Connecting Purchase Orders to Contractor Billing
Invoices that do not match a valid purchase order get stuck. Here is how to connect POs to contractor work so billing goes through the first time.
Many clients will not pay an invoice unless it quotes a valid purchase order. For agencies and teams billing contractor time, that makes the PO more than paperwork. It decides whether an invoice is processed this week or sits in a client's accounts payable queue while someone asks for the right reference.
This article explains how to connect purchase orders to contractor billing in practice, the common problems to avoid, and how purchase order tracking is being added to JN Tempo as part of the V2.0.0 rollout.
Why purchase orders cause billing delays
Most PO problems are not about the order itself. They come from the information around it being out of date or held by one person. The typical failures below are all preventable if the PO is recorded properly and linked to the work it pays for.
- The invoice quotes an old PO that has been replaced.
- The PO has expired, but nobody noticed until the invoice was rejected.
- The remaining value on the PO is lower than the invoice total.
- The PO covers one placement, but the hours are billed against another.
- The PO document is in someone's inbox and nobody else can find it.
Link each PO to the right placement
A purchase order usually authorises a specific piece of work. For contractor billing, that typically means a placement or a group of placements for one client. Recording the link explicitly means that when hours are approved, you already know which PO they should be billed against.
Where a client issues one PO for several contractors, record that relationship rather than copying the PO number onto each contractor by hand. Where a contractor moves between projects with different POs, make sure the timesheet project matches the right order. Getting this right at setup avoids manual matching every billing period.
Track remaining balance and expiry
A PO normally has a value and an end date. Both matter. If approved hours keep accumulating against a PO without anyone watching the balance, the first sign of trouble is an invoice the client cannot process.
Make the remaining balance visible to the people who manage the placement, not only to finance. Agree a threshold at which someone contacts the client about an extension or a new PO, well before the balance runs out. Do the same for expiry dates. A short reminder a few weeks before the end date is far easier to act on than a rejected invoice after it.
Keep the PO document with the record
The PO number is not always enough. Clients sometimes include terms, rate details or specific invoicing instructions in the PO document. Store the document alongside the record so anyone preparing an invoice can check it without asking around.
It is also worth recording who at the client issued the PO and who should receive invoices against it. When a PO needs extending, you then know exactly who to contact.
Decide who can see and change POs
Purchase orders contain commercial information. Not everyone who approves timesheets needs to edit PO details. A sensible split is that admins and finance can create and change POs, while managers can see the POs relevant to their contractors, with edit rights only where your process needs it.
Whatever split you choose, make it deliberate. Changes to a PO value or end date should be traceable, so if a billing figure is questioned later you can see what the PO said at the time.
How this fits into JN Tempo
Purchase order tracking is part of the V2.0.0 rollout and is not yet listed on the live product site. As planned, POs will be linked to contractors and placements, with PDF attachments, remaining balances and expiry warnings, and manager read and write permissions that admins control.
It is designed to work alongside contractor billing, which is also being rolled out. Billing is planned to support weekly and monthly schedules, payment due reminders, approved hours with approver details, rates, currencies and totals, with optional PO references. The aim is that the PO, the approved time and the billing record sit together rather than in separate places.
Until those features reach your account, the same principles apply in whatever system you use today. Keep a single list of active POs, link each to its placements, and review balances and expiry dates on a fixed schedule.
A simple PO checklist
Use this list before each billing run, whatever system you use. You can follow the rollout and start a free trial of the current product at jntempo.jnhorizon.com.
- Record the PO number, value, start date and end date.
- Link the PO to the placements and contractors it covers.
- Attach the PO document.
- Note the client contact who issued it and who receives invoices.
- Set a balance threshold and an expiry reminder.
- Review active POs before every billing run.
See how JN Tempo handles it
Timesheets, approvals, expenses and reporting for teams that work with contractors.