Entering Purchase Orders

Configuration Process Using the different Purchase Order entry methods Entering Vendor returns and other Purchase Order Types Adding freight costs to Purchase Orders Linking Purchase Orders Using additional Purchase Order process options FAQs & Diagnostic Tips

Purchase Orders define the items or services to be provided by a single Vendor, along with the appropriate Payment Terms, delivery dates, item descriptions, quantities, Ship Via Methods, and all other obligations and conditions. Some benefits regarding why companies use purchase orders are:

• Order tracking - If one person in your company is in charge of making purchases, keeping track of orders is easy. However, as companies grow, purchase orders can keep track of what’s ordered, by whom and when.
• Price agreement - If a supplier changes prices between the date of order and date of delivery or invoice, a purchase order clarifies the agreed upon price for both parties and clears up potential miscommunication.
• Audit trail - Certain financial audits require evidence that managers approved your company’s purchasing decisions. Purchase orders provide this evidence.
• Inventory management - Having a well-organized purchase order system makes it easy to identify what products are coming in at any time, making inventory management simpler.
• Invoice checks - When making repeat orders of identical or similar products, matching invoices to orders can be tedious without documentation. Including a purchase order number on the invoice avoids this confusion.

Configuration

Prior to creating a purchase order in DEACOM, several pieces of master data, including pricing rules, will need to be setup. In most cases, companies will have already completed these set up steps during the implementation process. The required configuration setups are indicated below.

• Chart of accounts - the accounts should be in the system at this point even though none will get hit during the order entry process. An AP Account is needed for an order to be saved.
• Vendors must be entered into the system and validated.
• Purchase Terms must be populated and are defaulted directly from the vendor record.
• Facilities - Each purchase order is going to need to have a facility linked to the order for it to be saved
• Ship To – These locations should be setup prior to entry of purchase orders (Usually the same as the facility).
• Items - Every purchase order needs an item added to it and that item must have a purchase to account.
• Freight Types/Ship Via - These should be set up before purchase order entry and can come directly from the vendor record.
• "Max PO Dollars 1-3" - Set via Purchasing Options, these fields have security associated with them and can be used to limit the maximum dollar amount a Purchase Order may be created for.

Approval settings for Purchase Orders are optional. Additional information on the security and default order options available is included in the Configuring Requisitions Best Practice page.

Process

Using the different Purchase Order entry methods

How are Purchase Orders entered without using pre-existing orders?

• Using the Order Entry function - Regular Purchase Orders are cut to a single Vendor and contain details regarding the appropriate Payment Terms, delivery dates, item descriptions, quantities, Ship Via Methods, and all other obligations and conditions. For details on the different purchase order types in DEACOM, see Purchase Order Types.
• Using the "Import Excel" function - Similar to using the Order Entry function, the Import Excel option will result in a Purchase Order cut to a single Vendor with one or more lines detailing the items, prices, quantities, etc. being ordered. Various file types can be used to simplify and save time during the order entry process.
• Using the "Create PO" and "Auto PO" Functions - The "Create PO" and "Auto PO" functions are used to enter Purchase Orders from within MRP and are used to fulfill purchasing requirements based on demand and suggestions within the MRP Report. In this situation, Purchase Order quantities and "Due to Dock" dates will be populated automatically by the system. Users with the correct permission may override these values.

What are some other methods of entering Purchase Orders?

• Using Recurring Purchase Orders function - The recurring purchase order process can be used whenever the same, or nearly the same, purchase order is issued over and over again for both direct GL expenses and materials. There are two steps involved in using recurring purchase orders: first, the creation of the recurring purchase order, which is covered in detail in the Purchasing > Order Entry section. Second, the use of the recurring PO to create a new Purchase Order that will be received and invoiced normally.
• Using Blanket Purchase Orders - Blanket purchase orders represent a framework for a long-term agreement between a company and it's Vendors. Blanket purchase orders are typically used in situations where a customer has committed to purchasing large quantities that are to be delivered in several smaller shipments over a certain period of time. Blanket orders provide a benefit to customers since they prevent them from having to hold greater than necessary amounts of stock and also avoids the administrative expense of processing frequent purchase orders.

Entering Vendor returns and other Purchase Order Types

How are returns to a Vendor handled?

• Return to Vendor Purchase Orders - Used in situations where material will be removed from inventory, returned to the vendor, and a credit will be received. This situation is handled by creating a purchase order for a negative quantity.
• Debit Memo Purchase Orders - Used in situations similar to return to vendor orders, but in this case the items in inventory will be kept, or otherwise disposed of, and the only adjustment needed in the system is the registering of credit owed by the vendor.

What are common Purchase Order Types other than the regular Purchase Order?

• Special Order Purchase Orders - The special order purchasing process allows for the sale and purchase of one-time items that are not normally stocked and not expected to be sold again.
• Drop Shipments - The drop ship process handles sales/purchasing situations where material does not flow through the stockroom, but ships directly from Vendor to Customer. These orders are received, invoiced, paid, and cancelled (if needed) like any other Purchase Order.
• Expense Purchase Orders - Purchase orders for direct General Ledger expenses are usually entered when the invoice arrives from the Vendor. This type of Purchase Order can be used to pay utility bills, freight expenses, and other administrative expenses. There is no need to receive material on this type of Purchase Order, so the process allows that step to be skipped.

Additional information on these and other order types can be found in the Purchase Order Types Encyclopedia page.

Adding freight costs to Purchase Orders

Freight costs may be added to Purchase Orders both automatically and manually. Additional information is available via the Managing Freight Charges (Sales & Purchasing).

