Purchase Order
The Purchase Order is the second transaction generated in the purchase process.
Is created when you decide to purchase Products or Services from a Supplier.
Records details of the Order placed. It is an affirmation of the Supplier's proposal by the Purchaser. It records the description, quantity, and related information for products and services that the company intends to purchase.
You can either create a Purchase Order directly or convert an existing Purchase Quotation to a Purchase Order. However, the Purchase Order is not mandatory; you can create a Goods Receipt or a Purchase Invoice (with some restrictions) directly.
Create Purchase Orders
You can create a Purchase Order in any of the following ways:
Convert an existing Purchase Quotation to a Purchase Order.
Create a new Purchase Order.
Convert an Existing Purchase Quotation to a Purchase Order
You can convert a Purchase Quotation to an Order by selecting the Reserve option in a Purchase Quotation master. When you convert a Quotation to an Order, the details in the Quotation are transferred to the Order.
By default, the Ordered column displays the quantity in the Quotation. You can change any information (including supplier information) in the Order and save it.
The Purchase Quotation number is displayed as a reference number in the Purchase Order.
Create a Purchase Order
To create a Purchase Order directly,
Menu Path: Purchases > Purchase Orders
Backoffice Processes
When you create a Purchase Order directly, the following back-end processes occur:
The next sequence number for Purchase Orders for the logged-in region or region of the logged-in region/sub-region is assigned. The sequence number of the Purchase Order is generated automatically by the system.
A Purchase Quotation number is assigned and associated with this Purchase Order. The next sequence is the number (for Purchase Quotations) specified for the logged-in region or the region of the login region/sub-region assigned to the Purchase Quotation. This number is used to change the order back to a Quotation if the Purchase Order is canceled.
The total quantity on Order for each product increases by the quantity of the product Ordered.
The Purchase Order is initially assigned the status 'Open'.
Accounting Entries
Accounting entries are not generated when a Purchase Order is created. They are generated only when payments or deposits are made against the Order.
Purchase Order Processes
The processes that can be carried out from a Purchase Order are:
Commit products to the Order
Add-on Costs Distribution
Freight Estimation
Processing Receipt
Mark the Order Open
Mark the Order Close
Cancel the Order
Make Payments on a Purchase Order
Reduce transaction Value Below Paid Amount
Track Service Products
You can keep track of products that are sent to Suppliers for service or repairs. This can be done in 2 ways:
Products can be retrieved into Purchase Orders, and then their product type toggled to 'service', to denote that these represent products sent out for service.
You can also use the Transaction Template option to track service orders placed with Suppliers.
Steps of Using a Service Product in a Purchase Order
Retrieve the product code into the transaction.
Change the product type to service by clicking the Type column for the line product, and pressing the Spacebar key.
Attach/commit the products returned for repair or service.
The cost of the product displayed is the product’s last cost. For service products, this amount represents the value of service charges. If the product is under warranty and no costs are associated, you must change the product cost to zero.
Service products, although sent to suppliers for service, continue to be a part of your stock.
The serial number must be attached to the ‘stock’ type of stock areas for serialized products sent for service. For non-serialized products, tracked for lots, the product has to be attached from stock.
You cannot toggle a back ordered product to type ‘service’. Further, if quantities are attached for the line product, Greenestep does not allow you to toggle it to type ‘Service’.
When the supplier has serviced the order, create a Goods receipt for the supplier by converting the order to a receipt. You can specify the service charges either in the product’s cost column or add it as a line product.
Commit Products to a Purchase Order
Inventoried products can be committed to a Purchase Order when:
The supplier ships the products on order and informs you about the shipment. Entering the product quantities shipped by the supplier in the Committed column helps you in materials planning as these products are likely to be received immediately.
You physically receive the products but do not take the products into stock until it is inspected and approved.
You cannot commit products on orders belonging to discontinued suppliers.
Process a Purchase Order to a Purchase Receipt
A Purchase Receipt is used to track products received from a Supplier. You may assign received products to inventory within the Purchase Receipt.
You can process a Purchase Order to a Purchase Receipt by using the Receive option (Menu Path: Purchase Order master > Options > Process > Receive). The details of the order are copied to a Purchase Receipt master.
When you save the Purchase Receipt, the quantity received is updated in the Received column of the Purchase Order. If you receive committed quantities, the quantity is reduced in the Committed column of the Purchase Order.