DJKL
26th Apr 2019 20:35

Depends upon the required authorisation control for the purchase, if the primary control authorising a purchase is at the purchase order stage then completing one after a purchase invoice has been received is akin to locking the stable door after the horse has bolted.

Years ago the firm I was with were an outsourced provider of an internal audit function for a Non-Departmental Public Body, one of the suggestions we made was the purchase authorisation was frankly pointless at invoice stage, by that point the entity has already made the financial commitment.

Also, if lead times, purchase orders are useful to use to monitor department and project budgets, if each order is recorded against a project one can see at a glance where costs run against budget, if purchase invoices used the party responsible for the budget might not be fully aware of cost over runs until post event.

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By paulhammett
26th Apr 2019 19:09

If it’s one-off, move on and don’t worry about it. If it’s a regular occurrence, the internal controls need to be reviewed.

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