Purchase Order Processing - Flow of Processing



The Flow of Processing section helps you learn how to operate the Purchase Order Processing module for the first time and provides guidelines for operation after it is installed.


The AddonSoftware Purchase Order Processing module is used for automatic replenishment processing and entering, maintaining, and displaying vendor purchase orders for all items ordered, whether they are inventory or non-stock items. It is designed to integrate with the AddonSoftware Accounts Payable and Inventory Control modules, and can interface to the AddonSoftware Shop Floor Control module as well.


Flow of Daily Processing

Daily processing refers to the procedures performed each day while using the Purchase Order Processing module, such as creating requisitions and purchase orders or entering receipts and invoices. Depending on the volume of business your company handles, requisitions and purchase orders are created during most daily operations. You can process these records either singularly or in groups.


To audit the flow of daily processing, registers are printed for purchase requisitions, purchase order receipts, and purchase invoices before an update takes place.


Create Requisitions and Purchase Orders

Generally, before purchase orders are issued, requisitions are created in the Purchase Requisition Entry task to request a purchase. The same information required for purchase order entry is required for requisition entry. When approval of a requisition is granted, you can enter the requisition number in the Purchase Order Entry task to automatically convert the requisition to a purchase order.


At other times, you may be using the Purchase Order Entry task to enter a purchase order without a requisition. Whether using the Purchase Requisition Entry or Purchase Order Entry tasks, general information such as the vendor name and address is requested, as well as dates, shipping instructions, terms code, freight terms, and so forth. As line items are entered, they are assigned codes which tell the system how to process the line.


There are five different types of detail lines available for the items entered on requisitions and purchase orders: standard, non-stock, vendor part number, message, and other. See the Open Purchase Order Conversion forms at the end of the Installation section for the type of information requested for the different detail lines.


Print Requisitions and Purchase Orders

Use the Purchase Requisition Print task to print requisitions before issuing purchase orders. Requisitions are printed by requisition number, vendor number, alternate sequence, or warehouse. A message can be printed on the requisition if desired.


Verify that the requisitions were entered correctly. Use the Purchase Requisition Entry task to make any necessary changes, and reprint the requisitions. When the printed requisitions are correct, update the print file. Updated requisitions will not print again except with the reprint option.


Just as you printed requisitions, use the Purchase Order Print task to print current purchase orders. The same print options and processes for requisitions are used. Always verify that purchase orders were entered correctly. If necessary, use the Purchase Order Entry task to make any changes before updating the print file.


If desired, print reports from the Purchase Order Reports Menu. Different reports on that menu can show the current status of all or selected open requisitions and purchase orders, and the cash requirements, by required date, of all outstanding purchase orders.


Convert Requisitions

Although you can convert individual requisitions into purchase orders by entering the requisition number in the Purchase Order Entry task, you can also convert an entire group of requisitions by updating the Purchase Requisition Register. The register may include entries for several days and should be printed and reviewed before converting requisitions to purchase orders. Any requisition with the Hold For Manual Release checkbox marked is not printed on the register and is not converted in the process. The requisitions are assigned the next available purchase order numbers.


Process Purchase Order Receipts

As purchase order receipts (generally called packing lists, shipping documents, or receivers) come in, stamp and date them. Use the Purchase Order Receipt Entry task to enter purchase order receipts. Purchase order receipts can be entered singularly or in groups.


Run the Purchase Order Receipt Register to obtain a list of all purchase order receipts entered since the last register was printed. Verify that the receipts were entered correctly. Use the Purchase Order Receipt Entry task to make any necessary changes, and reprint the register. When the register is correct, update the register. File the updated register for later use. When invoices are received, they will be matched to the receivers on this register.


The day’s purchase order receipts for backordered products are listed on the Suggested Backorder Fill Report, which automatically prints at the end of the Purchase Order Receipt Register whenever backordered products are received. The report is used to determine whether any customer backorders can be filled by recent purchase order receipts.


If desired, print the PO Receipt History By Vendor and the PO Receipt History By Item reports to obtain a list of all or selected receiving transactions.


Purchase Order Invoices

Vendor invoices are entered using Purchase Order Invoice Entry and paid through the AddonSoftware Accounts Payable module. Match the invoices received to the Purchase Order Receivers and verify quantities, dollar amounts on the items received.  Each detail line item is reviewed and edited to reflect any differences found between the invoiced quantity/amounts and the Purchase Order Receipt quantity/amounts.  Additional detail lines for other costs (i.e., packing and service charges, etc) may be entered so that the total of all lines matches the total on the vendor’s invoice.  Invoices not relating to inventory can be entered through Purchase Order Invoices, or through AddonSoftware Accounts Payable Invoice Entry.


Run the Purchase Order Invoice Register to obtain a list of all invoices entered since the last register was printed. Verify that the invoices were entered correctly. Use the Purchase Order Invoice Entry task to make any necessary changes, and reprint the register. When the register is correct, update the register.


General Ledger postings depend on the type of costing entered in Inventory Parameter Maintenance. Please see GL Postings for Purchase Orders for details on these postings. Items received into inventory are credited to a ‘Purchases’ account and debited to Inventory.  During the update of Purchase Order Invoices, this ‘Purchases’ account is debited and Accounts Payable Account is credited.  


Replenishment Processing

Replenishment processing enables your purchasing department to buy more efficiently, improve margins, decrease paper, and reduce inventory levels. By analyzing current inventory data and user-defined buying parameters, you can determine what items to purchase, from which vendors, and in what purchase quantities. Depending on the nature and volume of your business, this process might be performed on a daily basis.


Analyzing Replenishment Data

Specify the buyer/vendor/review date in the Replenishment Selection Options task. You can designate a series of buyer/vendor/review date combinations by repeatedly accessing the task. Once the parameters for the review cycle are entered, print the Replenishment Report. It shows recommended purchase quantities based on minimum purchase amount, maximum stocking levels, line point, EOQ, average usage, and safety stock.


Periodic Processing

Periodic processing are those tasks you perform semi-regularly to maintain the files within the Purchase Order Processing module.


Reporting Purchase Order Processes

The following reports can aid you in processing and tracking your purchase requisitions and purchase orders. These reports should be run as needed.


Open PO Requisitions Report

Shows the current status of all or selected requisitions on file.


Requisitions By Item Report

This report prints your requisitions by item. Use it to determine which vendors are supplying particular items required by your requisitions. A total by item is displayed.


Open Purchase Orders Report

Shows the current status of all or selected purchase orders which have not been completely received or updated.


Purchase Orders By Item Report

This report is the same as the Requisitions By Item Report except that the information is about purchase orders. See above.


PO Expediting Report

This report tracks purchase order items by their required date. Use it to determine if an item has arrived, is due soon, or is overdue. Items are displayed by vendor.


PO Status Report

Shows the status of all current purchase orders, including quantity ordered, received, and invoiced.


PO Cash Requirements Report

This report forecasts cash requirements based on current purchase orders and their scheduled receipt date.


PO Billed/Unbilled Report

Shows which purchase orders have been billed (Purchase Invoices have been entered)  or unbilled (Awaiting invoice from the vendor).


PO Receipt Variance Report

This report lists receipts and shows the variance between the scheduled and actual receipt date.


PO Receipt Cost Variance Report

This report lists receipts and shows the variance between receipt amount and actual cost.


PO Receipt History by Vendor

Lists purchase order receipts history for a range of vendors within an input range of receiving dates and in summary or detail.


PO Receipt History by Item

Prints purchase order receipts history for range of warehouses, product codes, and items.



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