Linking Purchase Orders

Deacom offers options for linking purchase orders. (beginning in version 17.02 and 17.04) The feature supports a variety of scenarios such as:

• Linking multiple receipt POs to one adjustment PO.
• Roadside freight adjustments that require multiple POs to be linked.
• Minimum price adjustments and Inspection corrections.

These options are controlled by the "Link POs To" field in Purchasing > Options and the Link POs button on the Purchase Order Entry form.

Using additional Purchase Order process options

How can users be prevented from viewing specific Purchase Orders?

Using Public vs Private Purchase Orders - A Purchase Order or Requisition may be marked as Public or Private via the selection box in the "PO Type" field located on the General tab of the Purchase Order Entry form. Only users with access to the security setting "Purchase orders -- view private" will be able to view and create Private orders. The option to mark orders as private is useful in situations where certain orders, such as those dealing with monthly rent or equity payments, should only be viewed by accounting personnel.

How can Purchase Orders be linked to other orders in the system?

Purchasing to specific areas - DEACOM provides the ability to enter orders that purchase directly to Jobs, Sales Orders, or Bill-to Companies. To use this feature, when entering a new Purchase Order, navigate to the Misc 1 tab and select the desired record from the pick list in the appropriate field.

How are order confirmations generated?

Using Print Outs - Once one or more Purchase Orders have been entered, navigating to Print Outs > Purchase Orders will display a list of all orders that have been entered and not yet printed. This display setting is by default and may be changed by clicking "Display" in the toolbar. To print one order, select the order and click "Print One", adjust the printing settings as desired then click "Print". If all orders should be printed, click "Print All". This feature is used to send a confirmation of what has been ordered so that it can be reviewed for accuracy and agreed to by the Vendor. Note that the print outs can also be generated by viewing the order via Purchasing > Order Reporting and clicking the "Print" button.

What methods can be used to plan purchasing?

Using MRP for Purchasing - MRP is a production planning and inventory control system used by companies to manage their manufacturing processes. MRP systems are designed to ensure materials are available for production and to ensure products are available for delivery to customers. In addition, MRP helps companies maintain the lowest possible material and product levels, plan manufacturing activities and manage delivery schedules. DEACOM’s MRP approach is to provide a filtered list of only those items requiring action by the user. These items include those that are purchased from outside suppliers and subassemblies that are components of other items produced internally. Refer to Understanding MRP Basics and Understanding Advanced MRP for more information.

FAQs & Diagnostic Tips

How do I copy a purchase order?

To copy a Purchase Order, navigate to Purchasing > Order Entry, select a Vendor, click "Copy PO", select Purchase Order, from select order lines to copy form select lines (by default all lines are selected), click "Continue" button, modify PO as needed and click "Save" button. Copying a Purchase Order will copy the lines exactly as they were on the original PO. Re selecting the part number will bring over any changes that have been made to the item master since the original PO was entered.

When creating a purchase order, how do I know who my preferred vendor is?

The preferred vendor is used in conjunction with MRP functionality. MRP will display your preferred vendor and you can automatically create purchase orders. You can also create Manual POs in MRP. You could also look up your preferred vendor in Inventory > Item Master, View part, click "View Vendors" button.

I get an error when I try to attach documents to sales orders and purchase orders.

Make sure you can access the path entered in the System > Options > Documents tab "Doc Link Folder" field from within Windows Explorer. If not, re-map the drive and try again. Alternatively, an administrator can delete the path entered in the Doc link folder field if many users are unable to attach documents.

How can I have item line notes automatically populate on a purchase order?

You cannot automatically populate line notes (pu_notes) on a purchase order line. However, in Inventory > Item Master, you can add notes in the "Notes" field (pr_notes) at the bottom of General 1 tab for the Item. This field is available to the purchase order report.

My purchase order is not printing the correct ship-to address even though I have the correct facility selected. What is the problem?

Confirm that the correct Ship to is selected on the "Misc 1" tab. Ship to locations are maintained at Purchasing > Maintenance > Ship To Locations.

What is the problem if I can no longer enter decimals in my purchase orders?

Check the "Pricing Decimals" value in Inventory Options. This field determines the number of decimals for purchase orders.

Purchase order line quantity ordered field is not showing the quantity that was ordered. What is the problem?

Check that the part, unit of measure and\or Vendor Part Cross Reference is setup correctly.

I have entered new pricing orders for some vendors. I am re selecting the parts on the purchase orders, but the prices are not changing. Why aren’t the new pricing orders working?

Please check the pricing methods on the lines you are trying to update. The unit cost will not update if the lines have previously been manually priced. You will have to delete the original line and renter a new line.

Why is the vendor part not showing up on the PO line? The vendor cross reference is set up the same as other parts that are working correctly.

Please verify if the vendor cross reference is facility specific and if the PO is written to the correct facility.

The default purchase order type on the Purchase Order Entry form is suddenly "Transfer Hold". Why and how do I change it back to "Purchase Order"?

This is coming from the default Ship To Location. When the default Ship to Location has a hold facility specified, the default purchase order type becomes Transfer Hold. Removing the hold facility from the default Ship to Location will resolve the issue. Go to Purchasing > Maintenance > Ship to Locations. Modify the default Ship to Location, clear the Hold facility field OR remove the check from the Default checkbox.

How do we print the order contact name on the Purchase order report layout?

Contact information may be added to the purchase order print out via the contact people (dmcontpeople) fields which are available to the Purchase Order Print Out report layout.

Can I pay a vendor invoice without a PO?

No, in DEACOM a purchase order is required to pay an invoice.

How do I know when a Purchase Order Confirmation was printed?

The Purchase Order Printed date can be viewed by adding the "tp_prtpo" field to the Purchase Order Reporting grid.