Now Loading

Purchase Order

  1. Home
  2. Knowledge Base
  3. Inventory & Asset Management
  4. Purchase Order
The purchase order is an electronic document that is sent by the customer to the seller to request for supply of certain goods and services. It is the first official communication from the buyer, containing the details of the specific items required, their quantity and the prices agreed upon along with other details that may be required for the goods and services.
The purchase line orders contain the details of each of the items types ordered as well as the quantity of each item. Each type of commodity has a unique sales line number. Numerous purchase line orders can be contained in a single purchase order.

The purchase orders are used by the seller to prepare the items for shipment. The purchase orders are also important in providing the seller with information about the buyer to track sales records, authorise shipments and plan properly the shipment methods in line with the customer’s needs. This helps a business to grow and reach more customers by simplifying how you make sales. It makes it easier to make purchase orders and also improves the efficiency of the seller’s ability to account for stock and manage sales.

Creating a Purchase Order

In the purchase orders, one is able to view and edit the existing purchase orders, create new ones and also import a new document from the existing documentation. When creating a new purchase order, the following steps are followed:

A Purchase Order can be created in following methods:

• From Purchase Order Tab (Record level)
• From the Sales Order Tab (Converting sales order into purchase order)

Create Purchase orders from a Purchase Order Tab

PO1

Once you click the purchase orders tab, there are a variety of activities and information that you can access. On the page, you have the access to all purchase orders raised. The purchase order details can be viewed and edited accordingly.

  • Click on the “New” button located on the top right corner of the purchase orders page.
  • Once you click the button, you are required to choose the type of record that you want to fill, between the purchase order and the return to vendor document.
  • When creating a new order, you should choose the standard purchase order.

The standard purchase order requires:

po_ht2

  • The details of the requesting organisation, including the employee placing the order and the approver.
  • The details of the items ordered, including the quantity, barcode numbers, the purchase order lines of each item and description of the order.
  • The form also includes a section for cost details, including the shipment costs and tax payable.
  • The order also requires the project the items are used in, the date for order approval and the contract with the vendor.
  • There are also details that cover the delivery information. This includes the address, expected delivery dates and invoice address.

The return to vendor option allows you, to fill in information about the items being returned and the reasons for the return.
po_ht3

  • The address information of the vendor and the buying organisation.
  • The master purchase order from which the Return to Vendor document is filled.
  • The quantity of the items being returned and the credit information.
  • It also covers the budget accounts related to the items.
  • The cost details of the RTV, including the tax details.
  • The contract information, project and revision number of the document.
  • The details of the expected delivery date, the invoice address as well as the date for cancellation.

Purchase Line Orders

The purchase order lines are located next to the purchase details of an existing purchase order. The purchase line orders are filled in the related tab next to the details of the purchase orders.

PO2

New purchase line items documentation can be filled by clicking the “new” tab on the right end of the page. Additionally, the existing purchase order line items can be easily edited, to account for the right quantity and details of the items to have.

In the same related section, there are links to fill other documents related to the purchase order, including the work orders, invoices and the contract, stock inward and outward line items, supplier payments among other details.

Fields to note:

Information Section
Field Description
PO Name It describes the name of the purchase order
Employee Requester It defines the employee name who requests the work order
Final Approver It describes the name of the employee who approves the Purchase order
Sales Order It is the sales order related to the purchase order
Budget Account It describes the name of the budget account
Master Purchase Order It describes a purchase order which associates other purchase orders with it
Total Credit Total credit of the PO
Count PO Line Items Number of PO line items in the purchase order
Total Quantity Total quantity of the products in the purchase order
Reconciled Quantity Reconciled quantity with the products received in the inventory
Barcode It describes the barcode specific to the work order
Vendor It describes the name of the supplier
Status It defines the purchase order status – Booked, Reconciled, Approved Etc.
Payment Terms Payment of Supplier Invoices to be made after receipt of invoice.
Order Date It specifies the order date of the purchase order
Order Amount It gives the total amount of the purchase order without tax
Vendor Contact Contact Name of the Vendor/supplier
Tax Amount The Tax amount for the PO
Shipping Amount Shipping amount for the PO
Total Amount Total amount of the purchase order with tax amount
Organisation It defines the name of the organisation/Account
Organisation Business Unit It defines the Business Unit name of the Account/Organisation
Purchase Order Details Section
Cost Center  Account to which the purchase order is assigned
Approved Date It describes the approved date of the work order
Programme Programme the purchase order belongs to if any
Revision Date If there is any revised date for the purchase order
Project It describes the name of the project for which the work order is created
Vendor Contract Vendor contract
Revision Number  If the purchase order is revised a Revision number is generated
Publication Date It describes the date of the purchase order published
Cancel Date Cancellation date of the PO if any
Delivery Details
Delivery Address Delivery address for the purchase order goods
Vendor Address Vendor/supplier address of the purchase order
Invoice Address It describes the address to which the purchase order is invoiced
Actual Delivery Date It gives the actual date when the purchase order goods were delivered
Expected Delivery Date It tells the expected delivery date of the purchase order products
Price List It describes the price of the products in the price book entry

Convert a sales order into a purchase order

The purchase orders are used by the seller to prepare the items for shipment. The purchase orders are also important in providing the seller with information about the buyer to track sales records, authorise shipments and plan properly the shipment methods in line with the customer’s needs. This helps a business to grow and reach more customers by simplifying how you make sales. It makes it easier to make purchase orders and also improves the efficiency of the seller’s ability to account for stock and manage sales.

  • Click on the Sales Order tab in the tab menu
  • Select the sales order that you would like to convert into a purchase order and click on the down arrow in the top right-hand corner of the page and select ‘Create Purchase Orders’ as shown below.                                                       po_ht5
  • Fill in the purchase order detail section and the purchase order line items section, new purchase order line items can also be added along with the existing line items using ‘Add ’ button.

  • Click on ‘Save’ button which creates a new purchase order with a unique purchase order number.

 

Was this article helpful?