Purchase Order Setup Guide

Overview

This guide covers the setup of the Purchase Order (PO) application. The Purchase Order application covers the creation and processing of purchase orders for stock inventory, miscellaneous items, or services. The Purchase Order system is deeply integrated with the Inventory Control, Advanced Inventory Control (Coil & Lot tracking), Order Entry (Sales Orders), Project Management, Task Management, Accounts Payable, and Accounting applications. The Purchase Order application setup should be completed after the System Manager Setup Guide and the General Ledger Setup Guide have been completed to avoid running into any roadblocks.

A solid understanding of the client's inventory accounting model is required to accurately set up the Item Master OHF records and Purchase Order default accounts.

Initial Setup

Review/Discuss Purchasing Sales Tax Policies

Work with the client to determine how taxes are handled for purchases. Under most circumstances, items purchase for resell are not taxed, and the majority of our clients do not regularly charge tax on POs. However, every industry and state is unique, and nothing should be assumed when it comes to taxes.

Review and update the following items in regard to taxing on purchase orders:

• POUSETAXFLAG Setup Option - Uses the taxable flag from each item record
• POSPLITTAX Setup Option - Splits up tax amounts in the ITEMACT records; posts tax amounts separately, and keeps received inventory value at the cost before tax
• Vendor Tax Rates in the Remit To attribute
• The taxable flag in PO Line Item Entry must be checked, and the vendor (or the Tax% in PO Header) must have a tax rate in order to calculate taxes on a PO

Review the Default PO Clearing Account

The PO Clearing Account is used to balance/clear the inventory/cost value from the PO receipt transaction to the AP Invoice transaction.

• Review/Update the PO Clearing Account in CID Maintenance-Accounts-Clearing. This is the lowest hierarchy for determining the PO clearing account.
• Review/Update the PO Clearing Account in each Warehouse-Accounts screen. The Warehouse entry will override the CID Maintenance entry.
• Review/Update the PO Clearing Account entries in the Item Master OHF record. The Item Master OHF record will override all other entries.
  • The item-level PO Clearing Account entries are easiest to review in SQL, under the ITEMDET database table.

Establish the Authorized Buyers

Assign the 'Buyer in PO System' attribute to all employee contact records that should appear in the Buyer drop-down list.

• The POUSERISBUYER CID Setup Option will set the logged-in user as the buyer for any new PO, as long as the logged-in user has the 'Buyer in PO System' attribute.
• The CONFUSER CID Setup Option will default the UserID of the logged-in user in the Confirm To field for any new PO record.

Purchase Order Form(s)

Work with the client to determine how many PO form layouts will be needed for their operations. Most clients only need a single PO form, but Adjutant can accommodate unique forms that will default in from the POTYPE rule.

• The default PO form from MASTER should only need minor customizations for disclaimer areas, and to confirm that the logo images scale and display correctly.
• Make any further customizations and create additional forms as needed.
• Get client approval on all PO forms.
• The default PO form can be set in the PO Types rule, and individual vendors can be set to a default PO Type in the 'Sold From' attribute.

Vendor Pricing

Custom purchase pricing can be set up by combinations of vendor cost group, item group, and entity similar to customer pricing. The Vendor Pricing setup is similar to customer pricing. It has been rare that clients price/cost their purchases by vendor cost groups. Confirm whether the client has any custom vendor pricing that is defined by vendor groups.

• If the client does not have any group pricing rules, vendor pricing can be set in the Item Master C/V Part screen.
• If the client has vendor pricing that is defined by vendor groups, define the groups in the Vendor Cost Groups (ENTVGRP) rule, and set up the Vendor Pricing screen.

Set the Next PO Number

Review and update the 'Prefix' and 'Current Number' values in the CID Maintenance Counters tab for the PONO line. Establish the beginning PO number.

Review and Update Rule Maintenance Records

Departments (DEPT) The DEPT rule sets the available departments for multiple applications, including Task Management, Resources, Item Control, Production, and Purchase Orders. If the client intends to categorize purchase orders by department, verify that the needed department records exist.

