When should you post a Purchase Order to the GL?

Posting a Purchase Order to the General Ledger (GL) when you receive it aligns with proper accounting practices and ensures that financial data accurately reflects the company's obligations. At this stage, the inventory and/or expense recognition can begin because the company has confirmed that the goods or services have been ordered and are on their way.

This timing allows the financial system to recognize liabilities for the amount of the order as soon as the purchase becomes a confirmed transaction via receipt. It also provides a clear line of sight into the company's commitments and allows for better cash flow management.

Other options do not fit into this scenario as logically. Posting at the time of order creation doesn't accurately represent the company's current liabilities until there is certainty that products or services will be delivered. Posting before items are shipped fails to consider the timing of receipt, which is when actual goods are involved. Posting after supplier confirmation could be an unnecessary delay, as receiving the order is more precise in establishing obligations.