5 Manage Purchase Orders

This chapter contains the following:

Create Purchase Order

Approve Purchase Order

Dispatch Purchase Order

Amend Purchase Order

Cancel Purchase Order Change Order

Update Purchase Order Change Order Details

Price Purchase Orders Retroactively

Manage Purchase Order Lifecycle

Create Purchase Order

What's the difference between a purchase order, a purchase agreement, and a contract agreement?

Oracle Fusion Purchasing provides the following purchase order types: purchase order, blanket purchase agreement, and contract purchase agreement.

Note that your organization can change the names of these documents to suit your business needs, but in their basic form the following describes their function:

Defaults: How They Work in Purchasing Document Headers

To minimize document creation time and reduce errors, a comprehensive defaulting mechanism is used to provide most required purchasing document header information.

Purchasing Document Header Defaulting Rules

The header or general information portion of a purchasing document contains the details that apply to the entire order.


Header Information

Purchase Order

Blanket Purchase Agreement

Contract Agreement

Automatically Generate Orders

Procurement Business Function Configuration of the Procurement BU

Automatically Submit for Approval

Procurement Business Function Configuration of the Procurement BU

Bill-to Location

  1. Supplier Site Assignment record of the supplier site in the Sold-to BU

  2. Common Payables and Procurement Configuration setting for the Sold-to BU

note to self: conref source #2

Buyer

Current logged in user who launches the create document window

Current logged in user who launches the create document window

Current logged in user who launches the create document window

Carrier

  1. Supplier Site

  2. Procurement Business Function Configuration of the Procurement BU

Same as purchase order

Same as purchase order

Communication Method

  1. Supplier Site

  2. 'None'

Same as purchase order

Same as purchase order

Confirming order

Unchecked

Unchecked

Unchecked

Conversion Date

Current system date

Conversion Rate Type

  1. If currency is fixed rate as defined in GL then set to EMU Fixed

  2. Common Payables and Procurement Configuration setting for the Sold-to BU

Currency

  1. Invoice Currency of the Supplier Site

  2. Primary ledger currency (functional currency) of the Sold-to BU

  1. Invoice Currency of the Supplier Site

  2. Procurement Business Function Configuration of the Procurement BU

Same as blanket purchase agreement

Default Ship-to Location

(If only Services, the attribute name is Default Work Location)

  1. Supplier Site Assignment record in the Requisitioning BU

  2. Requisitioning Business Function Configuration of the Requisitioning BU

E-Mail

(If Communication Method is E-mail)

  1. Supplier Contact

  2. Supplier Site

Same as purchase order

Same as purchase order

FOB

  1. Supplier Site

  2. Procurement Business Function Configuration of the Procurement BU

Same as purchase order

Same as purchase order

Fax

(If Communication Method is Fax)

  1. Supplier Contact

  2. Supplier Site

Same as purchase order

Same as purchase order

Freight Terms

  1. Supplier Site

  2. Procurement Business Function Configuration of the Procurement BU

Same as purchase order

Same as purchase order

Group Requisitions

Procurement Business Function Configuration of the Procurement BU

Group Requisition Lines

Procurement Business Function Configuration of the Procurement BU

Pay on Receipt

  1. Supplier Site

  2. Unchecked

Same as purchase order

Same as purchase order

Payment Terms

  1. Supplier Site

  2. Procurement Business Function Configuration of the Procurement BU

Same as purchase order

Same as purchase order

Purchase Order Style

Style Display Name for the Purchase Order document type as specified in the Style "Standard Style"

Style Display Name for the Blanket Purchase Agreement document type as specified in the Style "Standard Style"

Style Display Name for the Contract Purchase Agreement document type as specified in the Style "Standard Style"

Procurement BU

  1. Assigned Procurement BU of the worker, if there's one and only one active assignment.

  2. Profile option "Default Procurement Business Unit" If there are more than one active assignment for the worker

Same as purchase order

Same as purchase order

Retroactive Pricing Terms

Procurement Business Function Configuration of the Procurement BU

Required Acknowledgment

"None"

"None"

"None"

Requisitioning BU

  1. Client of the Procurement BU if there's only active client.

  2. Buyer's Procurement BU Assignment details, if there are multiple clients of the Procurement BU

Same as purchase order

Same as purchase order

Supplier Site

Supplier, if there's only one active purchasing site for the Procurement BU with an active site assignment for the Requisitioning BU

Supplier, if there's only one active purchasing site for the Procurement BU

Supplier, if there's only one active purchasing site for the Procurement BU

Supplier Contact

Supplier Site, if there's only one active contact for the site

Same as purchase order

Same as purchase order

Taxation Country

Country of the Legal Entity of the Sold-to BU

Use Need-by Date

Procurement Business Function Configuration of the Procurement BU

Use Ship-to Organization and Location

Procurement Business Function Configuration of the Procurement BU

Defaults: How They Work in Purchasing Document Lines

To minimize document creation time and reduce errors a comprehensive defaulting mechanism is used to provide most required purchasing document line information.

