Key takeaways:
- Work orders and purchase orders have different purposes in the maintenance process.
- Purchase orders are often legally binding.
- Determining which to do first depends on your needs and the policies of your organization.
- Automation through a CMMS simplifies work order and purchase order creation and management.
Maintenance professionals deal with many moving parts in their day-to-day work, but you’ll often encounter two items: the work order and the purchase order. Both have their role in moving repairs along in a timely manner. But when do you use each? And what does each really do?
In this article, we’ll go into detail so you’ll know exactly what each offers.
What is the difference between purchase order and work order?
The main difference between a work order and a purchase order is that a work order authorizes internal teams or vendors to complete a specific task or service, while a purchase order authorizes the purchase of goods or materials from a supplier. Work orders manage tasks; purchase orders manage inventory and procurement.
What is a work order?
A work order, or WO, is an internal document that outlines instructions for a maintenance job. It serves two purposes: it authorizes the work in organizations that require advanced approval and explains what’s to be done.
Work orders include essential information like:
- The size and scope of the work
- Location of job
- Work milestones, goals, and deadlines
- Resources required (special equipment or supplies, either rented or purchased)
- Assigned personnel
- Safety protocols, such as the use of personal protective equipment (PPE) or lockout/tagout (LOTO) procedures
The work order formally triggers the start of work. Once it’s issued, maintenance teams can begin the work to gather supplies, plan their specific tasks, and schedule work. Work orders help organizations track progress, labor hours, and material usage, too.
What is a purchase order?
A purchase order, or PO, is a legally binding document given to a third-party supplier or service provider by a buyer of their goods or services. It provides clear communication about important details, such as:
- How many and what type of item or service
- Agreed-upon prices for each item and the total cost
- Expected delivery date or estimated job completion times
- Payment terms, such as net 30, net 60, or due upon delivery/completion
- Additional details about the supplier and the buyer, such as contact details
Each PO has its own PO number—a unique identifier others can use for future reference in communications.
Once a supplier accepts a purchase order, it becomes a contract. Both parties involved can refer to it for details of the agreement and to be accountable to one another. Purchase orders simplify invoice matching and may prevent duplicate orders.
Which comes first—work order or purchase order?
In a typical maintenance situation, the work order comes before the purchase order process. It outlines all that needs to be done, as well as the resources needed to do the work. Only after the work order is filled out can a company create a purchase order for the service and materials. Or, if the company does its own maintenance work, they fill out the purchase order for just the supplies and materials.
Here’s an example: The head of a department fills out a work order to fix a leaking pipe. If they hire out for the job, they issue a purchase order for the service and parts. If they handle their own repairs, the purchase order would just be for the parts.
Are there ever exceptions? Yes. Depending on how often a maintenance task happens, a company may pre-purchase the parts with a purchase order. Then, they only have to fill out a work order when the time comes to install it. Maintenance parts like filters fall into this category, as it’s common for a company to use a purchase order to buy the filters in bulk before issuing the work order to replace them.
Another way to look at things is through the lens of reactive or proactive maintenance. Is the item broken and something that you couldn’t plan for? Then it’s reactive, and you aren’t likely to have parts on hand from a previous purchase order. The work order comes first.
Proactive maintenance may take the opposite approach, ordering the expected parts ahead of time with a purchase order. Then, a work order gets filled out each time those parts need to be used.
Purchase order vs work order: How do they differ?
The key differences between purchase orders and work orders include:
- A work order authorizes the type and scope of the job
- A purchase order authorizes the buying of items and services
A single maintenance task might need both. The WO says, “Here’s what we’ve agreed to do,” and the PO says, “Here’s the supplier we’re using and how much we’re going to spend.”
How to create and maintain work orders
To make a work order, have the details of the task ready, along with the timing and resource goals for the job. Then, you can more easily fill out the work order according to your company’s policies.
For example, a supervisor who needs a valve replaced on a water line could follow these steps:
- Use a template from within the maintenance software system to start a work order. If one isn’t available, refer to a past work order for details.
- Create and attach a checklist of steps to be done, along with any special safety considerations, such as wearing PPE.
- Assign the work to an internal technician and provide a timeline for completion.
- Send out the order and schedule a time to follow up on the completed work.
If you use maintenance software and it’s a regular job, you might set up a recurring schedule for the same job so you don’t have to make a new work order each time. Or, use a computerized maintenance management system (CMMS) that triggers work orders tied to certain events, like low inventory stock, time passed, or machine sensor data.
How to create and maintain purchase orders
Purchase orders look a little different at each organization, but most are created using these basic steps:
- Use a template from within the maintenance or financial software system to start a purchase order.
- Include essential details, such as the vendor name and address, item description, quantity, price, payment terms, and delivery schedule.
- Include a unique PO number.
- Send to the proper department for approval.
To maintain the purchase order, review it regularly to ensure the vendor delivers on time. An automated system can help keep tabs on POs and even create new ones as needed to reduce manual labor. For example, when the supply of furnace filters gets low, the small number in the inventory triggers a new PO so another order can be placed.
Manage work orders and purchase orders with ease
Creating and tracking hundreds of orders can be a full-time job. With modern CMMS like MaintainX, you can use automation to your advantage and spend more time doing human work like overseeing personnel and troubleshooting repairs. Automation uses triggers to create new POs when materials are low, sensors detect wear, or there’s a new work order. It also creates WOs on a maintenance schedule. When the PO is fulfilled, the WO status updates right away, reducing the need to follow up in person with the maintenance team.
Order automation reduces hassle and gets you on track quicker than manual methods.
Schedule a demo of MaintainX to see this innovation in action.
FAQs on Work Order vs Purchase Order
How do I create a work order?
You can create a work order (WO) after your work request has been approved by the maintenance supervisor. Include the task description, supplies or tools required, personnel, and deadlines. Use a CMMS to save time and automate the creation and ongoing management of the WO.
How do I create purchase orders?
Once your WO has been approved, decide what parts, tools, or services you want to purchase to fulfill it. Pick a vendor from your approved list and check their payment terms. Create the purchase order (PO) with prices, quantities, payment terms, delivery dates, and a PO number. Send to the vendor and track fulfillment manually, or save time with a computerized maintenance management system (CMMS).
Can a work order include a purchase order?
A work order can include a purchase order, but it’s more likely to reference a separate purchase order number. However, companies often create work orders first, so they may not have a purchase order created yet to reference.
Who approves work orders and purchase orders?
Generally speaking, maintenance managers or supervisors approve and sometimes even create work orders. Purchase orders come from the purchasing department, usually after they approve a request from a different department.
Are Purchase Orders legally binding?
Yes, if done correctly, purchase orders (POs) offer the terms for a legally binding contract. Once accepted by the vendor, they require both parties to follow the agreed-upon terms without a separate contract.
Do purchase orders expire?
Yes, because most purchase orders (POs) have a set timeline for purchase and delivery. If the deadline has passed, reach out to the vendor to ask for an extension under the same terms. You may not have to create a new PO.
The MaintainX team is made up of maintenance and manufacturing experts. They’re here to share industry knowledge, explain product features, and help workers get more done with MaintainX!
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