Purchase Orders

Features of purchase orders:

Purchase orders can be entered manually, but it is also possible to create them using the results of the internal, real-time planning logic of the system, either in bulk (using the automated purchase planner) or by selecting from planned purchases just for one order.
Purchase orders can be created for any item type, but when received, only material items will be received to inventory.
Purchase orders have change control. To change a purchase order, make a new version.
If PartnerNet is used, suppliers can receive and confirm their orders without the use of faxes etc. They can also view inventory quantities of their items and see the future planned activity of these.
Received material value calculations are based on the FIFO principle. It is possible to set a landed cost for an item greater than the items purchase price so that stock item value can include transport and handling costs.
If drop shipment is used from sales orders, the delivery address of the purchase order will be final customer.
A user can be registered on the order to receive an email alert for any received items.

Licensing

The following optional license modules affect purchase orders (See the Admin->Licensing section for more details):

Supplier quotations	Supplier quotations can be used together with the purchase automation system, for instance to prepare purchase orders based on best price.
Purchase planner	The purchase planner will create multiple purchase orders in bulk based on planned purchasing from the real time MRP system.
Multilocation inventory	Purchase orders can be received to other locations than the default location. Drop shipment is supported.
PartnerNet	PartnerNet is a web application that allows your suppliers to manage purchase orders and their confirmation, and also view inventory situation and future activity for items they supply.
Sales/purchase advance invoicing	In the invoice section, allows the user to record prepayments on purchase invoices.
Projects	It is possible to select lines to an order that are required just for a certain project.
Multicurrency	Sets the currency rate when the order is activated.

Creating a new purchase order

To create a new purchase order, either click the ‘New’ button on the main menu, or open an existing purchase order and press the "New order" button. A new, empty purchase order is created. An existing purchase order can also be copied by pressing the "Copy order" button.

Alternatively new purchase orders can be created automatically and in bulk using the purchase planning features of the system. See the chapter of "Automated purchase order generation" for more information.

The status of a new purchase order is ‘Under construction’, which can be considered as a draft. Data can be entered into the purchase order without regard for accuracy, completeness or consistency. If a purchase order is printed while ‘under construction’ it is clearly marked as such. Before the purchase order is confirmed to the supplier it should be activated by pressing the [Activate] button. Activation will check the completeness and consistency of the order, give the next purchase order number and enter the items to the Item planning processes. Purchase order activation is described later in this chapter.

The following buttons are on this page. Depending on the status of the order not all buttons may be present.

Save	Saves the order to the server.
New order	Creates a new, blank purchase order
Copy order	Creates a copy of an existing order. The new order will have status of "Under construction" regardless of what status the original order was". Note that landed costs are not copied, if they have been manually set they must be set again.
Activate	Activates the purchase order (see later in the chapter).
New version	Returns an active purchase order to the ‘under construction’ state and increments the version number. Remember to activate the order again after any changes are made. It is possible to change supplier confirmation details on the header and lines without making a new version of the order.
Delete	Deletes this order. This is only possible if the order is ‘under construction’ and has not been allocated a number.
Cancel order	This will cancel an open order by setting the order quantity of any open lines to the same as the currently received quantity (zero if there are not yet any receipts). It will not be possible to receive items against the order any more.

When entering a new purchase order, it is recommended but not required that the supplier name is selected first, as many other fields will be completed automatically from the default information associated with the company on the Partner card.

Top section

Purchase order id	The next sequential number will be allocated when the order is activated
Version number	Is incremented each time a new version is created.
Status	See later in this chapter for possible status values
Supplier	Select the supplier either by typing in the name or number or by using the popup selector
Order date	If left blank, this will be filled automatically when the order is activated.
Supplier reference	Usually the sales order number or confirmation reference for the whole order provided by the supplier.

