Lifecycle of purchase orders in Payhawk

Purchase orders (PO) help companies apply a transparent procurement process and efficiently manage their expenses.

Actions for Payhawk administrators

The Settings > Purchases menu is intended for Payhawk administrators and contains the General, Receipt note, and Rules tabs:

The General tab enables you to define the basic configurations for the purchase orders.
The Receipt note tab enables you to define the expense categories that will require a receipt note, which will, therefore, trigger a two- or three-way matching for these categories.
The Rules tab enables you to define the discrepancy thresholds which, if exceeded, will trigger your pre-defined approval workflows for expense types related to purchase orders. You can also define that purchase orders are automatically closed upon default conditions.

Payhawk administrators can control the categories that are displayed under the Purchases > Receipt note tab from the Expense fields > Built-in fields > Categories settings.

From the Workflows menu, Payhawk administrators can define the roles, people, or the amount-based approval chain for approving purchase requests.

Payhawk administrators define the approval workflow for initiating payments for expense types related to purchase orders from the Expense types workflow settings.

Actions for employees

From the Purchases app, employees can create purchase requests, submit them for approval, upload receipt notes and invoices to purchase orders and monitor the progress of the delivery and purchase order itself.

Before creating a purchase order at Payhawk, employees create and submit a purchase request which is then approved according to the pre-defined approval workflows at the company. Upon approving the purchase request, the purchase order is automatically created and can be sent to the supplier, requesting the delivery of goods or services.

Depending on their status, purchase requests can live under the Draft, Returned, or Pending approval tabs. Once the request is approved, the purchase order is created and resides under the Open or All tabs.

The Draft tab contains the newly created purchase requests before they are submitted for approval. Only a draft purchase request can be deleted by the requester.
The Pending approval tab contains the purchase requests that were submitted for approval but are not approved yet.
The Open tab contains the automatically created purchase orders after the approval of the purchase request.
The Returned tab contains the purchase requests that have been returned by the approver requesting additional details or updates.
The All tab contains all purchase orders and purchase requests except for the rejected and deleted ones by the approver.

Actions for approvers

The approvers of purchase requests receive notifications in their Inbox and can manage the request in any of the following ways:

Approve the purchase request.
Return the purchase request to the sender with the additional details they require.
Altogether reject and delete the purchase request providing the reason for that.

Two- and three-way matching

Upon receiving the supplier invoice (and receipt note, if applicable), the Payhawk system cross-references the documents for discrepancies.

Payment

Based on the defined discrepancy thresholds, it triggers the discrepancy approval and payment workflows. If there are no discrepancies between the purchase order, supplier's invoice, and receipt note if required, the payment to the supplier can be initiated.

The separate approval workflows for invoices linked to purchase orders can be defined from the Settings > Workflows > Expense types section.

Summary of milestones and roles

The following table summarizes the milestones for purchase orders and the responsible role or person for the step.

Milestone	Responsible role or person	Details
Creating purchase requests	Requester	From the Purchases app.
Deleting purchase requests	Requester	From the Purchases > Draft tab. Purchase orders can only be deleted before being submitted for approval.
Submitting purchase requests for approval	Requester	From the Purchases > Draft tab.
Approving, returning, or rejecting and deleting purchase requests	Approver	The link in the email request provides direct access to the Purchases app. Approvers are defined through the Settings > Workflows configurations.
Defining the approval workflow	Payhawk administrator	From the Settings > Workflows configurations.
Setting discrepancy and auto-close rules	Payhawk administrator	From the Settings > Purchases > Rules tab. Discrepancy rules can be defined for amounts.
Uploading receipt notes	The requester or other authorized users.	Receipt notes are uploaded from the Purchases app.
Uploading supplier invoices	The role or person is based on the Payhawk expense type visibility settings.	Invoices for the created purchase order expense can be uploaded directly from the Expenses app or from the purchase order itself in the Purchases app. Payhawk automatically extracts the number of the purchase order if stated on the invoice. If not, it has to be manually linked from the expense.
Approving payments for supplier invoices	According to the Payhawk workflow configuration settings.	The payments for the invoices that have been uploaded are approved by following the defined approval workflow for the expense types at the company.
Closing purchase orders	Payhawk administrator	The closing of purchase orders takes place on the two- or three-way matching before the invoice is paid. Purchase orders can be set to close automatically, or can be closed manually.