About purchase order processing options

In general, the Purchase orders (PO301000) window is the starting point for creating a purchase order, and employees can use this window to track the processing of the order.
When creating a new order, you should first select a supplier and the supplier location.
Then you can add stock items by clicking the Add item button in the table toolbar of the Document details tab and selecting from only the supplier's items or from the entire list of stock items.
If you want to add non-stock items of any type (Labour, Service, Non-stock, or Expense), you can select them by their item IDs.

If the Blanket and standard purchase orders functionality is enabled in the Enable/disable functionalities (CS100000) window, you can add a blanket purchase order or a line of a blanket purchase order.

A newly created purchase order has the On hold status.
To reduce input errors on order entry, validation of order totals can be set up by selecting the For normal and standard orders check box in the Validate total on entry section of the Purchase order preferences (PO101000) window.
If this check box is selected, then when you create new purchase orders in the Purchase orders (PO301000) window, to take the order off hold, you must enter each order total in the Control total field after verifying the order details.

If approval of purchase orders is not configured in your system, a purchase order may need to be emailed, or printed once you take it off hold.
After that, the order is given the Open status.
If approval is configured, the order is given the Pending approval status once you take it off hold, which will change to Pending printing, Pending email, or Open once all the assigned approvers approve it.

How an open purchase order will be processed further depends on the types and properties of the items included in the order.

As you add a stock item to a purchase order, the system inserts Goods for warehouse as the line type for this line.
The Line type setting indicates how the purchase order line should be processed.
If a purchase order includes only stock items intended for inventory and not linked to a drop-ship order or any other sales order, its processing involves creating of a purchase receipt (or multiple receipts if the order is fulfilled by multiple shipments from the supplier).

You can create a receipt for a purchase order by clicking Actions - Enter purchase order receipt in the toolbar of the Purchase orders (PO301000) window.
Alternatively, in the Purchase receipts (PO302000) window, you can create a receipt and link it to an existing purchase order or a particular line of the order by clicking Add purchase order or Add purchase order line on the table toolbar of the Document details tab.
The inventory account that is used for a stock item on a receipt by default is selected according to the Use inventory/accrual account from setting of the posting class.

On release of each receipt linked to the purchase order, the system automatically generates an inventory receipt for the items listed in the purchase receipt and calculates the quantities of the received goods for each order line.
These values are displayed in the Qty. on receipts column on the Document details tab of the Purchase orders (PO301000) window.

The order gets the Closed status once every line is completed according to the line completion rules (described below).

Then for each receipt linked to the purchase order, you can create a invoice or multiple invoices.

Line completion rules

By default, a line of a purchase order is considered completed if all the ordered quantity has been received.
For each supplier, in the Suppliers (AP303000) window, you can specify the line completion rules for order lines with stock items.
You can specify a threshold percent (in theThreshold receipt (%) field on the Purchase settings tab) for completing the lines of purchase orders.
By default, this value is 100, which means that 100% of the specified quantity must be received for lines to be completed.
This setting provides the default value for the Complete on (%) setting on purchase orders created for this supplier.
You can change the Complete on (%) setting for any purchase order. Alternatively, you can also specify the min. receipt (%) and max. receipt (%) values, to define the range of quantities, and the Receipt action (Reject, Warn but accept, or Accept) to apply to the receipt if the received quantity for any line is outside this range of quantities.
These settings specified for a supplier provide the default values for the same-name settings on lines of any purchase order for this supplier.

When a receipt linked to the purchase order is released, the system will complete the line if the total quantity on receipts becomes equal to or greater than the threshold quantity (calculated as the threshold percentage of the ordered quantity).

When you create a new receipt in the Purchase receipts (PO302000) window, you can manually complete a line of the linked purchase order by selecting the Complete purchase order line check box on the line of the purchase receipt.

For each non-stock item, you can specify whether a purchase receipt is required by using the Require receipt check box on the General settings tab of the Non-stock items (IN202000) window. This setting affects the processing of non-stock items.
If a purchase order includes only non-stock items that require receipt, its processing involves creating a receipt (or multiple receipts if the ordered items are not delivered at the same time).

If the Require receipt check box is selected for the non-stock item, the following accounts and subaccounts will be used:

• When a purchase order is created, the item amount is recorded to the expense account (with the expense subaccount)
• When a receipt linked to the purchase order is created, the line amount is moved from the expense account (with the expense subaccount) to the purchase accrual account (with the purchase accrual subaccount)
• When a invoice is created for the receipt, the amount is moved back from the purchase accrual account (with the purchase accrual subaccount) to the expense account (with the expense subaccount).

The expense and purchase accrual accounts to be used for receipt-related transactions are defined by the posting class of the item; the default accounts assigned to the item on the General ledger accounts tab of the Non-stock items (IN202000) window will be used if the posting class's rules Use COGS/expense account from and Use purchase accrual account from, respectively, point to them (that is, have the Item option selected). The expense subaccount and purchase accrual subaccount are also defined by the settings of posting class of the item; the default subaccounts assigned to the item on the General ledger accounts tab will be used as the segment value sources for the resulting subaccounts according to the Combine COGS/expense sub from and Combine purchase accrual sub from rules, respectively.

