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.
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.