How to track purchase orders against a project budget
Mike Demo, Founder · 17 October 2026
A budget tells you what you planned to spend. Purchase orders tell you what you have promised. Invoices tell you what you have spent. You need all three, side by side, for every project.
Three numbers for every project
- Budget
- What the project is allowed to spend.
- Committed
- The total of every PO and work order raised against it.
- Spent
- Vendor invoices approved against those POs.
Committed is the number most teams skip, and it is the one that warns you first. If committed is already above budget, the project is over before a single invoice arrives.
Track the line, not just the PO total
A PO for 120 site visits at $450 is only on track if you know how many visits have been billed. Tracking each line catches a rate change or a quantity overrun on one line while the PO total still looks fine.
When the scope changes
- Revise the PO, don't replace it. Raise or lower a line, add one, or move the end date, and keep the history so anyone can see what was originally agreed.
- Treat blanket POs and annual agreements by period. Know when each period ends and renew it on purpose, not by default.
When will the budget run out?
Take what is left and divide it by how fast you have actually been spending, say over the last 90 days. That gives you a month. If nothing has been spent recently, don't guess: a run out date built on no spend is fiction.
Look at each vendor across every project
When the same contractor works on three projects, you want one total: what you have committed to them, what you have spent, what you owe, and whether you pay them on time. That is the number your vendor sees, and it is the one that matters in a renegotiation.
Month end: accruals
Work gets done before it gets invoiced. For each line, record how far along the work is, as a percent complete or units done, and compare what has been earned with what has been invoiced as of the close date. The difference is your accrual.
Where a spreadsheet breaks
A spreadsheet works for one project. It breaks when POs are revised, invoices arrive by email, and three people keep their own copy. The signs are familiar: committed numbers that don't match accounts payable, and surprises at month end.