Purchasing Document Line Defaulting Rules

The line portion of a document contains the details that apply to the lines.


Line Information

Purchase Order

Blanket Purchase Agreement

Allow Price Override

Unchecked for goods lines and checked for services lines

Category

  1. Item as defined in the Ship-to Organization

  2. Line Type

Same as purchase order

Deliver-to Location

  1. Requester's location if its ship-to location matches the ship-to location of the line

  2. Ship-to location of the line

Description

Item as defined in the Ship-to Organization

Destination Type

  1. "Inventory" if item is stockable in Ship-to Organization

  2. "Expense"

Hazard Class

  1. Source Agreement Line

  2. UN Number

  3. Item as defined in the Ship-to Organization

  1. UN Number

  2. Item as defined in the Inventory Organization on Procurement Business Function Configuration of the Procurement BU

Invoice Close Tolerance Percent

  1. 100 if procurement card on the header

  2. Item as defined in the Ship-to Organization

  3. Configure Procurement Business Function

  4. Set it to "0"

Invoice Match Option

  1. Item as defined in the Ship-to Organization

  2. Line Type

  3. Supplier Site

  4. "Order"

Location

  1. Header

  2. BU assignment record of the source agreement corresponding to the Requisitioning BU

  3. Supplier Site Assignment record of the supplier site in the Requisitioning BU

  4. Requisitioning Business Function Configuration of the Requisitioning BU

Match Approval Level

  1. Item as defined in the Ship-to Organization

  2. Line Type

  3. Supplier Site

  4. Procurement Business Function Configuration of the Procurement BU

  5. "2-Way"

Note that if the default value is "4-Way" and the purchase basis is services then set to "3-Way."

Negotiated

  1. Source Agreement

  2. Unchecked

Checked

Organization

  1. Inventory Organization associated with the line Ship-to Location

  2. Inventory Organization associated with the header Ship-to Location

  3. Deliver-to Organization from the Requisitioning Business Function Configuration of the Requisitioning BU

Price

  1. Source agreement

  2. Item as defined in the Inventory Organization on Procurement Business Function Configuration of the Procurement BU

Item as defined in the Inventory Organization on Procurement Business Function Configuration of the Procurement BU

Price Break Type

Procurement Business Function Configuration of the Procurement BU

Secondary Quantity

Based on the conversion of the primary UOM and secondary UOM if the Defaulting definition of the UOM for the item is "Fixed" or "Default"

Supplier Item

Source agreement

Type

  1. Procurement Business Function Configuration of the Procurement BU

  2. Document Style

  3. "Goods."

Same as purchase order

UN Number

  1. Source agreement line

  2. Item as defined in the Ship-to Organization

Item as defined in the Inventory Organization on Procurement Business Function Configuration of the Procurement BU

UOM

  1. Item as defined in the Ship-to Organization

  2. Line Type

  1. Item as defined in the Inventory Organization on Procurement Business Function Configuration of the Procurement BU

  2. Line Type

Defaults: How They Work in Purchase Order Schedules

To minimize document creation time and reduce errors a comprehensive defaulting mechanism is used to provide most required purchasing document schedule information.

Purchase Order Schedule Defaulting Rules

The shipment portion of an order contains the details that apply to the schedules.


Schedule Information

Purchase Order

Accrue on Receipt

If Destination Type is "Inventory" then checked

If Destination Type is "Expense" then:

  1. Checked if receipt is required ("3-Way" or "4-Way" Match) and the Accrue Expense Items of Common Payables and Procurement Configuration is set to "At Receipt"

  2. Unchecked if receipt is NOT required

Allow Substitute Receipts

  1. Item as defined in the Ship-to Organization

  2. Supplier Site

  3. Receiving Options of the Ship-to Organization

  4. Unchecked

Country of Origin

  1. Item as defined in the Ship-to Organization

  2. Supplier Site

Destination Type

  1. Line

  2. If item in the ship-to organization is stockable, then default to 'Inventory'

  3. "Expense"

Deliver-to Location

  1. Requester's location, if requester is specified and if ship-to location matches that of the line.

  2. Ship-to Location of the schedule

Early Receipt Tolerance in Days

  1. Item as defined in the Ship-to Organization

  2. Supplier Site

  3. Receiving Options of the Ship-to Organization

  4. "0"

Invoice Close Tolerance Percent

  1. 100 if procurement card on header

  2. Item as defined in the Ship-to Organization

  3. Procurement Business Function Configuration of the Procurement BU

  4. "0"

Invoice Match Option

  1. Item as defined in the Ship-to Organization

  2. Line Type

  3. Supplier Site

  4. "Order"

Late Receipt Tolerance in Days

  1. Item as defined in the Ship-to Organization

  2. Supplier Site

  3. Receiving Options of the Ship-to Organization

  4. "0"

Location

  1. Ship-to Location from line

  2. BU assignment record of the source agreement corresponding to the Requisitioning BU

  3. Supplier Site assignment of the Requisitioning BU

  4. Requisitioning Business Function Configuration of the Requisitioning BU

Match Approval Level

  1. Item as defined in the Ship-to Organization

  2. Line Type

  3. Supplier Site

  4. Procurement Business Function Configuration of the Procurement BU

  5. "2-Way"

