One of our students asked if there is a standard practice for when to issue an official change order rather than simply making the change to an existing purchase order.

Don’t miss updates on Procurement & Supply Chain, Subscribe here!

Actually, there are no standard rules for a change order vs. amended P.O. across companies. A lot of it depends on your company’s own systems and procedures as well on any contractual requirements your company may have agreed to with its vendors.

If I had to make a recommendation on some guidelines where there are no system/procedure/contract constraints, I’d say that numeric changes, such as to price or quantity, can be done by changing the P.O. as long as you have clear communication of the change with the supplier. Most times, these changes are easily communicated verbally and are often just made so that there are no hang-ups when the supplier’s shipment or invoice arrives.

Any major change to the items ordered or the scope of work can be done on a change order. In my opinion, change orders generally imply that something major has changed.

Many purchase order systems track the revisions of the order, which can be helpful if there are a lot of changes after the original order placement and you find yourself trying to later do an autopsy on a messed up situation.

Do you find this type of information helpful for your job? Then our online class “Mastering Purchasing Fundamentals” may be a good fit for you.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

More Posts