Header tab

Supplier person	Enter a name or select available choices from the popup.
Deliver to	This is entered automatically for your own company address.
Deliver person	Specifies a contact at the ‘Deliver to’ address
Invoice person	Specifies a contact at the ‘Invoice company’ address
Confirmation person	Specifies a contact at the ‘Confirm to’ address
Invoice Company	This is entered automatically for your own company address.
Confirm to	This is entered automatically for your own company address. The default values for the confirmation, delivery and invoice address can be changed but this can only be done by contacting the helpdesk and requesting it.
Default project for lines	In a purchase order, project information is set at the line level. This value will automatically fill in the project information when a new line is created.
Payment terms	The payment terms to be printed on the order. Default set from partner card.
Standard text	Standard texts are defined in ‘Company’ information. The specified text blocks are printed on documents when selected. In a purchase order, the text will be printed after total sum and comments.
Delivery terms	Delivery terms as specified in company settings. Normally Incoterms but user may specify alternatives in company settings.
Delivery terms location	The location for the above delivery terms. Terms may be for example "ex-works Helsinki", then Helsinki is the location.
Currency & Rate	Currency of the order. The selected price list must be of the same currency. The rate is set to the day's rate when the order is activated.
Delivery method	Delivery method. Default from partner card, list of choices from company settings.
Round to package size	This check box will allow line quantities to be rounded to package sizes, if these are specified for the item.
Allow partial ship	This will allow the user who ships the order to ship even if not all lines or quantities are present.
Receipt notication to	Select a user who will be notified by email when any items on this order are received.
Comments	These will appear on the purchase order.

Other addresses in purchase order header

Delivery, invoicing and confirm addresses appear on the purchase order header automatically. If your company has only one address in the system - the main address - it will appear in all these three fields. If your company has separate delivery, invoicing and confirm addresses, they will appear automatically to the fields they belong.

To change these addresses, press the action button next to the address field, which allows you to pick new addresses.

If all the addresses are the same, only the delivery address will be printed on the purchase order. If the addresses are different, for example you have your subcontractor’s site as the delivery address, all the addresses will be printed.

Lines tab

There are three ways to add lines to a purchase order.

On the lines tab: enter or pick an item, quantity, price and dispatch date.
When editing a line (in the Line details tab) press the [New] button on the bottom of the page. Move from one line to another using the [Previous] and [Next] arrow buttons.

Purchase order lines can be deleted on the lines tab by selecting them and pressing the delete button. After deleting lines it is possible to reset the line numbers starting from 1 by pressing the Renumber lines button.

To select an item, either type the item id in the appropriate field or press the action button ([-]).On the item selector, set the appropriate criteria on the top of the page and press [Retrieve]. Select the appropriate items and press [Save].

If the purchase order has many lines it is possible to bulk update the dispatch dates or project fields of the details by selecting all or part of the lines, entering data to the fields and pressing the Update button.

The Get Manufacturer ID button will update the manufacturer id of the selected lines if this information has been setup correctly in the item and partner cards. For instance if the supplier company is changed, it would probably be necessary to update the manufacturer id’s of all items if different suppliers have different item numbering schemes.

Tax codes, dispatch dates and projects can be updated in bulk. Select the lines to be updated and then select the value to be changes. Press update and it will update the field values of all selected lines. All lines can be selected by clicking in the check box at the top of the grid above the line selector.

Line details tab

The line details tab contains sub tabs for Line, Pricing and Quotations. Pricing and Quotations are for information so that it is possible to see recent purchase prices and current quotations if this information is available. These values can be selected for the pricing.

When a new line is created the default price is the last price paid for the item.