Note: If the default value is "4-Way" and the line's purchase basis is services then set to "3-Way"

Organization

  1. Inventory organization associated with the Location

  2. Inventory organization associated with the Location of the line

  3. Deliver-to organization from the Requisitioning Business Function Configuration of the requisitioning BU

Over-receipt Action

  1. Item as defined in the Ship-to Organization

  2. Supplier Site

  3. Receiving Options of the Ship-to Organization

  4. "None"

Over-receipt Tolerance Percent

  1. Item as defined in the Ship-to Organization

  2. Supplier Site

  3. Receiving Options of the Ship-to Organization

  4. "0"

Receipt Close Tolerance Percent

  1. Item as defined in the Ship-to Organization

  2. Line Type

  3. Procurement Business Function Configuration of the Procurement BU

  4. "0"

Receipt Date Exception Action

  1. Item as defined in the Ship-to Organization

  2. Supplier Site

  3. Receiving Options of the Ship-to Organization

  4. "None"

Receipt Routing

If line type has purchase basis of goods:

  1. Item as defined in the Ship-to Organization

  2. Supplier Site

  3. Receiving Options of the Ship-to Organization

If the line type has purchase basis of services: "Direct Delivery"

Secondary Quantity

From primary quantity, based on the conversion of the primary UOM and secondary UOM if the defaulting definition of the UOM for the item is "Fixed" or "Default"

Ship-to Exception Action

  1. Item as defined in the Ship-to Organization

  2. Supplier Site

  3. Receiving Options of the Ship-to Organization

  4. "None"

Defaults: How They Work in Purchase Order Distributions

To minimize document creation time and reduce errors a comprehensive defaulting mechanism is used to provide most required purchasing order line distribution information.

Purchase Order Distribution Defaulting Rules

The distribution portion of an order contains the details that apply to the distributions:


Distribution Information

Purchase Order

Conversion Date

Header

Conversion Rate

Header

Deliver-to Location

  1. Schedule

  2. Requester's location, if the ship-to location matches that of the schedule

  3. Ship-to Location of the associated schedule

Purchasing Document Validation Checks: How They Work

The application validates the document against a set of rules to insure that this is a valid procurement document. If it is not, an error or warning is provided.

Document Validation Checks

You can validate your document or change order using the Validate action. If there is an error or warning, the application displays a dialog listing all errors and warnings for you to review. Submitting a document or a change order for approval executes the same validation checks. Some of these validations are performed prior to a change order creating a new version of the document. This ensures that the changes are still relevant in the context of the current state of the document life cycle. For example, any reduction in ordered quantity takes into account any recent receipts and does not reduce the quantity beyond what has already been received.

Listed below are some of these validation checks:


Validation

Level

Purchase Order

Blanket Purchase Agreement

Contract Purchase Agreement

The agreement must be assigned for usage to at least one requisitioning BU.

Header

X

X

The amount limit must be greater than or equal to the minimum release amount.

Header

X

X

Amount limit of an agreement cannot be reduced below the amount that has already been released.

Header

X

X

The document must have a supplier site

Header

X

X

X

The document must have a supplier.

Header

X

X

X

The document must have at least one line.

Header

X

X

Total amount released cannot exceed the amount limit on the agreement.

Header

X

The amount released against an agreement on the order must be greater than or equal to the minimum release amount specified on the agreement.

Header

X

The amount released against an agreement line on the order must be greater than or equal to the minimum release amount on the agreement line.

Header

X

If supplier hold enforcement is in place, supplier site on the document must not be on purchasing hold.

Header

X

X

X

If retroactive pricing is enabled for open orders only and any accounting has happened on the line then price cannot be changed.

Line

X

The line ordered amount must be equal to the sum of the ordered amount of all schedules of the line.

Line

X

The line price change exceeds the price update tolerance specified on the blanket purchase agreement.

Line

X

The price limit must be greater than or equal to the price if price override is allowed.

Line

X

The purchase order line price must be less than or equal to the source agreement price limit.

Line

X

The purchase order line quantity must equal the sum of its schedule quantities.

Line

X

The ordered amount cannot exceed the approved amount of the requisition line by more than the price change tolerance amount specified for the requisitioning BU.

Schedule

X

The ordered amount must be greater than or equal to the received amount for service lines.

Schedule

X

The ordered quantity must be greater than or equal to the received quantity for goods lines.

Schedule

X

The price on the order cannot exceed the price on the requisition line by more than the price change tolerance percentage specified for the requisitioning business unit.

Schedule

X

The purchase order schedule quantity must equal the sum of its distribution quantities.

Schedule

X

The schedule order amount must be equal to the sum of its distribution ordered amounts.

Schedule

X

The secondary quantity is required for a dual UOM controlled item.

Schedule

X

The supplier must be an approved supplier for items requiring an approved supplier.

Schedule

X

X

The supplier must not be a debarred supplier.

