The purpose of this policy guideline is to define when a purchase order is to be used to procure goods or services.
Purchase orders are established for all major Macalester College purchases. Major purchases are classified as $10,000 and over. This also includes cumulative payments totaling $10,000 associated with a single project. The use of purchase orders creates an additional level of safety for Macalester College, departments and employees in regards to liability, negotiating and leveraging with the vendor.
Importance of using a purchase order
- Contractual risks and uncertainties are minimized
- Suppliers are obliged to operate in accordance with our Purchase Order Terms and Conditions unless other special terms have been negotiated
- Expenditure is approved in accordance with authorized approvals process
- Purchase order process enables us to capture and categorize our spending in a uniform and accurate manner
Benefits of using a purchase order
- Commitment information is reflected on finance reports
- Budget review reflects encumbrance upon initiating purchase requisition
- Enables department to track purchase requisition from purchase-to-payment
- Faster turnaround on payments to vendors
- Improved procurement information
Examples of Commodities
| Purchases Over $10,000 | Purchases Under $10,000 |
| (Always use PO) | (May use PO if desired – Consider Using Pcard) |
| Vehicles | Office supplies |
| Building projects | Conference fees |
| Services under contract | Food and catering |
| Furniture and office equipment | Instruction/lab supplies |
| Computer hardware and software | Equipment under $10,000 |
| Electrical and mechanical equipment | Travel expenses; air, hotel, taxi, meals |
U:1/2011