Line number	Can be edited. To renumber lines (for instance if you have deleted lines from the middle of the order, go to the lines tab.
Item ID	Either enter or select a valid item id for this line
Manufacturer ID (Manufacturer’s part number)	The manufacturer’s part number is recorded with the item’s data in the Manufacturer Codes tab of the item’s card. There can be multiple alternatives for the manufacturer’s ID. The appropriate one can be selected by pressing the action button and then selecting the appropriate manufacturer. The manufacturer’s ID can also be written as text.
Comments	This text will appear on the confirmation.
Order in date	This is the last date that the order should be sent to the supplier to meet the delivery times specified in the system. It is the earliest required date from planned requirements, less the purchase lead time for the item (specified in the Item card) and the supplier’s transportation time (specified in the Partner section).
Required date	The date required to meet the schedule. Note that these dates may be in the past. This means that negotiations must be made promptly with the supplier to ensure that the items can be delivered in the appropriate time. This date is calculated by the system for your information best on the planning information in the system. It can not be edited and is not printed on the order for the supplier.
Dispatch date	The date requested for the supplier to dispatch the material. Set this date to inform which date you wish the supplier to dispatch the goods. This is displayed as required date from the supplier's point of view on the purchase order report.
Promised shipment date	The date confirmed by the supplier. The promised date may be set by the supplier themselves if PartnerNet is in use by this supplier.
Project	Select a project if required
Cost center	Select an appropriate cost center. This will carry through to the invoice.
Tax code	Select the appropriate tax code for this line. Tax codes are imported from the linked bookkeeping program and can be shown or hidden from this dropdown list in the system settings page.
Confirmation reference	The reference of the supplier’s confirmation. Note that the promised shipment date and the confirmation reference would normally be entered after the order has been activated, sent to the supplier and a response received from the supplier. The confirmation reference may be set by the supplier themselves if PartnerNet is in use by this supplier
Economic Order Quantity	The EOQ is specified on the item card. The line quantity can be rounded up to this by pressing the action button.
Pieces per package	Shows the number of pieces per package as specified for the manufacturers item ID in the Manufacturer Codes section of the item’s card. Pressing the action button next to this field will update the order quantity to the next multiple of the package size.
Quantity	The order quantity.
Unit price	The default value for the item price is the latest purchase price. It will appear automatically after the item has been selected to the purchase order line. The price can be changed manually or selected from a number of alternatives on the Pricing or Quotations tabs. If an quotation is selected, it must be from the same company as the purchase order if this has been specified. The quotation reference will be included in the comments field of the line.
Unit landed cost	The landed cost for an item in the purchase order can be specified here. It will be prefilled with the landing cost increment of the item (set on the item card as a percentage). It can also be manually set. The landed cost will be used to set the FIFO stock value when the item is received. The FIFO stock value will also be updated when a purchase invoice for this order and receipt is entered at a later date. It is recommended however to set the most accurate estimate at this point so that stock values remain correct. Note that the value of the landed cost must be entered in the currency of the purchase order.
Discount	A discount for this item can be specified here

Adding purchase order lines based on the current purchase requirements or minimum free stock levels

The system calculates purchase requirements in real time as sales orders are entered and work orders are opened. This information can be used to add lines to a purchase order in bulk. Lines can also be added based on minimum free stock levels. The minimum free stock is set on the item card.

On the purchase order summary page go to the Lines tab and then press [Add lines]. This will list all of the current purchase requirements based on open sales orders and work orders. From the list, select requirements either from one supplier, or collect all to one order. Tick the lines to be included in the purchase order (or press [Mark all] to select all of them) and press [Add selected]. Selecting many lines for the same item will result in them being summed together on one purchase order line.

Possible statuses for purchase orders and purchase order lines

A purchase order can have the following statuses:

Under construction	An order is under construction from the moment it is created until it is activated.
Active	When the necessary data has been entered, the order can be activated. From this point the sold quantities can be delivered, materials are being allocated to the order and the order cannot be changed.
Part received	A part of the quantities have been delivered, some of them are still open.
Complete	All the products have been delivered.
Closed	Purchase order is closed (by pressing the cancel order button) and no further deliveries are possible.

A purchase order line can have the same status as the purchase order. However, purchase order status and purchase order line status are not necessarily the same. For example, purchase order line status can be ‘Complete’ and ‘Active’ while purchase order status is ‘Part delivered’.

When purchase order entry is complete, the purchase order must be activated. This is done by pressing the [Activate] button on the purchase order header.

Activation does the following:

It checks the logic of the purchase order. E.g. dates and quantities are logical and complete.
It allocates the next available purchase order number.
It gives the current date to the purchase order date if this is blank.
It allocates the purchased items to requirements generated by the Item scheduling system.
It optionally sends a copy of the purchase order to the subcontractor specified in the "Deliver to" field.
Its status changes to "Active".

After activation the purchase order will be available to be received.

Activation will fail if there is incomplete or inconsistent information in the purchase order. An error message will indicate the problem that needs to be fixed.

Activation does not automatically email the purchase order confirmation to the supplier.

The confirmation tab shows confirmations entered by the supplier using the optional PartnerNet extension. The supplier cannot delete or change any confirmations, only add new confirmations. In this way a full history is shown.

The received lines tabs shows the receipts made against this order. Receipts are made in the Warehouse section.

This shows an overview of the status line in the order.

A purchase order that is still under construction will have a remark on this in the document header.

Purchase order acknowledgement is created automatically in the language defined as your supplier’s language.

There is a field called 'Confirmation printed' in the order header. Date and time in the field are updated each time the order is printed. If the order has not been printed the field is empty.

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Licensing

Creating a new purchase order