Schedule

X

X

X

The ordered amount must be greater than or equal to the billed amount.

Distribution

X

The ordered amount must be greater than or equal to the delivered amount.

Distribution

X

The ordered quantity must be greater than or equal to the billed quantity.

Distribution

X

The ordered quantity must be greater than or equal to the delivered quantity.

Distribution

X

Purchase Order Pricing: Explained

If your order line is sourced to a blanket purchase agreement, the order line price is determined based on either a matching price break from the agreement line or in the absence of any matching price breaks, the price from the agreement line itself.

Purchase Order Pricing

In order to identify a matching price break, the application performs the following checks:

  1. For noncumulative price breaks, if the price break quantity is not less than the ordered quantity from the current order.

  2. For cumulative price breaks, if the price break quantity is not less than the ordered quantity from the current order plus any quantity that has already been ordered.

  3. If the pricing date is within the effective period of the price break.

    The pricing date by default is the need-by date from the order line or the current calendar date if the order line does not have a need-by date specified. Your administrator may alter the default pricing date determined by the application through customization.

  4. If the price break ship-to organization or the location when specified matches those from the current order line.

If more than one price break satisfies the conditions listed above, then the application picks the lowest price from these price breaks. Your administrator may have custom logic to alter the default price determined by the application through customization.

Cancel Purchase Order

What happens if a purchasing document is canceled?

As a procurement agent, you can terminate an existing contract to buy from a supplier by canceling document headers, lines, or schedules. Canceled documents can be communicated to the supplier. The communicated documents are marked with a cancellation notice to highlight this action to the supplier.

When you cancel a purchase order entity, you are still able to receive or pay for canceled items and services as well as pay for all previously received orders up to the over-receipt tolerance based on the new ordered after cancellation.

As a supplier, you can also terminate an existing contract to supply items by canceling document headers, lines, or schedules. Such cancellation request requires review and approval by the buying organization.

You cannot modify a canceled entity or its components. For example, if you cancel a line you cannot modify the associated schedules and distributions.

Use the Actions menu to cancel a document.

Create Purchase Order from Requisition

Document Creation from Requisitions: Explained

The Process Requisitions page allows you to access and aggregate existing requisition demand to create new procurement documents.

Using entered or saved search parameters, you can quickly select all requisition lines that meet the unique set of criteria of your procurement needs. Once you have identified the appropriate requisition lines it is a simple task to add them to the document builder and create your order or negotiation.

Create Purchase Order Online

Purchase Order Creation: Points to Consider

A purchase order is a commercial document that is used to request a seller to supply a product or service in return for payment. In Oracle Fusion Purchasing a purchase order can be created through an automated process or entered manually. Consider the following overall key attributes when creating a purchase order.

Procurement BU

Procurement business units are responsible for procurement business function related activities including supplier management, contract negotiation and administration, order issuance and administration. As a buyer, you can only create purchase orders for those business units who are identified as Clients of your Procurement BU.

Depending on business requirements, a procurement business unit can either perform these functions in response to its own requirements for purchased goods and services or can be set up as a shared procurement service center that can process requisitions from multiple "client" business units.

Your procurement business unit affiliation also gives you access to process those requisitions originating from these clients and identified for processing in your procurement BU

Sold-to BU

The requisitioning BU, the business unit where the items are needed, is also typically the business unit that will bear financial responsibility for the purchase. However in certain scenarios, especially those dealing with global trade or supply chain, businesses find it beneficial to channel purchases through international subsidiaries instead of directly dealing with suppliers. The reasons range from country specific legal requirements to favorable tax treatment. The sold-to BU on the purchase order represents the business unit with the financial responsibility of the purchase and in order to support the above scenarios can be different from the requisitioning BU of the order. Purchase order documents are sequenced uniquely within a sold-to business unit.

Oracle Fusion Purchasing automatically derives the sold-to BU during order creation based on the requisitioning BU and the supplier site from the corresponding supplier site assignment entry.

Supplier, Supplier Site, and Supplier Contact

Enter or select the name of the Supplier for this purchase order. To submit a purchase order for approval, you must provide a supplier.

Note

You cannot change the supplier after the purchase order is open. The purchase order becomes a legal document when you and the supplier approve it (acknowledgment optionally may be required). To change the supplier after you approve a purchase order, you must cancel the existing purchase order and create a new one for the other supplier.

Enter or select the Supplier Site for this purchase order. If the supplier you choose has only one site, it is defaulted into this field. Before you can submit a purchase order for approval, you must provide a supplier site.

You can optionally enter the name of the contact at the supplier site. If the supplier you choose has only one contact name, it is defaulted into this field.

Communication Method

You can communicate your purchase orders and agreements along with any amendments, attachments, contract terms, and contractual deliverables to suppliers using print, fax, or e-mail. Purchase orders can also be communicated using B2B messaging if the supplier site is configured to receive the document electronically through the Oracle Fusion B2B Gateway.

Communication Method is defaulted on the document based on the specified supplier site's preferred communication method.

If a communication method other than None is specified on the document or the supplier site is setup for communication by means of B2B messaging, the application automatically initiates the communication process upon approval of the document.