The department entry marked as Default will populate the department in a new Purchase Order, unless the logged in user has a Resource attribute set with a department.

Doc Vault Drop Folders (DROPFOLDERS) Review the drop folder entries for Vendor Bids (BPONO) and Purchase Orders (PONO).

FOB (Free on Board) Codes (FOB) FOB Codes are valid in Order Entry and Purchase Orders. Generally, FOB defines the point at which the seller is no longer responsible for the shipping cost.

The rule in MASTER has the most common entries, and should be valid for most clients. Add any additional FOB codes as needed.

Freight PO Item (FREIGHTPOITEM) The Fright PO Item is only used for clients that are generating purchase orders from shipping event records. The item in this rule is used as the line item when generating a freight PO.

Freight Terms (FREIGHT) Freight terms are valid in Order Entry, Shipping, and Purchase Orders. Add any needed freight types to this rule to populate the list of available freight types in the associated applications.

PO Bid Types (POBTYPE) The PO Bid Types rule sets the available bid types for the Vendor Bid application, the associated PO form to use, and which PO Type to use if the bid is converted to a live PO.

The MASTER rule has a default entry. If the client is planning to use Vendor Bids, confirm that all needed bid types are set up.

PO Comment Codes (ORDNOTE) The PO Comment Codes rule allows users to set up predefined notes that can be included on purchase orders. The functionality is similar to the comment codes that can be used on orders and invoices. Add any needed quick PO comment codes in this rule.

PO Date Defaults (PODATES) The PODATES rule controls how the PO Req Date and the PO Est Date are set on a new PO. The rule allows you to override the default logic when creating new POs. Verify the entries in this rule are what the client wants.

PO Form Number of Copies (POOPTION) The POOPTION rule provides one of the more comical internal rule names. If the client needs anything other than one copy of the PO form to print with every request, update the rule accordingly.

PO Form Section 4 Overrides (POBLOCK4) The POBLOCK4 rule was created to hold certain print overrides based on FOB and PORT entries for a specific customer. Review ECR 23735 to determine if this rule would be useful for your client.

PO Ports (PORT) The PORTS rule holds the valid entries for the Port drop-down list on a purchase order. If the rule is empty, Port will not be filled in and will not be required in order to add a PO.

PO Types (POTYPE) The POTYPE rule controls the valid types, default form to use, GL Group, and which type is the default entry. If the client is not interested in controlling or reporting purchase orders by type, an entry is still required as the default type.

Ship Via Codes (SHIPVIA) The SHIPVIA rule sets the valid drop-down entries for the Ship Via field in the Order Entry, Purchase Order, and Shipping Events applications. The rule also controls several alerts and automated reflexes, like generating shipping events, or adding certain charges.

Review this rule carefully for any special options and reflexes. Add any needed ship via methods to the rule.

Terms of Payment Codes (TERMS) The TERMS rule controls the valid terms of payment for both the AR and AP applications. Reconcile the entries against the customer questionnaire and the Open AP Invoice import data (if customer's data includes payment terms). Add any needed terms and delete any terms that are not needed. Too many TERMS options generally add user confusion and can create invoice records with unwanted terms.

Review and Complete Additional Purchase Order Setup

Set up Templates and Recurring Orders

Discuss Purchase Order Templates and Recurring Purchase Orders with customer.

• Set up any templates and/or recurring orders as needed with the customer. Use the Recurring Order WIki as a reference for the recurrence codes.

Confirm version of PO Receipt Screen

Adjutant has a legacy version of the PO Receipt screen that is still in use, and has been used at new clients for specific functions. Generally, new clients should be using the 'New' PO Receipt screen for all receiving functions.

The NEWPOREC CID Setup Option should be enabled to make the 'PO Rec' button in the PO screen open the new version of the PO Receipt screen .

Remove any menu selections that point to the legacy screen and make sure that all menus and shortcuts point to the desired PO Receipt screen.

• If the customer will use the legacy screen for specific purposes, create a shortcut to the screen on the specific user's desktop.

