Auto purchase order: what a repair shop's parts order must include

In brief, an auto purchase order is a written order a repair shop sends a parts supplier, naming the vehicle, the part numbers, the quantities, the price and when the parts must arrive. A generic purchase order template misses several things a shop needs, such as the VIN, the repair order reference and core charges. This guide shows what to add, with a filled-in example and the rules that protect the buyer.

What is an auto purchase order?

An auto purchase order is a purchase order a repair shop, dealer or fleet sends a parts supplier to buy parts for a specific job or for stock. A purchase order is a buyer's written request for goods at stated quantities and prices. The auto version adds vehicle and part detail so the right part arrives.

Shops use a purchase order when they want a written record of what they ordered, at what price and by when. Phone orders get disputed. A written order does not. The post Purchase order sample: format, fields and a worked example covers the general layout.

What an auto purchase order must include

A repair shop's parts order should carry every detail the supplier needs to pick the right part. Add the vehicle fields to the standard buyer, supplier, number and total fields.

A core charge is a deposit a supplier adds to the price of a remanufactured part, refunded when the buyer returns the old part. Showing it as its own line keeps the unit price honest and makes the refund easy to claim.

Auto purchase order example

The example below is a brake job order from a small repair shop. All names, numbers and prices are illustrative.

The core charge of $45.00 comes back as a credit when the shop returns the old alternator, so the net cost of the order is $331.00 once the core is returned. Sales tax is not shown because it depends on the state and on whether the shop buys the parts for resale. Confirm that with your state tax agency.

Stock orders and job orders

A repair shop places two different kinds of parts order, and each needs a slightly different PO. A job order is an order for parts to complete one customer's repair, so it carries the repair order number and the vehicle. A stock order replenishes shelf items such as filters, wipers and fluids, so it carries no vehicle but may list a reorder level.

Keep the two apart in your records. When a part appears on a job order, its cost belongs to that customer's repair. When it appears on a stock order, its cost goes to inventory until the part is used.

From PO price to customer price

The price on your purchase order is your cost, not the price the customer pays. Markup is the amount a shop adds to cost to reach the selling price, usually expressed as a percentage of cost. For example, a set of pads that costs $68.00 and carries a 40 percent markup sells for $95.20.

Keep the PO price and the customer price in separate documents. The PO goes to the supplier. The customer sees the repair estimate or invoice, which can show the part, the labor and the markup you apply. Do not send a customer a copy of your purchase order, since it reveals your cost.

Returns and core tracking

Returns go wrong when nobody tracks what was sent back and when. Use this routine for every core and every return:

1. Write the PO number on the old part's box or tag.
2. Log the date the core goes back to the supplier.
3. Ask for a credit note or credit line on the next statement.
4. Check the credit matches the core charge on the PO.

If a core credit has not appeared by the time the next invoice arrives, ask the supplier for it by PO number. A shop that records the core charge on the PO has the exact figure to quote.

Some orders also need an approval step. A simple rule, such as "any PO above a set amount needs the owner's initials", stops mistakes before they reach the supplier. Set the amount to suit your shop.

Can the supplier hold you to the order?

A signed or confirmed purchase order can make the order binding. In the United States, UCC section 2-201 says a contract for goods of $500 or more cannot be enforced without a writing that shows a contract was made and is signed by the party against whom it is enforced. A small order like the example is below that line, but a larger fleet order is not.

Between merchants, a written confirmation sent within a reasonable time can satisfy the same rule unless the recipient objects in writing within 10 days of receiving it, according to the same UCC merchant confirmation text. Send the PO to the supplier and ask for a written acceptance. This is general information, not legal advice.

Inspect parts before you pay

Check parts against the PO before they go on a customer's car. Under UCC section 2-513, a buyer generally has the right to inspect goods at a reasonable time and place before payment or acceptance, unless the parties agreed otherwise or the sale is cash on delivery. A shop that fits a wrong part has lost an hour and a customer's trust.

Use this receiving checklist:

1. Match each part number on the box to the PO line.
2. Check quantity and condition.
3. Check the core charge appears once and is not doubled.
4. Log the PO number on the supplier's delivery note.
5. Photograph damage before signing.

If a part is faulty, tell the supplier promptly. UCC section 2-607 says that after accepting goods, a buyer must notify the seller of a breach within a reasonable time after discovering it, or lose the remedy. Note the date you found the fault on the PO.

Match the PO to the supplier's invoice

The supplier's invoice should quote your PO number and match the order line for line. In the UK, GOV.UK's list of invoice details says an invoice needs a unique number, a description of what is charged and the amount owed, which is a sensible check for any country. Pay only when the quantity and price on the invoice equal the PO and the delivery note. The sales order vs invoice guide shows the supplier's side of the same order.

For example, if the supplier invoices two rotors at $54.50 but sends one, short-pay the difference and ask for a corrected invoice or a credit note. Keep the PO, delivery note and invoice together for the job.

Create an auto purchase order

You can adapt the tables above in a spreadsheet. Invoqk's purchase order generator numbers the order, totals the lines and exports a PDF, and you can add the vehicle and RO details in the line descriptions. Corrections to any rule above are welcome through the Invoqk contact page. For the full order layout, see how to create a purchase order step by step.