Alternatively, you can communicate documents to your supplier in batch by means of print, fax or e-mail by scheduling the Communicate Purchasing Documents process.

If the automatic communication fails for any reason, or if you simply need to resend your document, you can do so by choosing the Communicate action. This action also allows you to use a communication method that is different from the supplier's preferred communication method to facilitate communication when the preferred channel is out of service for some reason.

Bill-to Location

Enter the Bill-to Location for the purchase order. If you entered a supplier and supplier site, the location defaults reflect the location you assigned to the supplier or supplier site. You can accept these values or change them to another location.

Currency

Enter or select the Currency for the purchase order. You can change currency information until the purchase order is approved. Note that changing the purchase order supplier to one that uses a different currency overrides any information you have entered.

Purchase Order Terms: Points to Consider

Use the Terms region to enter terms and shipping information for a purchase order. Key attributes to consider here are:

Acknowledgment

Select an acknowledgment method if you require the supplier to accept your document before it becomes legally binding and can be executed. If you select a method, you can enter the Acknowledgment Within Days, which indicates when you require the supplier to return an acknowledgment for your order.

Choices for Acknowledgment method are:

Pay on Receipt

Pay on receipt means that the application will automatically generate an invoice for this purchase order when it is received. Pay on receipt automates the settlement process eliminating the need for suppliers to send a separate invoice, especially paper invoices. This reduces the load on your Accounts Payable departmentt.

Confirming Order

Select Confirming order to indicate that the purchase order is a confirming order. A confirming order is an order that you are submitting formally to confirm a verbal order already placed with the supplier. For confirming orders, the following is printed on the purchase order header: "This is a confirming order. Do not duplicate."

Purchase Order Lines: Points to Consider

Use the Lines region to enter the details of the goods or services being ordered on a purchase order. Key attributes to consider here are:

Line Type

The line type feature allows you to differentiate purchases for various commodities such as goods and services. Goods are ordered by quantity and price, whereas services are ordered by price.

Implications of your selection of line type:

Item

Enter the Item you want to purchase. Typically the item is an identifier of goods already defined in your procurement catalog. If you enter a defined item, the application displays the purchasing category, item description, unit of measure, and unit price associated with the item. To create a purchase order line for a one-time item, simply skip the item number field and enter a purchasing category and an item description.

Category

When entering a line, enter or select the purchasing category of the item you want to purchase. If you choose an item, the application displays the purchasing category for the item. You cannot change the purchasing category if you choose an item.

Shipping and Delivery

The shipping and delivery location, as well as organization should default from the purchase order header information you provided. Enter or select the Need-by Date when the requester needs the item. If the supplier provided a promised delivery date of the items, enter that.

Source Document

When you are creating an order for a predefined item, the application automatically tries to detect an available source agreement that can be leveraged for this purchase.

Based on several transaction attributes like the supplier, supplier site, item, ship-to organization and location, the application looks for the appropriate approved supplier list entry. From the approved supplier list entry it deduces the source blanket or contract agreement. If there is no approved supplier list entry, then it tries to directly look for the appropriate blanket agreement based on the transaction attributes. If there is no blanket, then it tries to find a contract agreement.

Purchase Order Line Types: Examples

These examples demonstrate why the line type feature is an important part of the purchase order. It enables you to clearly differentiate orders for goods from those for services.

Quantity-Based Purchasing

Use quantity-based line types when you want to specify the quantity, unit of measure, and unit price for the items you are ordering. Oracle Fusion Purchasing provides Goods as an initial quantity-based line type. You can modify this line type or create new quantity-based line types to satisfy your business needs.


Type

Item

Quantity

UOM

Price

Goods

AS54888

8

Each

$1,107

Fixed Price Services Purchasing

You can use fixed price-based line types when you want to order general business services by a fixed amount. Oracle Fusion Purchasing provides Fixed Price Services as an initial fixed price-based line type. You create an order for fixed price service by selecting a fixed price services line type, category, item description, and total amount of the service. You can receive and match fixed price services by amount.


Type

Description

Category

Price

Fixed Price Services

Office Cleaning

Office Miscellaneous

$1,350

Purchase Order Schedules: Points to Consider

A purchase order schedule specifies the quantity, ship-to location, date you want your supplier to deliver the items on a purchase order line, and country of origin for the items. Use the Schedules region or page to enter multiple shipment schedules for standard purchase order lines and to edit schedules that were automatically created for you. When you save your work, purchase order distributions are created if sufficient valid default information is available and if there are no existing distributions. Key areas to consider for schedules are:

Shipping and Delivery

Each purchase order line has one or more due dates and external delivery locations carried on a schedule. Create a schedule for each unique delivery address and due date. The critical information for a single schedule defaults from the line. For additional schedules the key delivery attributes are ship-to location, quantity, and required date.

