PURCHASES ORDERS

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If you completed the steps in Section III A, you now have an inventory of goods to sell. Throughout the rest of Section III, we will “follow the money” and examine the processes that allow us to purchase additional inventory, purchase non-inventory goods and services needed to run our business, sell goods to our customers, ship those goods to our customers, and collect payment from our customers for what we have sold and shipped.

The first set of processes to look at as we start down this trail is that which allows us to document and control the purchase of goods and services from vendors. The first form we will look at is the Purchase Order Detail form (Figure 54) found under Purchasing Purchase Orders.

The purchase order initiates the process of purchasing inventory items from vendors. When the Purchase Order Detail form has been completed and saved, you will most likely want to print two copies, one for the warehouse or receiving department, and one for the vendor. The vendor will use the purchase order to fill the order, and the warehouse will keep a copy of the purchase order to compare to the shipping document from the vendor when the order is received. At that point the order will be adjusted if necessary and received into inventory. Once an invoice is received from the vendor, the order will be closed and an A/P voucher created to pay the vendor. The details of your company’s procedures might differ from what has been described here. You should be able to adapt the system procedures to accommodate any differences, and you can enter purchases into inventory without using purchase orders at all by going directly to the A/P functions (this will be described in subsection D below).

The first field on the Purchase Order Detail form is the PO Number field. You can enter a purchase order number to view an existing PO (you can use the F3 SEARCH KEY to get a list of all open POs), or you can tab through this field to have the system assign a purchase order number based on the last number used.

In the Vendor field, you will want to enter the vendor number (using F3 if you need). Selecting a vendor will also populate the address and phone number fields, and set the Order Date field to the current date and Arrival Date fields to tomorrow’s date.

To the left of the address fields you see the now familiar Comments button, the functionality of which was discussed in detail when we looked at the Comments button on the Vendor File Maintenance form in Section II F.

Below the date fields to the right of the form you see a Status field and a Route field. The Status field will populate with the status of the PO once it has been entered, telling you whether it has been received and posted to inventory, posted to A/P, etc. The Route field allows you to assign a route to the PO if the order will be picked up by one of your trucks while out delivering on a regular route.

Below these fields is a large textbox for Special Instructions and then a grid which allows you to enter all items to be ordered. With the cursor in the Item column in the grid, you can use the F3 SEARCH KEY to select items to purchase from your list of inventory items. If you are purchasing a new item you will need to set it up in the Inventory File Maintenance form before you can include the item on a purchase order. Once you select an Item, The Application will fill in the Description, Freight, Pad and Cost columns on the grid. You will then indicate how many Cases or Units of the item are to be ordered and enter that information in the corresponding column. The Extended column will automatically fill with the dollar total of all cases/units ordered. At the lower right-hand corner of the grid, a total dollar value of all items on the PO appears.

You will remember when we set up inventory items using the Inventory File Maintenance form, that we specified the vendor from whom we purchase each item. We can now use the Fill Order button below the grid to fill the grid with all items assigned to the current vendor. This saves us having to enter each item individually, and only the items we use will appear on the final PO (in Figure 54 the Fill Order button is disabled because we have already entered items into the grid, so it is a little hard to read the caption - it is the third button from the left along the bottom).

If the Item is a random-weight item, meaning that it will be priced based on weight and that weight will be a variable number not available to you until the shipment is actually received, you can enter your order in terms of Cases and Units (the Extended column will remain at zero). When the PO is received, as we will discuss momentarily, you will enter the actual weight and the item will be priced out.

Once you have filled out the purchase order, you can click the Save button. When you click the Save button, a dialog box with the heading Purchase Order Created pops up in the center of the screen giving you the number of the PO you just created. Clicking OK on the dialog box brings you back to the (now blank) Purchase Order Detail form. If you enter the number just provided you by the Purchase Order Created dialog box into the PO Number field, the purchase order you just saved populates the form. You can see the Status field to the right below the Arrival Date field now displays Open. The Status field will be changed to Qty Posted when the order is received and Closed when an A/P voucher is created, as we will discuss below.

At this point you may want to Print one or more hardcopies of the purchase order. If you have not yet saved the purchase order, when you click the Print button, the purchase order will be saved at that point. You will also notice two checkboxes to the left of the Print button, Include Prices on PO? and Print Slotting List? The Include Prices on PO? checkbox is selected by default, and with this option selected a printed PO will look like that in Figure 55, showing four columns next to each item displaying cases, units, cost and extended cost. If you deselect the Include Prices on PO? checkbox, the PO will print with only two columns displaying the cases and units.

If you select the Print Slotting List? checkbox, a Slotting List (Figure 56)will print along with the PO. The Slotting List is designed for your receivers in the warehouse if you have assigned bin numbers.

The Application provides a report to assist you in creating orders. This report, the Vendor Re-Order Report, provides you with an historical perspective on sales for items purchased from a given vendor to assist you in placing orders. Because the Vendor Re-Order Report relies on sales history, we will not be looking at it until later.

When the order you just created is received, you will want to so indicate using the Process Purchase Order form (Figure 57) found under Purchasing Receive PO.

Entering the PO Number will bring up the purchase order detail. At this point you can make any adjustments necessary based on items actually received, based on the shipping document, including entering an amount in the Weight column for those items priced based on catch-weights. Note the Printed field will display the date the PO was last printed. The Qty Posted field will display the date the PO was posted to inventory once that has been done.

Once all the information has been updated as necessary based on the actual shipment, you can click the Update Inventory button to post the PO and receive its items into your inventory. Note the PO Status is changed to Qty Posted at this point. Be sure you have entered the weights for any random-weight items on the PO.

After receiving the PO, if you want to update your inventory pricing immediately (without waiting for the invoice from the vendor), you can click the Update Pricing / Inventory Only button. This will update your inventory cost figures without posting the PO to A/P. When you receive an invoice from the vendor, you can create an A/P voucher for paying the vendor by pulling up the PO again on the Process Purchase Order form and clicking the Update Pricing / Post A/P button. Clicking this button brings up the Accounts Payable form (Figure 58).

The Accounts Payable form is already populated with data from the purchase order. The Invoice Date field defaults to the current date and the Discount Date and Due Date fields display dates based on information you entered in the Vendor File Maintenance form. The Date Paid and Check Number fields in the Payment Information section at the top right will be automatically updated when a disbursement is made to this vendor for this order.

You will need to enter the vendor’s invoice number in the Invoice field before you can Save the A/P entry. Once the A/P entry is saved, the status of the purchase order is changed to Closed and no more changes can be made.

In addition to printing PO’s individually from the Purchase Order Detail form, you can also print PO’s in batches using the Print Purchase Orders form (Figure 59) found under Purchasing Print POs. This form allows you to print all open purchase orders, all still unprinted purchase orders, or to specify an Order Date or Arrival Date and print all purchase orders on that date (when you click on either of the date options a field appears in which you can enter the date – Figure 60). You can also print a list of purchase orders by entering the PO numbers in the grid. As with the Purchase Order Detail form, you can also choose whether to print prices on the POs or print slotting lists by selecting the checkboxes at the bottom of the form.

You may have noticed that when you print from The Application you sometimes see a print-preview screen and other times, as when you print purchase orders, you don’t. Generally, reports printed from The Application first give you an opportunity to view the report – and perhaps take information you need from that report without having to print it – whereas documents like purchase orders and invoices go straight to the printer.

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Creating a Beginning Inventory

TOC

Inventory Transfers