Purchase orders

Purchase orders are a contractual agreement between you and the supplier for the provision of goods and services for a price.

Lifecycle of a purchase order

Orders placed with your suppliers are contractual agreements between you, the customer and the supplier about delivering products or providing a service on time and at an agreed price.

Strong order management allows you to maintain order visibility throughout the life cycle of an order from demand creation to supply fulfilment.

Create orders

Record orders you want your supplier to fulfil. You can:

Record purchase requests on an individual basis.
Generate suggested orders, which generates a list of items due to be ordered based on the stock level set for stock items and any outstanding sales orders. From the generated list you can then select those you want to create orders for.
Generate orders to fulfil purchase requisitions.

Authorise orders

Order authorisation is optional. You can set up rules to select which orders require authorisation, based on their value and who has placed the order.

Produce order documentation

You can print orders. Copy purchase orders can also be printed for office use if required.

Confirm goods received

Record delivery of goods, where the goods received are matched to the purchase order. You can also include recording services that have been satisfactorily completed.

Record invoices

You can match the invoice to the purchase order or the record of goods received. Those with discrepancies can be marked as disputed provided you set the system to use disputed invoice processing. This stops the invoice being processed further until the dispute is removed or the disputed value can be written off.

Monitor order progress

Interrogating your Purchase Order Processing system is important at all stages of the order life cycle to monitor order progress.

Return goods

Sometimes goods are returned, and dealing with returns is another stage in the order life cycle. The goods are recorded as returned and then despatched. On receipt of the supplier's credit note the information is matched against the goods returned record.

Depending on how you set up your system you may not need to complete all of these stages; e.g. order authorisation.

Contents of a purchase order

Purchase orders are essentially assembled using supplier details and the goods and services you buy.

Supplier details

Supplier details are managed in the header section of the purchase order. These details include information such as the supplier's name, address and terms of business. You can change the details in the order header to match those that you want displayed using the Sage Report Designer. For more information, see the Sage Report Designer help.

During order entry the system calls on and displays the address stored for the supplier. This address is specified in the supplier's record held in the Purchase Ledger.

Goods, services and charges

The detail section of the purchase order comprises lines. These order lines itemise the goods and services requested including any additional charges incurred and are categorised by line type. The line types cover:

Standard item	Standard items include several product types that are managed in the Stock Control module; these cover stock, miscellaneous and service/labour. Each product type has its own specific characteristics that determine how they are managed in the system. A standard item is selected using a code and the item's information, such as price and discount, is displayed. The quantity required is entered and depending on your system settings it may be possible to amend some of the information that is displayed for the item.
Free text item	There are no stored item records for free text items and as such they provide the least control, but they can be processed as other items. Free text items can be used for anything that requires value information, assigned that is not covered by a standard item, as well as being used to add descriptive text to an order.
Additional charges	Charges are often added to an order to cover costs such as delivery or warranty. These costs are managed as additional charges. Each additional charge has its own record detailing its VAT rate, value and nominal account for revenue postings. During order entry an appropriate charge can be applied to the order.
Comment lines	These provide a means of adding information to an order. The comment is generally printed on the order documentation, however you can prevent the information from printing if you want to keep the information private.

Note: The Sales Order Processing module also uses sales order items that are unique to the SOP module. Sales order items cannot be ordered using Purchase Order Processing.

To create purchase orders

There are a number of ways to create purchase orders. You can:

Generate suggested purchase orders: a quick and effective way of generating several purchase orders at the same time. It is a semi-automated activity where the system prepares a suggested order list. The suggested list is based on the goods assigned with the item type stock, which are maintained in the Stock Control module. It does not generate orders for item types service/labour or miscellaneous, or sales order items that are maintained in the Sales Order Processing module.

Note: To generate orders, you must enable the POP setting to Automatically generate order and return numbers.
Generate orders from requisitions: If you use purchase requisitions, you can generate purchase orders from authorised requisition lines. Once the individual lines in the purchase requisition have been authorised, you can amend any details about the items required and choose how they will be fulfilled. For example, you can choose which suppliers to order from, or you may want to fulfil from existing stock.

Note: To generate orders, you must enable the POP setting to Automatically generate order and return numbers.
Enter an order from new: involves several tasks requiring you to enter order details, which include supplier, delivery and invoicing information. Adding the goods or services required to the order in the form of order lines. Completing order confirmation, where the order totals are displayed and checked before the order is finally saved.
Copy an existing purchase order: the order details are copied, excluding order number and dates. The copied information can then be amended before completing order confirmation.
Create a new purchase order from the Manufacturing MRP module (if you are using Manufacturing): a way of ensuring uninterrupted manufacture of demand items listed in the Manufacturing MPS module.

Note: To create purchase orders from MRP, you must enable the POP setting to Automatically generate order and return numbers.

Once orders have been created, provided they are not on hold or require authorisation, they are ready for print.