Billing

Like the delivery information, if a further breakdown of the billing information is required additional schedules may have to be created for a purchase order line. For additional schedules the key billing attributes are approval matching and invoice matching,

Purchase Order Schedules: Examples

A purchase order schedule specifies the shipment details about the item on a purchase order line. The following scenarios illustrate both the required single schedule per line and when you might have multiples. These examples only highlight common fields.

Scenario

A purchase order line requires at least one schedule per line.


Schedule

Location

Quantity

Need-by Date

1

V1- New York City

9

8/15/2012

Scenario

Here is an example of schedules for a line that required multiple delivery dates. This was achieved by means of splitting the schedule and modifying the quantity and need-by date on the schedules.


Schedule

Location

Quantity

Need-by Date

1

V1- New York City

3

8/15/2012

2

V1- New York City

3

9/15/2012

3

V1- New York City

3

10/15/2012

Purchase Order Distributions: Points to Consider

A purchase order distribution specifies how the purchase order schedule is to be charged to the organization. The purchase order Distributions tab or page is used to enter distribution information for purchase order schedules or to view distributions that were automatically created for you. You can enter multiple distributions per schedule.

Billing

Enter the purchasing accounts. When you save your changes in this window, the application automatically creates the following accounts for each distribution:

Purchase Order Distributions: Examples

A purchase order distribution specifies the internal billing details about a purchase order schedule line. The following scenarios illustrate both the required single distribution per schedule and when you might have multiples. These examples only highlight common fields.

Scenario

A purchase order schedule requires at least one distribution per line.


Distribution

Destination Type

Deliver-to Location

Quantity

PO Charge Account

1

Expense

New York HQ

4

01-510-7530-0000-000

Scenario

Here is an example of distributions for a schedule that required multiple delivery locations and corresponding charge accounts. This was achieved by means of splitting the distribution and modifying the quantity and deliver-to location on the distribution lines


Distribution

Destination Type

Deliver-to Location

Quantity

PO Charge Account

1

Expense

New York HQ

2

01-510-7530-0000-000

2

Expense

New York Finance

2

01-550-7530-0000-000

FAQs for Create Purchase Order Online

Where do the purchase order defaults come from?

Some document fields are filled in automatically when you first create a purchase order. A comprehensive defaulting mechanism provides most required purchase order information and minimizes document creation time. In most cases, but not all, you can change the defaulted information

What's a document layout?

The document layout determines the appearance of the document when viewed or communicated to the supplier. For purchasing documents other than requisitions, you can select the appropriate layout for a document type. These layout templates determine what information is displayed along with providing the headers, footers, text style, and pagination of the printed document. You would also select a contract terms layout if procurement contracts is being deployed.

Standard layouts are provided with the application but you can create custom layouts. These are usually defined during application implementation.

How can I add line items from existing blanket purchase agreements to my order?

You can add lines to an order from existing blanket purchase agreements using the Add from Catalog action.

Import Purchase Orders

Automated Order Buying For Items From The Open Interface : How It Works

For the application to automatically create orders for items imported through the open interface some prerequisites are required.

Settings for Automated Ordering of Items Imported Through the Open Interface

The setup to enable automated order buying for items imported through the open interface depends on the procurement strategy of the organization. This falls into two scenarios:

  1. Item has a primary source for all inventory organizations within a requisitioning BU.

    The item has a primary supplier across all inventory organizations within a requisitioning BU being serviced by the procurement BU. For this scenario it is sufficient to have an agreement in place with the requisitioning BU added to the list of business units in the Business Unit Access table of the agreement and enable the order creation controls on this agreement to automatically process requisitions sourced to this agreement into purchase orders.

    When requisitions are created for this item from any inventory organization of these requisitioning BUs, the system will find the agreement and determine the supplier, terms and conditions, and pricing information needed to create the purchase order.

  2. Item has a primary source specific to an inventory organization.

    This scenario addresses a more complex procurement strategy wherein the item has a local supplier when purchased from an inventory organization. For this scenario, the following setups need to be performed:

    • Create an agreement with the supplier and enable the order creation controls on the agreement.

    • Create a local approved supplier list (ASL) entry for this item when it is purchased from the inventory organization. The Generate Approved Supplier List Entries process is available to quickly create ASL entries for the items on the agreement.

    When requisitions are created for this item from this inventory organization, the system will find the local ASL entry for this item-supplier combination, and then find the agreement listed on the ASL entry, and determine the supplier, terms and conditions, and pricing information need to create the purchase order.

For both the above scenarios, in case multiple agreements are found, the system prioritizes agreements in the following order:

From this list it picks the agreement with the most recent agreement date.

Automated Order Buying For Catalog Items : How It Works

For the application to automatically create orders for catalog items some prerequisites are required.

Settings for Automated Order Buying

To enable automated order buying for catalog items which are to be associated with agreements (items on agreements, punch-out catalog items, items on smart forms), the following setup is required:

The procurement agent can configure the degree of intervention in the automated process using the agreement order creation controls:

The agreement also provides grouping controls for requisition lines which are sourced to this agreement:

Approve Purchase Order

Purchasing Document Approval: Explained

Document approval electronically routes the purchasing document to all identified approvers and records their approval actions.

