How to Create Purchase Orders

How to Create Purchase Orders
Purchasing provides the Purchase Orders window that you can use to enter Standard and Planned purchase orders as well as Blanket and Contract purchase agreements. You must be defined as a buyer to use this window.
1.   Navigate to the Purchase Orders window from the menu:

• by selecting the New PO button in the Find Purchase Orders window or any of its results windows
• by selecting the Open button in any of the Find Purchase Order results windows
• by selecting the Open button and then double-clicking the Open Documents icon in the Notifications Summary window when the current line is a purchase order
• if the PO: Display the AutoCreated Document profile option is set to Yes, Purchasing opens the Purchase Orders window when you have completed AutoCreation of a purchase order. See: Profile Options in Purchasing.

      The upper part of the Purchase Orders window has the following display-only fields:

• Created - The system date is displayed as the creation date.
• Status - Possible order status values are: Incomplete - The order has not been approved. Approved - You have approved the order. You can print it and receive items against it. Requires Reapproval - You approved the order and then made changes that require you to reapprove it.
• Total - For standard and planned purchase orders, Purchasing displays the current Total order amount.
• Amount Agreed - For blanket and contract purchase agreements only, Purchasing displays the agreed-to amount for the agreement. The amount Released value should not exceed the Amount Agreed. (Note also that if you change the Amount Limit in the Terms and Conditions window, the Amount Agreed should be equal to or less than the Amount Limit.)
• Released - For blanket and contract purchase agreements only, Purchasing displays the current total amount Released. The amount released is 0.00 until you create releases against the blanket purchase agreement or reference the contract on a standard purchase order.
• Currency - Purchasing displays the functional currency. This is overridden by supplier currency information.
• P-Card - Purchasing displays a procurement card number if the purchase order was created from a iProcurement requisition that used a corporate credit card for the purchase. This field displays if the profile option PO: Use P-Cards in Purchasing is set to Yes. Only the last four digits are displayed. Procurement cards can be used for items with a Destination Type of Expense, for documents that do not contain a Project number, and for standard purchase orders or releases only.

