Manage or Change a Purchase Order
In order to modify information on a previously dispatched purchase order (PO), a change order should be initiated in Accounting and Reporting at Columbia (ARC).
While most change orders require University-level (central) approval, those meant to change POs for University-wide Purchasing Agreements (UwPA) and/or those meant to decrease a PO amount do not.
Be advised, if you have ordered from the CU Marketplace, you cannot initiate a change order.
Financial Change Orders
A financial change order is a change order that does not alter the scope or terms of the PO, such as updating a ChartField or distribution. They do not require the involvement of or approval from the Purchasing department because such modifications to encumbrances or other accounting information do not change either the value of the PO or its terms. A financial change order bypasses approval by the Purchasing department and is reflected on the unit’s financial reports in ARC.
Price/Quantity Change Orders
A price/quantity change order is a change order that alters the scope or terms of the PO, such increasing the quantity of goods or the terms of a service being purchased or an increased dollar amount above the allowable threshold. They do require the involvement of or approval from the Purchasing department because such modifications do change the value of the PO or its terms.
Be advised, financial change orders are only allowed on autosource POs.
The current total amount of the PO, regardless of payments.
In purchasing, an encumbrance is an amount for which there is a legal obligation to spend in the future. A purchase order is a typical encumbrance transaction. Once funds are encumbered, the department should make an entry on their budget so as not to overdraw. Encumbrances are comprised of all approved and pending for approval requisitions, purchase orders, and supplier invoices.
Total AP Payments
AP Payments made to date plus all open invoices that are currently in ARC.
Change orders are the proper method for requesting the following changes to a purchase order:
- Increase/decrease the value of a PO
- Modify the Open Commitment of a PO
- Change the distribution of funds between ChartFields associated with a PO and establishment of new ChartFields associated with a PO
- Close a PO
- Reconcile PO value to payment
- Change contract dates
- Change ship-to or bill-to information
Be advised, you cannot create a change order for purchases made in the CU Marketplace.
Requestor of the Change Order
Initiates change order by inputting information into ARC, providing explanations, and required supporting documentation to articulate a rationale for the transaction.
Approves the validity of the change order request in ARC, both from operational and financial criteria; and verifies that supporting documents provide sufficient detail.
Central Purchasing Approver
Reviews the original purchase order and validates that the requested change is in compliance with the terms of the original purchase order and that supporting document(s) are sufficient; approve the change order request; convert the change order request to an updated purchase order.
- When creating a new change order it is important to provide a clear and valid justification to assist the Purchasing Office in assessing the request to process accordingly. See Change Order Justification Requirements available below in the Resources section.
- Once funds are encumbered, make an entry on the budget to reduce unallocated funds, so as not to overdraw.
- When a PO has been overpaid, correct the value of the PO without increasing the Open Commitment; if the overpayment applies to more than one ChartString, fix the overpayment in each individual ChartString.
- When a PO is no longer needed, clear the unused PO value and unspent dollar value (open commitment).
There is an allowable tolerance for the total payment amount to be greater than the total purchase order amount. This variance allows for items such as shipping charges and small incidental fees that may not have been anticipated when the purchase order was originally created. Above these thresholds, however, a change order is required to increase the value of the original Purchase Order. ARC maintains a table of these tolerances. When entering a payment, the system will indicate if the payment is within tolerance and processing can continue. If the payment is not within tolerance, ARC will not allow payment processing to continue. This tolerance level does not apply to (and is not limited to):
- Catering (on-site)
- Maintenance and repair services
Change Order Variance Thresholds
- $ Range
- All dollar values
- % Cap
- $ Cap
- Applicable to most good purchases
For information on change orders, see the University’s Change Order Policy.
- Creating Change Orders (job aid)
- Creating Requisitions and Managing Purchasing Orders (web-based)
- Purchasing Basics: Part II - Receiving, Purchase Order Vouchers, Change Orders (instructor-led)