Should You Use a Purchase Order System?

That’s a great question.

The majority of churches use a Purchase Order (PO) system. One where most purchases have to be approved. But, why?

I think most believe it’s a good financial control.
They think they have to – a necessary evil. (But, secretly, they hate it).
Lastly, the good ole “we’ve just always done it that way.”

I’d like you to rethink whether or not a PO System as described above really serves your best interest.


Three Reasons.

1. Pastors and Staff HATE using a PO System

Let’s face it. A PO System is burdensome. Especially when the floor amounts are set low to where almost all purchases require a PO. (That’s because most purchases are really small and/or the person at the top is a control freak).

The typical PO requires the following:

Submit a Requisition
Await Approval
Create and issue a PO, send to vendor
Process the receipt of goods/services against the PO

Yes, there’s lot of data churches could use/gather from PO’s, but most don’t take time to gather/analyze. Why? It’s just more work.

Because of the steps required, Pastors/Staff abhor PO’s ( really, it’s because it takes time away from ministry).

2. It Slows Everything Down

This is really an extension of #1, but when everything has to go thru someone else, and for a lot of churches – an outside committee, there’s an unnecessary wait time. Submit a request, set it aside, pick it back up, follow up if needed and ultimately make the purchase.

3. It’s a Bureaucratic System

Inherent in this system is that it places decision making at the “top”. It’s a top down approach. All authority rests with someone typically not intimately familiar with each ministry head’s goals or budget.

It communicates “we don’t trust you to make the right decisions” – even if that’s not true.

|A Different Path|

Most churches have a spending budget that was prepared by the ministry heads. Why not put the decision making/authority with the ministry heads? Allow them to manage spending to their budgets (which were already approved) and hold them accountable to that?

Supplement this by putting a couple things in place around:

1. Vendor Selection

Issue Purchasing Principles

Seek balance between quality, dependability and price
Require a bid process where makes sense to do so
Require advance approval over a pre-determined amount

I’d suggest an annual review of recurring purchases as well based upon Principle #1.

2. Adding New Vendors

Instead of having a system that approves purchases at the top, have a system that requires the Admin/XP or Pastor (someone on staff), to review proposed new vendors. This will be far less repetitive, guards against fraud (adding fictitious vendors) and assures adherence to Principle #1 throughout the year.

* The Bottom Line

This “different path” puts trust, authority and accountability where it belongs and speeds up the process thus allowing for more time in actual ministry.