2.   Enter a unique Purchase Order number. The Revision is displayed to the right of the number. If you chose automatic purchase order number generation in your Purchasing Options, the cursor does not enter this field and the number is generated when you save your work.
3.   Choose the purchase order Type: Standard Purchase Order, Planned Purchase Order, Blanket Purchase Agreement, Contract Purchase Agreement. See: Purchase Order Types.
Attention: The names of the above purchase order types can be modified in the Document Types window. See: Defining Document Types.
4.   Enter the name of the Supplier for this purchase order. To approve a purchase order, you must provide a supplier.
Attention: You cannot change the supplier once you approve the purchase order. The purchase order becomes a legal document when you approve it. To change the supplier after you approve a purchase order, you must cancel the existing purchase order and create a new one for the other supplier.
5.   Enter the Site of the supplier you want to use for your purchase order. If the supplier you choose has only one site, it is defaulted into this field. Before you can approve a purchase order, you must provide a site. Once the purchase order is approved, you can change the supplier site only if the PO: Change Supplier Site profile option is set to Yes. And only sites with the same currency as the previous site can be used. If you change the supplier site, the revision will be incremented, and will require reapproval. You cannot enter the supplier site until you have entered a supplier.
You can optionally enter the name of the Contact at the supplier site. If the supplier you choose has only one contact name, it is defaulted into this field. You cannot enter a contact until you have entered a supplier site.
6.   Enter the Ship To and Bill To locations for the purchase order. If you entered a supplier and supplier site, the Ship To and Bill To defaults reflect the locations you assigned to the supplier or supplier site. You can accept these values or change them to other locations.
7.   If the Enforce Buyer Name option in your Purchasing Options is set to Yes, your name is displayed as the Buyer, and you cannot change this value. Otherwise, you can enter the name of any buyer.
8.   For blanket and contract purchase agreements only, enter the total Amount Agreed. This is the amount you have agreed to spend with the supplier.
9.   Enter a Description of the purchase order. These comments are for internal use only and do not print on the purchase order. You can enter up to 240 characters. If you want to add unlimited notes, use the Attachments feature.
10. For standard and planned purchase orders and blanket purchase agreements, enter line information for the header you have just created.
Entering Purchase Order Lines
Use the Lines tabbed region in the Purchase Orders window to create purchase order lines.
When you save your work, Purchasing creates shipments and distributions if sufficient valid default information is available. Use the Purchase Order Shipments window to review, edit, and create multiple shipment lines for each purchase order line.
To enter a purchase order line:
1.   Select the Items tabbed region in the Purchase Orders window.
2.   Enter the purchase line Number for the purchase order line. If you start a new purchase order line, Purchasing displays the next sequential line number available. You can accept this number or enter any line number that does not already exist. This number is used for all tabbed regions in the Purchase Orders window.
3.   Enter the line Type for the item. When you create your purchase order line, you enter a line type as part of your item information. When you enter a line type, Purchasing automatically copies the corresponding defaults. You can change the line type after you have saved your work, if the change is in the same line type class, but Purchasing won't automatically copy the new defaults. If you change the line type before you save your work, Purchasing automatically copies the new defaults if the new line type is in a different line type class.
You can enter predefined items for your purchase order line only when you specify a quantity based line type. If Bills of Material and Work in Process are installed and you have defined an outside processing line type, you can enter that type here to purchase outside processing.
4.   Enter the Item you want to purchase. If you enter an item, Purchasing displays the purchasing category, item description, unit of measure, and unit price associated with the item. To create a purchase order line for a one-time item, simply skip the item number field and enter a purchasing category and an item description. If you are purchasing outside processing, you can enter only outside processing items.
5.   Enter the Revision number for the item on the purchase order line. The Revision number is required if the item is under revision control.
6.   Enter the purchasing Category of the item you want to purchase. If you choose an item, Purchasing displays the purchasing category for the item. You cannot change the purchasing category if you choose an item.
7.   Enter the Description of the item. If you choose an item, Purchasing displays its description. You can change the item description only if you set up the item attributes to let you do so. The full item description for the current line is displayed beneath the Lines tabbed region.
8.   Enter the total Quantity you are ordering on the purchase order line.
9.   Enter the UOM of the item. The unit of measure qualifies the quantity you enter on the purchase order line. When you choose a line type, its default unit of measure appears here. When you choose an item number, its unit of measure overrides the line type default. You can change the UOM until the item has been received, billed, or encumbered.
10. Enter the unit Price for the item. If you choose an item, the default price is the list price for the item. Otherwise, the default price is from the line type. The Amount field displays the unit price multiplied by the quantity.
11. Enter the Promised date that the supplier promised delivery of the items. This promised-by date is printed on the purchase order.
12. Enter the Need By date when the requestor needs the item. This date is printed on the purchase order if you do not provide a promised-by date. If you are using Master Scheduling/MRP, you must provide either a need-by date or a promised-by date for shipments that correspond to purchase order lines with Master Scheduling/MRP planned items. A need-by date is also required for Inventory planned items.
13. Optionally enter the Supplier's Item number for this item.
Multiple distributions, Promised date, and Need-By date display as "multiple" at the line level.
14. Select Reserved to reserve funds for the line.
To view tax information:
     After you have entered and saved all tax information, do either or both of the following:

• Choose Tax Code Summary from the Tools menu to see the total recoverable and nonrecoverable tax for each tax code in your document.
• Choose Tax Details from the Tools menu to see recoverable and nonrecoverable tax details for each line, shipment, and distribution.

     To reaccess a purchase order quickly:

• Choose Place on Navigator from the Action menu. Choose the Documents tabbed region in the Navigator to later access the purchase order more quickly.

