PO - day 3

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Target Group

Purchase department

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Introduction

Contents

Creating POs

Printing of POs

Changing or canceling POs

Purchasing information

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Course Objectives

Create a new PO

Make changes to existing POPrinting a PO

To navigate through purchasing

information system

At the conclusion of this course, you will beable to:

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Purchase order

Definition

Formal request or instruction from a purchasing

organization to a vendor or a plant to supply or

provide a certain quantity of goods or services at orby a certain point in time.

Structure

Header

items

Additional data

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Creating a Purchase order

Automatically from PR

Set automatic PO indicator for material andvendor

Maintain Purchasing info recordMaintain source list

Fixed vendor

PR from MRP or Manually created PRAssign manually or automatically

Process the assigned PR to create PO

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Create PO - Manually

Manually creating a PO

With reference to PR

Select the PRs

Select the items from PR

Copy the items in to PO

Enter the vendor

Enter the prices and pricing conditions Requirement tracking number

Update the info record if reqd

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Create PO

With reference to RFQ

Select RFQ

Select the items

Copy the selected items in to PO Enter the Price and pricing conditions

Update the info record if reqd.

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Create PO

With out any reference

In this case you need to enter

Vendor code

Delivery date Item category

Account assignment category (if reqd)

Requirement tracking number

Order type ( NB For std purchase order)

Plant

Storage location

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Creating a PO (contd)

Important terms in POVendor

For creating a PO you need to enter vendor code

Vendor master should exist for this purpose if you dont want to maintain all the details for a

vendor you can create a one time vendor

Item category

Standard Subcontracting

service

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Create PO (Contd)

Account assignment category

Specification of the account assignment objects that arecharged in the case of a purchase order for a material thatis intended for direct usage or consumption.

Examples

Asset

Production order

Cost center

Types of account assignment

Single account assignment

Multiple account assignment

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Create PO (contd)

Delivery date

Date format

Day format

Week format Month format

Delivery date entered here is only expected delivery

date

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Create PO (Contd)

Example for units of measure in PO

Order quantity 24

Order unit Box

Gross price per unit $10

Order price unit (number) 1

Order price unit (of measure) kg

Conversion factor 24 boxes 1 kg

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Create PO (Contd)

Conditions

This component enables you to store pricing stipulationsagreed with the vendor

Examples are applicable discounts or surcharges, or

stipulations regarding the payment of freight costs in thesystem.

There are three kinds of price in Purchasing:

Gross price

Price without taking any possiblediscounts and surcharges into account

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Create PO (Contd)

Net price

Price taking any applicable discounts andsurcharges into account

Effective price

Net price after deduction of cash discount,with allowance for any miscellaneousprovisions, delivery costs, and non-deductible taxes.

Terms of Payment Example

Within 14 days 2% discount

Within 30 days due net

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Create PO (Contd)

Inco terms

Incoterms are internationally-recognized terms

of delivery reflecting the standards set by the

International Chamber of Commerce (ICC). Example

FOB - Free On Board. This means that the buyer hasto bear all costs and risks of loss of or damage to thegoods from that point.

You can specify Incoterms for an order item that differfrom those in the PO header.

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Creating PO from outline

agreement

In the initial screen for Create PO,

Select theOutline agreement and items

Copy the items in PO

In the item overview screen

Enter the quantityIf the quantity exceeds the target quantity

system gives a warning

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Texts in PO

Header texts

Header note

Pricing types

Dead lines Terms of delivery

Shipping instructions

Terms of payments warranties

Penalties for breach of contract

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Confirmations from the

Viewpoint of IM

When you post goods receipts, there are several

ways of finding the associated purchase orders.

Enter the PO number

If you establish a link via the PO number itself,the relationship is unique

i.e. one goods receipt (GR) against one purchase

order

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Releasing the PO

Release Procedure for External PurchasingDocuments

External purchasing documents (i.e. purchasingdocuments other than requisitions) are released atheader level.

Item-by-item release is not possible.

These documents can only be released using therelease procedure with classification.

Release Conditions

The release conditions determine the releasestrategy in accordance with which a PO is to bereleased.

If a PO does not meet the conditions for a release strategy, it

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Release procedure

Release Strategy

The release strategy defines the approval process for

purchasing documents.

The strategy specifies the release codes necessaryand the sequence in which releases have to be

effected.

A maximum of eight release codes can be defined.

The assignment of the release strategy to a

purchasing document is based on the release

conditions.

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Release procedure

Release Code

Definition

The release code is a two-character ID allowing a person to

release (clear, or approve) an external purchasingdocument.

Who may work with which release codes is basicallycontrolled via a system of authorizations.

Release Prerequisites The release prerequisites indicate the sequence in

which PO must be approved via the release codes.

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Printing a PO

Menu path

Purchase order -> Header -> Messages

Data required

Output type Medium

Communication method Select the printer

Further Data Repeat output

Change output

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Changing and blocking POs

If you change a PO after it has been sent to thevendor, a change document is generated that canbe sent to the vendor.

This tells the vendor what you have changed.

If the goods have already been delivered, then thechanges you can make to the PO are limited.

For example, you cannot change the quantity to

one that is less than the quantity delivered. If the invoice has been received or the goods have

been paid for, and your intended change affects theprice, the change will be ineffective.

You can display the PO history for an item to

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List displays

List of POs for a vendor or for a range of vendors This gives the details of the purchase order like still to be

delivered, still to be invoiced etc.

List of POs for a material or for a range of materials List of POs for a account assignment

List of POs for a requirement tracking number

Reporting

General analyses

Order value analyses

Subcontracting stocks per vendor

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Material

Purchasing values

Purchasing quantities

On time delivery Qty reliability

Frequencies

Vendor

Material group

Purchasing group