PO Receipt Cost Update Options on the SO

There are a few different options for updating the Sales Order (SO) line unit cost from a linked Purchase Order (PO) line. Below are some of the CID Setup Options available, and how they work to update the linked SO cost.

PORECUPSOCOST: The PORECUPSOCOST is the default setup option for most customers who want to update the SO line item unit cost once the linked item is received. The PORECUPSOCOST option requires that the PO line item code and the SO line item match. For example, even with the setup option enabled, if you have an item code of BOLT1001 on the SO, but the linked PO line item is MISC (or anything other than BOLT1001), the cost will not update.

• The PO line has to be properly linked to the SO line in order for the update to take place. This can happen by generating the PO from the SO, or by linking the two lines after both the PO and the SO have been created separately. As long as the PO and SO lines are both linked when the PO Receipt is processed, and the item codes are a match, the unit cost recorded on the PO Receipt will update the unit cost on the SO.
• This option will also update the linked SO cost upon edit of the linked PO line cost if the item codes match.
• This option will also keep the PO quantity linked to the SO line quantity ordered in sync by updating the SO line quantity when the PO quantity is changed.

PORECUPCOST2: This option is only to be used in very specific types of operations. The PORECUPCOST2 option requires that the PORECUPSOCOST option ALSO is enabled. With these options both enabled, the extended cost of all received quantities on the linked PO line will be updated to the SO line. This is for situations where the SO quantity being sold differs from the item(s) and quantities being purchased. For example, if selling 1 Rope Assembly on the SO, but ordering 20 feet of X Gauge Rope on the PO, the extended cost of the 20 feet of rope would be pushed back to the linked SO line. This updates sets the sum of the PO cost received rather than the individual unit cost as the unit cost on the linked SO line. This update make several assumptions and can create several problems with unit cost if it is not used in the right environment.

• The PORECUPSOCOST requirement to match the item code between PO and SO is ignored when PORECUPCOST2 is enabled.
• This setup option is very specific to certain ordering processes, and it is a global option, so it is not recommended unless ALL linked ordering processes support this model. This is a very rare option.

PORECUPCOST3: The PORECUPCOST3 option will update the unit cost on a linked SO line from multiple linked PO lines. This option assumes that when multiple PO line items are linked to a single SO line, the total of all received cost on all linked PO lines should update/add to the single SO line. For example, if you sell a KIT1001 on the SO line, and link 4 different PO lines for the 4 different items and quantities needed, the total of all received cost for the linked PO lines will be pushed to the single SO line. The SO cost update also takes the SO sold unit into account. In the example above, if you were selling 2 KIT1001s on the SO and received a total of $100 worth of material across the 4 PO lines, the SO cost would be $100 / 2 or $50 per sold unit.

• Similar to PORECUPCOST2, this setup option is very specific to certain ordering processes, and it is a global option, so it is not recommended unless ALL linked ordering processes support this model. This is a very rare option.

PORECUPSODESC: This option works similar to PORECUPSOCOST and assumes a 1-to-1 linek between the PO line and the SO line. It also requires that the item code match between the PO and the SO. This option will use the PO line item description to update the line item description on the SO. The SO line item description update can happen during a line edit on the linked PO if the item codes match.

Scrub and Import Open Purchase Order Data

Open Purchase Order conversions are rare. Generally, the amount of open purchase orders for any client is small enough that it is not worth going through the scrub and import process. The value of having the end-user train on the PO system by entering the open orders manually usually outweighs the amount they would spend on having ABIS complete a data import for a a handful of records.

If the client requires an open purchase order conversion, refer to Purchase Order Conversion Guide (UNDER CONSTRUCTION) for detailed information on the import and reconciliation process.

Review System Functionality

Once all core system setup has been completed, perform the following system functionality tests. Some of these will require additional setup in other areas in order to create transactions and report data for testing. Work through each associated setup guide to complete the required setup and verify that each area below is functioning as expected in the new server setup.

• Verify that reports can be previewed
• Verify that drilldowns work, this uses an HTML viewer different than previewing a regular report
• Verify that the doc vaults are accessible
• Verify that printing is working
• Verify that both outbound/inbound emailing are working