When to get a purchase order before buying job materials

Get a customer purchase order (PO), or clear written approval, before ordering custom materials, committing to a large purchase or buying extras outside the agreed scope. Then use your own supplier PO to record exactly what you are buying. For routine, low-risk purchases, a simpler written ordering record may suit your business, provided it meets the relevant contract and customer requirements.

The catch is that these are two different approvals. A customer's permission to proceed and your instruction to a supplier should not get muddled together. This guide suggests a purchasing process, not a rule that every Australian trade job requires a PO. It is general information, not legal, tax or financial advice.

Whose purchase order do you need?

Think about which side of the purchase you are on:

• Your customer's PO: the document you ask the customer to issue when their purchasing process requires one. Check that it matches the work, price and scope you agreed.
• Your supplier PO: the order you issue when your business buys materials. Record the supplier, job, items, quantities, price and delivery instructions.
• Your internal approval: your decision about who can commit business money. Set this before staff start ordering on your account.

As a working distinction, treat a quote as the proposed scope and price, customer approval as permission to proceed, and the supplier PO as the purchasing instruction. Do not treat a supplier quote alone as evidence that your customer approved the spend.

Keep the customer-facing scope clear first. If that is the weak point in your process, start with quoting for trade jobs before adding another purchasing form.

When should you stop and get written approval?

Use this decision checklist before placing an order. These are suggested business controls, not legal thresholds.

Before signing a contract or placing an order, Commonwealth guidance from business.gov.au recommends checking the supplier, including legitimate registration and a search of the Personal Property Securities Register.

For everyday purchases, set a spending limit that fits your business rather than borrowing someone else's dollar figure. Make custom items, scope changes and unfamiliar suppliers exceptions that need your approval regardless of price.

What should your purchase order template include?

Copy these fields into your own document or purchasing system. This is a practical starting template, not an official government form or a complete contract.

Check the PO against the supplier quote before sending it. Pay particular attention to units: a box, an individual fitting and a metre are not interchangeable order quantities.

Ask the supplier to confirm availability and delivery timing. Your requested needed-by date should not be treated as confirmation that the supplier can meet it.

Commonwealth business.gov.au guidance on written supplier terms recommends covering goods or services, price, payment, timeframes, delivery, quality, warranties, insurance responsibilities, disputes and termination or exclusion clauses. Keep the PO connected to those agreed terms rather than expecting a short order form to cover everything.

Is verbal approval, a quote or a deposit enough?

For routine purchases within an agreed internal spending limit, you might allow staff to proceed after a conversation. Still record the job, items, price and person who approved it. That is a suggested operating practice, not a conclusion about whether verbal approval meets a particular contract's requirements.

For customer approval, send a written confirmation before committing to custom materials or extras. Ask for an explicit response to the specification and price, rather than relying on a vague instruction to go ahead.

Treat a deposit and a PO as separate checks: record any payment against the agreed payment arrangements, and record purchasing instructions against the material specification. Do not assume that receiving money settles every detail of an order. This guide does not set deposit amounts or explain state or territory home-building requirements.

Is a purchase order binding in Australia?

Do not assume the heading “purchase order” answers that question. For a specific order, get legal advice about the documents, terms and acceptance involved. The supplied official guidance does not establish a universal rule about when a trade PO becomes binding.

Likewise, do not assume who owns special-order materials if a job is cancelled. Before ordering, clarify cancellation charges, return arrangements, payment responsibility and ownership with the relevant parties. Commonwealth guidance recommends keeping written contracts with associated paperwork for later discussions or evidence in a dispute.

How should you handle extra materials and variations?

Keep the customer's extra-work approval separate from the supplier purchase. The amount you pay for materials is not automatically the amount you should quote the customer for the change.

Confirm the extra scope and customer price before placing the additional order.

Hypothetical example: a customer asks a carpenter to add screening after approving the original scope. The additional supplier purchase is 12 lengths at $50 each excluding GST: $600, plus an assumed 10% GST of $60, giving a $660 supplier total. Assume freight is included for this example.

The carpenter should then:

1. Prepare the customer variation, allowing for the extra materials, labour and any other agreed charges.
2. Get written approval of the variation's scope, total customer price and timing before ordering.
3. Issue a separate supplier PO, or clearly identified revision, linked to that variation.
4. Confirm whether the new order replaces or adds to any existing order.

The $660 is the hypothetical supplier cost, not the customer variation price. Keep both records so the purchasing paperwork does not get mistaken for the agreed sale price.

How do you track the order through delivery and billing?

Use a simple check at each handover:

Check what arrived before comparing the supplier invoice with the order.

1. Ordered: save the PO, supplier quote and approval together under the job reference.
2. Delivered: check quantities and condition against the order. Record shortages, substitutions and outstanding items.
3. Billed: compare the supplier invoice with the PO and delivery record. Query unexplained differences promptly.
4. Paid: keep the payment record with the supplier paperwork.

Under Commonwealth GST guidance, the ATO lists purchase orders, invoices, receipts, delivery dockets and banking records among records that can explain GST transactions. Keep the supporting documents together; do not build your record-keeping process around the PO alone.

If a customer later questions the materials charged, start with the approved scope and variation records. If the issue is simply an overdue customer invoice, use a separate process for following up unpaid invoices firmly.

Where StitchedUp fits in the ordering process

StitchedUp's Creating Purchase Orders feature lets you create and manage POs with suppliers, job links, delivery details, line items and notes, so you can track what you have ordered. You can explore it through the StitchedUp features overview.

Use that record after deciding who can approve the spend and what the customer has authorised. Recording a PO is not the same thing as establishing an approval policy or getting a customer's agreement.

If you only make occasional purchases, a consistent document template and organised folders may be enough. If your main challenge is complex warehouse stock control, assess a dedicated inventory system against those requirements rather than assuming purchase orders cover them.

To start keeping supplier orders connected to your jobs, create your StitchedUp account.