Note: Once you place a document in the Navigator, it is the first thing you see in the Navigator the next time you log into Purchasing. Choose Functions to return to the Purchasing menu.
Entering Purchase Order Shipments
Use the Shipments window to enter multiple shipments for standard and planned purchase order lines and to edit shipments that Purchasing automatically created for you. A purchase order shipment specifies the quantity, ship-to organization and location, date you want your supplier to deliver the items on a purchase order line, and country of origin for the items. When you save your work, Purchasing creates distributions if sufficient valid default information is available and if there are no existing distributions.
To enter purchase order shipment information:
1.   For standard and planned purchase orders, you can navigate to the Shipments window by selecting the Shipments button in the Purchase Orders window. The first tabbed region in the Shipments window is the Shipments tabbed region. In addition to the enterable fields discussed in the following steps, this region displays the UOM, the Original Promise date (if the Promised date has already been changed, the original promised date is displayed here), the Charge Account, the line Amount, and a check box to indicate whether funds have been Reserved.
2.   Enter the line Number for the shipment line. If you enter a new shipment line, Purchasing displays the next sequential line number available. You can enter any line number that does not already exist.
3.   Enter the ship-to Organization. If you entered an item, you can pick only organizations in which the item is defined. If you entered a revision number on the purchase order line, then the item revision must also be defined in the organization. Note that you cannot update the organization once you have saved your work if the shipment has distributions.
4.   Enter the Ship-To location for the shipment. You can pick any location that does not have an organization or any location whose organization matches the organization in the previous field.
5.   Enter the Quantity for the shipment. This value must be greater than 0. The default is the quantity from the corresponding Purchase Order Line. If you decrease this quantity, Purchasing automatically defaults the quantity ordered of the next line to the total quantity that you have not yet placed on a shipment line. The UOM is displayed to the right of the Quantity.
6.   Enter the date that the supplier Promised delivery of the items. This promised date is printed on the purchase order shipment. The default is from the Purchase Order Preferences window.
7.   Enter the Need By date when the requestor needs the item. This date is printed on the purchase order if you do not enter a promised date. The default is from the Purchase Order Preferences window. If you use Purchasing with Master Scheduling/MRP, you must provide a need-by date for purchase order shipments with Master Scheduling/MRP planned items. You must also provide a need-by date for Inventory planned items.
8.   Optionally choose or change the Note for Receiver. The Note for Receiver is a note which will be displayed at the time of receipt for this shipment. The Note for Receiver defaults from the requisition line that this purchase order was created from. Otherwise, this field is blank.
9.   Optionally choose or change the Country of Origin.
The Country of Origin is the country in which an item is manufactured.
The Country of Origin defaults from the Approved Supplier List, if it is defined there. If not, it defaults from the supplier site in the Supplier Sites window. Otherwise, this field is blank. You can leave it blank or select a country.
If you do not know the originating country, you can enter or change the Country of Origin later on the receipt.
10.  Note that Taxable is selected if a Tax Code is associated with the item.
If there is no Tax Code for the item, Taxable is not selected. You cannot change the Taxable check box independently of the Tax Code.
11.  Enter or use the default Tax Code for taxable items.
The tax code defaults from the following sources, in the following order:

• The Purchase Order Preferences window. If you have specified a preferred tax code in this window, Purchasing defaults this tax code onto the purchase order shipment.
• The Tax Defaults region in the Purchasing Options window. If you have specified a tax defaulting hierarchy in this window, Purchasing searches for and defaults the tax code based on that tax defaulting hierarchy.

Accept the default tax code or select another. You cannot override the tax code if the profile option Tax: Allow Override of Tax Code is set to No, if the shipment has been received, or while funds for the document are reserved if you use encumbrance accounting.
If on the purchase order you change a tax source, such as Supplier or Site, then Purchasing does not redefault a new Tax Code on the current shipment, but does default it on new shipments. The same is true even after you override the Tax Code: Purchasing does not redefault it on existing shipments when you change a tax source.
Note: If you change the Tax Code after already creating distributions for the shipment, the associated Recovery Rate on those distributions is not redefaulted for the new Tax Code.
12. Save your work.
Entering Purchase Order Distributions
Use the purchase order Distributions window to enter distribution information for purchase order shipments or to view distributions that Purchasing has automatically created for you. You can enter multiple distributions per shipment line. You can also enter information about paper requisitions in this window.
To enter purchase order distribution information:
1.   Navigate to the Distributions window by selecting the Distributions button in the Shipments window. The Shipments window is accessed from the Purchase Orders window. You begin in the Destination tabbed region.
2.   Enter the line Number for the distribution line. If you enter a new distribution line, Purchasing displays the next sequential line number available. You can enter any line number that does not already exist.
3.   The destination type determines the final destination of the purchased items. Choose one of the following options:

