Purchasing

 Introduction

 Purchasing is the process a business or organization uses to acquire goods or services to accomplish its goals. Although there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly between organizations.

Purchasing is part of the wider procurement process, which typically also includes expediting, supplier quality, transportation, and logistics.

Purchasing Setups

Procure to pay (purchase to pay or P2P) is the process of obtaining and managing the raw materials needed for manufacturing a product or providing a service.

Manages the entire procurement cycle from requisition to payment..more

Transaction Process Flow

1. Purchase Requisition to Auto Create PO 

Certain business cases PO will be created automatically with reference to the Purchase Requisition. Here we can see how to convert PO from PR...more

2. Manual Creation of Standard Purchase Order

Purchase orders can be created manually by through the purchase order form....more

3.  Purchase Order Receiving & Invoice Creation

Once the material is supplied by the supplier the material can be received through the receipt screen....more

4. Blanket Purchase Agreement 

This kind of Purchase Agreement is used when we are not sure about quantity, price, delivery schedule. It will be informed to supplier by creating Blanket releases against blanket BPA...more

     4.1 Blanket Releases & Receipt

You can issue a Blanket Release against a BPA to place the actual order..more

5. Planned Purchase Order

 In this type of PO you are committing a purchase of item/s with particular quantity and particular price with terms but we still don't know the delivery schedules. We know the tentative shipment schedule only. When you make a release, you are committing the delivery also.

Eg: Dealer need 1000 Cars yearly, so the PPO qty is 1000 and   have the tentative delivery schedules. 

Need to create Scheduled Releases only when you need the material. (Say 10 shipments with 100 quantity each) That will be the confirmed shipment date...more

     5.1 Scheduled Releases: 

You can issue Scheduled Releases against a planned purchase order to place the actual orders...more

6. Contract Purchase Agreement

This type of Purchase Agreement is used when you are not sure even about the item which need to be purchased. The only information that you provide in a Contract PA is supplier, supplier site, payment terms and agreement control details you can later issue standard purchase orders referencing your Contract PA.

Eg: Contract PA made between you and supplier who has Import/Export license. Whenever you need any item to run your business, you will generate standard PO referring the Contract PA for importing that Item/s....more

7. Different Type of Receiving Options

Different methods of Receiving,

7.1. Express Receiving

The express function is a quick method of entering receipts and receiving transactions.

We can deliver in single step/process

1. Multiple PO of the Single supplier

2. Multiple Item in Sinlge PO.              

1. Enable Allow Express Transactions in Receiving options.

2. Sub Inventory is Mandatory in PO – Distributions.

3. Receipt Routing depends on the value of this Profile Option 'RCV: Allow Routing Override'..more

7.2. Cascade Receiving

The Cascade function facilitates the distribution of a given quantity of an item from a single supplier across multiple shipments and distributions.

You cannot cascade RMA receipts.

We can deliver to multiple locations/subinventory.

1. Same supplier with multiple PO

2. Same Item in multiple shipment or in different POs.              

1. Enable     Allow Cascade Transactions in Receiving options.

2. Sub Inventory is not Mandatory in PO – Distributions.

3. Receipt Routing depends on the value of this Profile Option 'RCV: AllowRouting Override'...more

7.3. Unordered  Receiving

You can receive items from a supplier when you do not have a corresponding purchase order but want to receive the items. so you can track them on the system while you wait for a buyer to decide which purchase order to use

1. Enable Allow Unordered Receipts in Receiving options.

2. Match the Unordered Receipt with the New PO / Existing PO....more

7.4. Blind Receiving

Blind receiving helps you ensure that receivers record the exact amount they receive. With blind receiving, you cannot see the quantity due or the quantity ordered for shipments when you receive items.

Blind receiving prevents display of expected receipt quantities in receiving windows.

1. Enable Allow Blind Receiving in Receiving options...more

7.5. Substitute

If you want to receive substitute items in place of ordered items. You must define substitute items in the Item Relationships window before you can receive them.

1. Enable     Allow Substitute Receipts in PO – Receiving Controls.

2. Define substitute items in the Item Relationships window...more