Oracle Fusion Purchasing leverages the Oracle Approval Management Service (AMX) for purchasing document approvals. Approval Management Service is a robust engine that enables administrators to organize and author approval routing rules based on numerous seeded document attributes such as ordered amount, price, category, and contract terms exist. Based on your unique business requirements, administrators can choose to send the approval request to approvers in parallel or in a sequence. Approvals can be sought using supervisory chain, position or job level hierarchy, or using a list of approvers.

Approval routing rules examples:


Condition

Action

Purchase order amount exceeds a certain threshold

Route to procurement agent's manager

Purchase order amount is greater than backing requisition amount

Route to requester's manager

Line price change percent on a blanket agreement exceeds the Price Update Tolerance Percent

Route for category manager approval

Non-standard contract terms

Route for legal approval

Line category name is "Travel"

Route for travel approval

FAQs for Approve Purchase Order

How can I insert additional approvers and viewers?

As a procurement agent or a requester, you can view the application generated list of approvers using the Manage Approvals page. You can add approvers and viewers on this page based on approval configuration.

How can I view the approval actions performed on a document?

Select your purchasing document in the application and use the View Document History action to view all approval actions performed on the document.

Evaluate Purchase Order Approval Status

Purchase Order Approval: How It Is Processed

Document approval electronically routes the purchase order to all identified approvers and records their approval actions. It determines the routing using a rules engine which is configured to accommodate your organization's unique business requirements. Approvers can then review the document details, add comments, and add attachments before approving, rejecting, or routing the document to additional approvers.

Simplified Document Approval Flow

The document is reviewed and is then either approved, reassigned, or rejected.

Settings That Affect Purchase Order Approval

Settings for approval are performed in Set Up Procurement Detailed Business Process using the Oracle Fusion Functional Setup Manager.

Key setup tasks:

How Purchase Order Approval Is Processed

Using the rules engine, the original order or change order is routed to appropriate approvers for their approval.

Routing rules can be based on multiple document attributes including:

The rules engine enables you freedom of choice over how approval takes place:

Approval routing rules examples:


Condition

Action

Purchase order amount exceeds a certain threshold

Route to procurement agent's manager

Purchase order amount is greater than backing requisition amount

Route to requester's manager

Non-standard contract terms

Route for legal approval

Line's category name is "Travel"

Route for travel approval

How can I find the approver with whom the document or an active change order is pending for approval?

Select your purchasing document in the application and use the Status link to open the Action Details page. This page displays all approvers who performed an action, current approvers, and future approvers.

Dispatch Purchase Order

Acknowledge Purchase Order

How can I record a supplier acknowledgment?

In certain circumstances, such as for a document with legal terms and conditions and contractual deliverables, formal acknowledgment may be required before the document becomes legally binding and can be executed against.

As a supplier using Oracle Fusion Supplier Portal, you can view purchasing documents and change orders awaiting acknowledgment and record your response over the portal. New acknowledgment requests also show up as worklist items on the portal and as e-mail notification.

As a buyer, you can monitor purchasing documents and change orders awaiting acknowledgment on the Purchasing Overview page. Acknowledgment requests past their due date also show up as watchlist items and appear in the Orders Attention Required tab of the Overview page. To record an acknowledgment on your supplier's behalf, use the Acknowledge action on the document.

Amend Purchase Order

Change Order Life Cycle: Explained

Change orders enable the procurement agent, requester, supplier, or catalog administrator to propose changes to an active purchasing document by indicating their desired changes to the current version of the document including cancellation of the document.

Graphical flow of create, approve, dispatch, and implement a change order.

Create

As a procurement agent, a requester, a catalog administrator or a supplier you can initiate a change on a purchasing document by accessing the document from your own work area. You can search for the document, create a change order and start proposing changes. The scope of change that you can propose is determined by the work area that you are using to access the document. For example, if you are accessing the document as a buyer from the purchasing work area then you can propose changes to contract terms and conditions or, if you are accessing the document as a supplier from the supplier work area then you cannot propose changes on purchase order distributions, or if you are accessing an agreement as a catalog administrator from catalog administrator work area then you are allowed to upload lines on an agreement. You can review the details of the changes proposed by selecting the Review Changes action. The Review Changes page shows each and every attribute being changed; it's original and changed values. When you submit a change order for approval, the application validates the change order for accuracy, completeness and policy deviations.

Approve

The application uses the same approval workflow to route a change order for approval as a purchasing document. Attributes relevant for a change order are available in the approval management service, based on which routing rules can be authored, such as PO Ordered Amount Changed, Price Change Percent, or Non Standard Clause Modified. As an internal user, you can view the approvers that the application included on your change order, based on the routing rules, using the Manage Approval page. The page allows you to insert additional approvers and viewers, if required.

As an approver you will receive an approval request highlighting critical information needed to make an approval decision such as party initiating the change, amount changed, contract deviations etc. The task detail provides easy navigation to view the purchasing document in its entirety. If needed, you may request more information.

