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How to allocate costs against a purchase order

Use any of three starting points to link supplier costs to PO lines and check the remaining commitment.

Written by Ben Walker

Allocate a supplier cost to the purchase order lines it draws down. A cost can link to one or more purchase orders.

Choose a starting point

  • From the project: open Costs, select Add Cost, and choose the relevant purchase order while entering the cost.

  • From the purchase order: open the PO and select Create Cost to record a supplier claim against it.

  • From a supplier invoice or receipt: drag the file onto the project’s Project Costs table. After processing, open the cost and link the PO manually.

Link and map the purchase order lines

  1. On the cost, select Link Purchase Orders.

  2. Select the purchase order or orders that this cost should draw against.

  3. Choose how to link the lines:

    • Adopt the purchase order lines replaces the cost’s unlinked lines with the selected PO lines, already linked.

    • Keep this cost’s lines retains the invoice lines and lets you choose the PO line each one draws down.

  4. If keeping the cost’s lines, use Draws down to pair each applicable cost line with its PO line.

  5. Select Link, then check the cost lines and totals.

Linking does not change the supplier invoice value. The mapping dialog states that each pairing claims up to the smaller of the cost line’s value and the PO line’s remaining amount; any excess stays off the PO and is confirmed at approval.

Keep the invoice’s lines and choose which PO line each one draws down.

Review and approve the cost

  1. Check PO remaining for each line. If a line exceeds the available amount, review the allocation. Where the invoice genuinely spans multiple PO lines, split the cost into lines and assign the appropriate PO line to each.

  2. Check the cost’s task allocation. For example, allocate the cost to the same Contract Documentation task as the PO.

  3. Check account and tax selections, then submit or approve the cost according to your permissions.

If your organisation requires PO allocation before approving a cost, every valued line on a PO-linked cost must draw down a PO line. See How to require PO allocation before approving a cost.

Check the result

Return to the project’s purchase order list. For example, a $6,000 PO shows $3,000 drawn and $3,000 remaining after approval of a $3,000 supplier cost. Open the drawn amount to inspect the linked cost.

Creating or approving a cost in Drum and sending a bill to Xero are separate actions. Account mappings are required for the Xero bill integration.

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