• Expense - The goods are delivered to the requestor at an expense location. The destination subinventory is not applicable.
• Inventory - The goods are received into inventory upon delivery. You can choose this option only if the item is stock enabled in the ship-to  organization.
• Shop Floor - The goods are delivered to an outside processing operation defined by Work in Process. You can choose this option only for outside processing items.

4.   Enter the Requestor and Deliver To location for this distribution. If the destination type is Inventory, you can also enter the Subinventory.
5.   Enter the Quantity of the purchase order shipment that you want to charge to the Accounting Flexfield. The default value comes from the quantity you enter in the Shipments window. If you decrease the default quantity, Purchasing automatically defaults on the next distribution line the total quantity you have not yet assigned to a distribution line.
6.   Enter the Charge Account. When you save your changes in this window, Purchasing uses the Account Generator to automatically create the following three accounts for each distribution:

• Charge: the account to charge for the cost of this item
• Accrual: the AP accrual account
• Variance: the invoice price variance account

If you are using encumbrance control, Purchasing also creates the following account for each distribution:

• Budget: the encumbrance budget account

The Account Generator creates these accounts based on predefined rules.

If the destination type is Expense, the default charge account you enter in the Purchases Order Preferences window overrides the charge account supplied by the Account Generator, and you can update the charge account here.
For outside processing lines, the cursor does not enter this field during initial entry, since the Account Generator cannot build accounts until you have entered the Resource Sequence in the Outside Processing window.

7.   Change or accept the default Recovery Rate for taxable items.
The recovery rate is the percentage of tax that your business can reclaim for credit. The recovery rate defaults in based on the Tax Code in the purchase order Shipments window and the setup in the Financials Options window.
You can change the recovery rate if the profile option Tax: Allow Override of Recovery Rate is set to Yes, if the shipment has not yet been received, or while funds for the document are not reserved (if you use encumbrance accounting). Depending on the setup in the Financials Options window and the type of tax, only certain recovery rates may be allowed.
If on a purchase order you change a tax source, such as Supplier, Site, or Tax Code, then Purchasing does not redefault a new Recovery Rate on the current distributions, but does default it on new distributions.
You can choose to use a different recovery rate for different distributions, even if they use the same tax code.
8.   Enter the GL Date you want to use when you reserve your funds. You can enter a GL Date only if you set up your financials system options to use encumbrance or budgetary control for purchase orders. The default is the current date.
If you enter a date that belongs to two separate accounting periods, Purchasing automatically creates a journal entry in the first accounting period that contains this date.
The Reserved check box indicates whether you successfully reserved funds for this purchase order distribution. You reserve your distribution when you approve your purchase order. You cannot change any purchase order distribution that you have already encumbered unless you explicitly unreserve the funds in the Approve Document window.
To enter distribution detail information:
1.   Select the More tabbed region.
The Online check box indicates whether this distribution is part of an on-line requisition. If so, Purchasing displays the requisition number and line number.
2.   If this distribution comes from an on-line requisition, Purchasing displays the Requisition Number and Line number, you cannot update this field. If this distribution does not come from an on-line requisition, enter the paper requisition number in this field. The default is the paper requisition number from the Purchase Order Preferences window.
Purchasing displays the Budget Account, Accrual Account, and Variance Account numbers supplied by the Account Generator.
3.   Enter the Rate Date for the currency. Purchasing uses this date to obtain the currency conversion rate from your conversion definitions. You cannot enter this field when you edit a purchase order created in your base currency.