Purchase Orders

From PERPWiki

Back to Accounts Payable

WORKING WITH PURCHASE ORDERS

Besides using the Catalog tab for a given supplier, there are several other ways to create a new PO in pERP.

1. Go to Accounts Payable, and click 'New Purchase Order' on the sidebox
2. Go to Accounts Payable -> Purchase Orders and click 'New Order'
3. From a supplier's Orders tab, click 'New Order'
4. From the Add box, click Accounts Payable (this is probably the fastest way, especially if you have set your Preferences to PO for this function)

Once a PO has been created, you can continue to work with it from either of three areas: 1. If your Home Page is set in Preferences to show POs, you will see a list of POs awaiting approval (or other action?) on the Home Page 2. Within the supplier record, you can track a PO through the Orders, Shipments, and Financial Tabs 3. You can work again through the AP module using the Purchase Orders, Shipments, and Invoices sections.

The expected normal process for the purchase cycle is: 1. A purchase order is generated in response to a request (such a request could be verbal or automated from the inventory min/max) 2. The details of the incoming shipment are recorded in pERP 3. The shipment is received into a particular location; backorders, short ships, overships, condition of goods received all noted 4. A paper invoice received from the supplier is matched against the invoice details in pERP 5. The invoice is paid

Figure 4-38 The Purchase Orders icon from the AP menu screen

Figure 4-39 The Purchase Order list

The PO list is kind of the central clearing house for POs. This screen can list the entire PO history of the organization, so naturally you'll want some way to focus on the ones you'll need.

NOTE: It is possible (and okay) to link an Invoice to a PO before you receive the goods, though there may be some conflict over the dating. Just click the Invoice icon.

NOTE: users with limited access may not see all the icons.

NOTE: ALL POs MUST BE APPROVED. In many companies, users are not allowed to approve their own POs, regardless of access level. However, other companies - Arctic Spas included - allow certain Purchasing staff to place POs on verbal approval. In this latter case, the Approval icon (checkmark) will show so that the user can click it to approve his/her own order.

IF SUPERVISOR APPROVAL IS REQUIRED: When a PO is first originated, it is in the form of a Request. A Request has an item number, such as 43 or 278 rather than a PO number like 0594-20070131-17. It has no Order Date. It will remain at this status until a "supervisor" views it and approves it. At this time, a PO number will be automatically created. If you are a supervisor and cannot approve a PO, you may need to check the following:

• You have permission to approve the PO. It shouldn't show on your home page if you don't. If you are supposed to have authority to approve, ask IT to set the permissions, or go to your staff and be sure the preferences in AP are correctly set to show you as the person to approve.
• The PO is valid. This means it needs a PO number and each line needs a GL account. When you first open a PO to approve it, it should automatically be assigned a PO number. GL accounts will be assigned based on stock GL codes for the destination location. However, you can edit this if needed.

If the PO is not valid, the reason should be given in the usual message area just below the heading. The Approve icon will not appear for an invalid PO.

IF OWN APPROVAL IS ALLOWED: If you are allowed to approve your own PO, the Approve icon will be visible to you and you must click it before you (or anyone) will be allowed to go on to arrange incoming shipment details. [IS THIS STILL THE CASE????]

If you are working from within the Catalog, you can click "Add to PO" and specify how many. If there is a PO from that supplier with 'Request' status, the items will be added to that PO; otherwise a new PO will be created.

The PO starts the ordering process. It affects everything in the process that comes after it, and everything after refers back to the PO, directly or indirectly. A correct PO is also key in reducing data Entry problems at every step afterward.

It is what is received that affects the inventory, and what is invoiced that affects the accounts. Suppose on the order confirmation, the vendor says "You want 300 but we've only got 150. Do you want 150 on backorder or do you want the 150?". The purchaser says, "Yeah, send us 150 and don't BO the rest; we'll put in another order." If the PO says 300, and they ship 150 (the actual verbal order), and receive 150, and Invoice 150, and pay the invoice, what's going to happen?

The PO will stay open, reminding all involved that "Hey, you wanted 300, you ordered 300, make sure you get them".

Verbal orders should not be permitted. They cause problems. The purchaser who made the verbal order MUST go into pERP, edit the PO and make a note in the Comments section about who made the change and why.

While I support the idea that any good system should mold itself to the users, leaving people in the habit of letting incorrect POs hang around will cause problems in the future as pERP gains more capabilities.

Half of Apollo's suppliers have faxes, and 10% have email addresses. This number will rise. pERP is almost capable of emailing or faxing in orders to the supplier on its own. Eventually, it should be possible to have pERP talk directly to the supplier's system, skipping the error-causing re-entry step.

---

Supplier accounts.

Why would a supplier need an account to access pERP?

In most cases, an employee of a supplier would not access our system. This is or could be used for s supplier to log in to our system, and ship or invoice our order for us. Normally this wouldn't be a person, but pERP's complement on the supplier side.

This is the mirror of the same thing on the AR side, where a client (or other electronic system) could log into our system and place orders electronically.

---

I would like to be able to generate more than one PO for a company. At this stage PERP automatically adds ordered product to existing PO and will not allow me to generate a second PO

There are several ways to create a new Purchase Order: 1. Go to Accounts Payable, and click 'New Purchase Order' on the sidebox 2. Go to Accounts Payable -> Purchase Orders and click 'New Order' 3. From a supplier's Orders tab, click 'New Order' All of these ways will immediately create a new purchase order for you to add lines to, and you can have as many purchase orders as you want.

In addition to the above methods, from the supplier's Catalog tab, you can click 'Add to PO'. This will add that catalog item to the first open (i.e. not approved, not shipped, not invoiced) purchase order for that supplier pERP can find. If pERP cannot find a purchase order to add to, it will create a new Purchase Order for that supplier.

If you are trying to add items from the Catalog tab and finding they are added to the wrong PO (it will tell you where it put it), you should remove the added line and then either: 1. Open the PO you wanted to add to, and add the line. 2. If the PO that pERP found has not yet been shipped or invoiced, then take one of those actions for the PO. pERP will not add to approved, shipped or invoiced POs.

Well, that's the intention, but unless it's been fixed, trying to work from the supplier catalog ALWAYS adds to an existing PO. It's not uncommon to be creating a second PO before the first one has even been confirmed, let alone had shipment arranged, especially when there is a long lead time.

ON CREDITS: It's very important that the reason for a credit existing be followed up.

• If it's a warranty credit from the vendor it should be recorded that way.
• If it's an overpayment because payables entered an invoice twice, then it needs to be handled differently. [How?]
• If there was a pricing error on a previous shipment, then there needs to be an adjustment to a prior P.O. [At what point can a PO no longer be edited?]

At what point does a PO become uneditable?

When an order has been shipped, received and invoiced, it can no longer be changed. After an order line has been shipped and received or invoiced, it can no longer be removed, although the quantity can bechanged. After an order has been invoiced, the unit price can no longer be changed.

How would this adjustment be made in the case of a PO that can't be edited?

I don't know.

Back to Accounts Payable