Line completion rules

When a receipt linked to the purchase order is released, to determine if the order line is completed, the system applies the rule that is specified for each non-stock item in the Complete purchase order line field in the Non-stock items (IN202000) window, which is one of the following:

• By quantity (the default option for items of the Non-stock type)
  The order line will be completed on release of a receipt if the item quantity specified on all linked receipts is equal to or exceeds the order line quantity.

  The system processes the purchase price variance amounts (if any) for the non-stock item.

• By amount (the default option for items of the Labour, Service, Charge, and Expense types.)
  If the Require receipt check box is selected for this item, the order line will be completed on release of a receipt if the item amount on all receipts is equal to or greater than the order line amount.

If a purchase order includes only non-stock items that do not require receipt (that is, the Require receipt check box is cleared for each item in the Non-stock items (IN202000) window), its processing doesn't involve creating a receipt. An invoice or multiple invoices can be created directly for the purchase order.

Line completion rules

When a receipt linked to the purchase order is released, to determine when the order line is completed, the system applies the rule that is specified for each non-stock item in the Complete purchase order line field in the Non-stock items (IN202000) window, which is one of the following:

• By quantity (the default option for items of the Non-stock type)
  The line will be completed on release of a invoice if the item quantity specified in the invoice is equal to or exceeds the open quantity in the order.
• By amount (the default option for items of the Labour, Service, Charge, and Expense types)
  This option indicates that the order line will be completed on release of a invoice if the amount of the invoice line is equal to or exceeds the uninvoiced amount of the order line.

If a purchase order includes stock and non-stock items of various types, its processing includes creating of a receipt or receipts, but not all the items from the order will appear on the receipts.
You can use the Purchase order details by account (PO612000) report to view the order lines with non-stock items listed by the expense account.

You will need to create invoices based on receipts linked to the order and invoices based on those lines of the original purchase order whose line items do not require receipt.
Alternatively, you will need to manually add the items not requiring receipt to a invoice based on a receipt.

You may need to reorder a line or multiple lines in the existing purchase order, or add a new line at the beginning of a list or in the middle of the list.
You can reorder lines in a purchase order that is on hold.

The order number of the purchase order line on the Document details tab is shown in the Sort order column (which is hidden by default).
Once you reorder the lines, the system automatically regenerates the Sort order numbers for each document line.
You can select the lines to be reordered in any combinations, such as the following:

• A single purchase order line (for example, line 3 or 8).
  To select a single line, click it.
• Multiple non-contiguous lines (for example: lines 1, 3, and 7).
  To select these lines, hold Ctrl while clicking the row selector next to the needed lines.
• A contiguous group of purchase order lines (for example: line 5 through line 9).
  To select a group of lines, select the first line in the group, and hold Shift while clicking the last line in the group.
  (Alternatively, you can click the first line and then press Shift+Down arrow until all the needed lines are selected.)
• A non-contiguous group of purchase order lines (for example, line 5 through line 7, and line 10).
  To select a non-contiguous group of lines, hold Ctrl while clicking the row selector next to the needed lines.

All selected lines are grouped and thus are moved contiguously, even if you have selected multiple non-contiguous document lines.
After you have selected the needed lines, move them to the new place in the table in one of the following ways:

• Drag the selected line or lines to the place where you want to move them.
  A thin red line between the table lines shows where these lines will be inserted.
  Once you drag the selected lines, the system moves these lines and regenerate the Sort order numbers for all the lines in the table.
• When you need to move purchase order lines between pages, cut the selected purchase order lines and paste them to the new place in the table.
  To cut the lines, press Ctrl+X, or right-click the table and then click Cut row.
  Then click the line above which the cut lines should be inserted, and press Ctrl+V; alternatively, you can right-click the table, and then click Insert cut row.

Once you reorder the lines, the system automatically regenerates the Sort order number for each document line.
You can cancel the line reordering by clicking Cancel in the window toolbar before you save these changes.

Inserting lines into purchase orders

You can insert a single line anywhere in the table.
To do this, click the line above which the new line should be inserted and then press Shift+Insert, or right-click the needed line and then click Insert row.
The system adds a new blank line.
When you finish populating the line information and save your changes, the system automatically regenerates the Sort order numbers for all lines in the table.

To check on the fulfilment of a purchase order, you can use the Other information tab of the Purchase orders (PO301000) window, where the system tracks the open quantity and open balance.
For a purchase order with the Normal or Drop-ship type, the open quantity is calculated as the difference between the quantity of ordered goods and the quantity of received goods on this order.
For a purchase order with the Blanket or Standard type, the open quantity is calculated as the quantity of the ordered goods and the received quantities on orders of the Normal type that are linked to this blanket purchase order.
The open balance is calculated as the difference between the total amount of the ordered items and the amount of the received items included in purchase receipts linked to the purchase orders.

When the open quantity and open balance values are calculated, only released receipt documents are used for calculation.

Notice that is not possible to change the item ID or UoM for any partially received line of a purchase order.

If due to changes in the business process your organisation needs to switch to another UoM when purchasing a particular item and delete the rules for converting this old UoM to the base UoM, you must fulfil the following steps:

1. Define the new UoM and specify the rules for converting this UoM to the base UoM
2. Complete any purchase orders with this item's open quantities specified in the "old" purchase UoM
3. Create new orders for the remaining (unreceived) quantities specified in the "new" UoM

Notice that it is not possible to delete an UoM specified for a stock item in the Stock items (IN202500) window (or for a non-stock item in the Non-stock items (IN202000) window) if there are any released or open transactions with this UoM.