Sub Specialty Contractor

How does everyone else's company's purchasing departments handle ordering lots, hear packages, fixtures, etc?  I come from the distribution space where all purchase orders are itemized and what you order and what you get are easily defined and itemized, but what I keep being told is that in construction there are "lot" orders that are far too complex or difficult to itemize.  My question is how does a purchasing/warehouse/accounting team know if we got what we're being charged for?  Does this scenario sound legit to anyone else?  I am told this is extremely common in the construction field

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Will Coburn
Director of Accounting
Excel Services
Louuisville KY
(502) 413-5402
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Hi Will, 

Itemizing purchase orders in construction can sometimes be a challenge, but extremely helpful when able. Ways our customers have found to overcome this are to populate POs with material take-off information from a built-in estimation module or via an integration with external take-off software. Additionally, we've seen them leverage AI tools to read vendor quotes and order acknowledgements to auto-itemize the PO. This allows PMs and Purchasers to obtain nicely itemized POs to facilitate proper receiving, inventory, and bill reconciliation workflows.

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Ian Wagner
Financial Consultant
TRUE: Construction Software for Subcontractors
www.constructtrue.com
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Will,

There are standard accounting procedures that you are probably accustomed to, such as matching a packing slip to the PO, someone counting what was delivered for accuracy, then pairing the invoice to the PO and packing slip.  You need a system to inventory the stock then cost it to jobs when pulled from stock.  This all takes an investment in time and technology, and commitment to the process.  For contractors that don't need to carry a large stock, the more typical approach you refer to is purchasing material for a project, costing it to that job, and any excess is returned to the shop for future use (but not formally tracked).

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Jeffrey Michael CPA CCIFP
CFO
Cippco, Inc.
Philadelphia PA
(215) 335-1401
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