Purchase Orders – Rajawali Adikarya

What Is?

Businesses need to purchase goods and services to meet the needs of their sales initiatives. For example goods for resale or materials for production purposes need to be acquired. They need to keep track of the value of these goods and services acquired to pay for these charges and to determine charges for which payment has not yet been made. At a glance, financial executives can see what a company needs to pay, when this commitment is due and what settlement discounts would apply if paid early. Clerks can match supplier invoices to prices quoted to the buyers of the organization as well as what stores say the organization has received i.e. you only pay for what you received at the price quoted to the buyer.

Charges need to be allocated correctly to an appropriate expense or asset account in the general ledger. Payments need to be recorded in the general ledger and at any point in time the general ledger needs to reflect the total monies owing for all supplier invoices not yet paid, as reflected in the accounts payable ledger.

The Purchase Order system provides an efficient method for recording inventory requisitions from users and purchases from suppliers. Included are facilities for maintaining, verifying and reporting supplier delivery performance reports, supplier contracts.

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SYSPRO Solution

The Purchase Order system includes a Goods Received Notes Suspense System (GRN) for Accounts Payable invoice matching; a Requisition System and a Supplier’s Performance report, along with free-format requisitions and foreign currency options. Goods can be received directly into a warehouse or can go through an inspection phase. Various pricing mechanisms can be used, such as contracts with suppliers, foreign prices, the warehouse cost or last cost from the supplier.

Process Flow

Staff request to purchase goods to meet a customer demand or service. Requisitions may also be raised for goods and or services required for internal purposes (e.g. stationery, consulting services, etc.) Once these requisitions are approved then the buyers create purchase orders and a copy is given to the supplier and the stores for their records. Suppliers deliver the goods to the relevant warehouse. The stores personnel check the goods and quantities back to the original purchase order. The goods can be inspected and once accepted, receipted into stores. The suppliers then create an invoice based on their delivery note and your acceptance of their goods. This invoice is posted to the company and input in the Payables system and matched back to the relevant Goods Received Note received from stores. This invoice is then sent to the buyer for approval and thereafter it is paid according to the company’s cash flow position and the invoice terms which have been defined.

Purchase Orders Process Flow

Purchase Orders Process Flow.png

Integration

The Purchase Orders solution can be run standalone or be integrated to other solutions. These solutions include:
• Inventory
Stock code master information is used from inventory, as well as stock availability.
• Work in Progress
Stock issues can be linked to a job directly from Purchase Orders.
• Sales Orders
Purchase orders and requisitions can be raised directly from sales orders and back orders. The system can be configured so that when the linked purchase order is receipted, it updates the sales order quantity-to-ship.
• Requirements Planning
Purchase orders are used in the calculation of supply, and suggested requisitions generated by the Requirements Calculation can be transferred to live requisitions and purchase orders.
• Accounts Payable
Supplier master information is used from accounts payable while purchase order GRN transactions are used for GRN matching purposes during accounts payable payment processing.
• Quotations
Purchase orders and requisitions are raised in Quotations.
• Landed Cost Tracking
Foreign purchase orders are captured in purchase orders and landed cost tracking is used to determine shipment due dates.
• Factory Scheduling
Advanced scheduling takes note of purchase order information.

Accounts Payable
Purchase Orders integrates with Accounts Payable if either of the following options are selected on the supplier master record:
• Purchase orders allowed
This enables purchase orders to be raised against the selected supplier for the purchase of stocked and non-stocked items.
• GRN Matching Required
This enables goods received note (GRN) matching for the supplier during processing in the AP Invoice Posting program.

Factory Scheduling
Advanced scheduling takes note of purchase order information.

General Ledger
Although the Purchase Order module does not directly integrate to the General Ledger, you can specify a ledger code at the time of entering a purchase order line for a non-stocked item that is not allocated to a job. In addition, you can enter adjustments to outstanding GRN values using the GRN Adjustment program.

Your integration settings for the Inventory module determine whether transactions processed in the Purchase Orders module are integrated to the General Ledger and if so, whether the integration is to be in real-time or in batch mode, and whether the transactions are to be posted in detail or in summary (see General Ledger Integration in this document).

The following table illustrates the default General Ledger entries that will be generated for Purchase order receipts, based on your selection at the GRN suspense system required option (Purchase Orders Setup – GRN tab):

Transaction	GRN System required	Debit account	Credit account
PO receipt for stocked item	Selected	Inventory warehouse control account	GRN suspense account defined against the warehouse or GRN suspense account defined in the Inventory tab of the GL Integration Setupprogram
PO receipt for stocked item	Not selected	Inventory warehouse control account	Ledger code for receipts
PO receipt for non-stocked item	Selected	Ledger code entered on purchase order line or Non-stocked control account	GRN suspense account defined in theInventory tab of the GL Integration Setupprogram
PO receipt for non-stocked item	Not selected	Ledger code entered on purchase order line or Non-stocked control account	Ledger code for receipts

Inventory
Stock master information is retrieved from the Inventory module when purchase orders are processed for stocked items.

Purchase Orders integrates with Inventory and the GRN System, if selected, when items are received into stock against a purchase order placed with a local or foreign supplier.

The financial period in which the stock is received is determined by the Inventory period selected at the time of posting the receipt in the Purchase Order Receipts program.

Quotations
Purchase Orders integrates with Quotations when you confirm a quotation, at which time you have the option to create a requisition or a purchase order for bought out or non-stocked items.

Requirements Planning
Purchase Orders integrates with Requirements Planning if you have selected to include purchase orders in the requirements calculation (SYSPRO Ribbon bar > Setup > Manufacturing > Requirements Planning > Planning 1). When you run the Requirements Calculation program, various action reports are available which may suggest that you:
• create a requisition or purchase order to cover a shortage of bought out items
• cancel specified purchase orders if you are likely to end up in an overstocked situation
• change the required date of a purchase order if the items are not required at the delivery date specified.

Sales Orders
Purchase orders and requisitions can be raised directly from sales orders and back orders. The system can be configured so that when the linked purchase order is receipted, it updates the sales order quantity-to-ship.

Work in Progress
Purchase Orders integrates with Work in Progress when the receipt of items against a purchase order line linked to a specific job is processed. This allows the item to be immediately issued to the job instead of having to be receipted into stock and then subsequently issued to the job.