Dispatch

An external change order is communicated to the supplier using supplier preferred means such as B2B, Print, Fax, or E-Mail. Oracle Fusion Supplier Portal users may choose to view changes online. You can manually communicate a change order to the supplier using the Communicate action, or changes can be communicated in batch using Communicate Purchasing Documents program.

As a procurement agent, you may optionally require supplier acknowledgment on an external change order. Using the Acknowledgment page, an Oracle Fusion Supplier Portal user can perform acknowledgment online or a procurement agent can record offline acknowledgments in the application.

Implement

During the implementation phase of a change order the application validates that the change order information is still valid and if it is, changes are propagated to the active purchasing document else the change order is canceled and the change order initiator is notified. The purchasing document is revised when an external change order is implemented. All change orders, external or internal, are archived and can be accessed using the Change History page. Suppliers can view all external change orders using the Revision History page. The application notifies relevant parties of successful implementation of a change order.

Cancel Purchase Order Change Order

What happens if the change order I submitted is no longer needed?

You can withdraw a change order that is pending approval or pending supplier acknowledgment using the Withdraw action, make further edits, and resubmit it for approval. You can also cancel the change order if the change is not required at all.

Update Purchase Order Change Order Details

How can I view the changes proposed on a change order?

You can view all changes proposed for a change order on the Review Changes page. This page shows all changed attributes, their original, and their new values. Changes made to contract terms are also shown. The page hides internal control attributes, as defined in the change order template, from suppliers.

Price Purchase Orders Retroactively

How can I apply my agreement pricing changes to existing open orders?

You can run the Launch Retroactive Price Update process to apply price changes from a blanket purchase agreement to purchase order lines created referencing the agreement line. Note that you can set up your agreement to launch this program automatically upon implementation of change orders with changes to pricing.

Manage Purchase Order Lifecycle

Purchase Order Life Cycle: Explained

Managing the purchase order life cycle enables all key stakeholders of the purchase order; the procurement agent, the requester, and the supplier to track and monitor the execution cycle of the order and initiate and manage changes to the order including cancellations.

Life Cycle Tasks

Key Life Cycle Tasks:

Life Cycle Features

Key Life Cycle Features:

Purchasing Document Control Actions : How They Work Together

The following matrices describe the effect of control statuses on various actions on purchasing documents.

Purchase Orders

Effect of purchase order control actions.


Control Details

Close

Close for Invoicing

Close for Receiving

Cancel

Finally Close

Freeze

Hold

Modify controlled entity?

Yes

Yes

Yes

No

No

No

Yes

Action causes revision change?

No

No

No

Yes

No

No

No

Communicate document?

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Receive against controlled entity?

Yes

Yes

Yes

Yes, up to overreceipt tolerance

No

Yes

No

Return to supplier against controlled entity?

Yes

Yes

Yes

Yes

No

Yes

Yes

Invoice against controlled entity?

Yes

Yes

Yes

Yes

No

Yes

No

Effect on supply or available to promise

Closed quantity no longer available as supply; supply is recreated when reopened

No effect

Closed quantity no longer available as supply; supply is recreated when reopened

Cancelled quantity no longer available as supply

Finally Closed quantity no longer available as supply

No effect

No effect

Associated Requisitions

No effect

No effect

No effect

Determined by Purchasing Options: Never, Always, Optional

No effect

No effect

No effect

Purchase Agreements

Effect of purchase agreement control actions.


Control Details

Cancel

Finally Close

Freeze

Hold

Modify controlled entity?

No

No

No

Yes

Action causes revision change?

Yes

No

No

No

Communicate document?

Yes

Yes

Yes

Yes

Can release against the document?

No

No

Yes

No

Track Purchase Order Lifecycle

How can I check the current order fulfillment status?

You can check order fulfillment status using the Order Life Cycle page which summarizes all downstream fulfillment and settlement activities including in transit shipments, receipts and invoices and highlights any remaining balances pending such activities. This page also provides links to further examine specific transaction details.

How can I find the history of an order or agreement?

You can view the Document History page using the document's Status link. The Document History page provides a comprehensive audit trail of all actions taken, changes proposed, and changes implemented on the document since its creation. This page also provides you with the means to look at and compare previous versions of the document.

Close Purchase Order

What happens if a purchase order is closed?

You can close and reopen purchase orders and their components using the Actions menu. You would close the order if you don't expect any further transactions and want it not to appear on any open document queries. You can reopen either through a manual action or a return of material. In rare occasions, an increase in ordered quantity or the addition of new ordered items results in a reopen.

The application has the ability to automatically set the status to closed for schedules, lines, and entire orders based on controls that are defined by your organization. Once all schedules for a given line are closed, the line is closed. When all lines for a given header are closed, the document is closed.

The closing controls include:

A schedule has a status of Closed for Receiving when it satisfies the two receipt close controls. This does not prevent further receipts but begins the steps necessary to automatically close the document. A schedule has a status of Closed for Invoicing when it satisfies the invoice close control. This status will not prevent you from matching an invoice to the purchase order or to the receipt but begins the steps needed to automatically close the document. Both of these statuses can apply to the header, line, and schedule levels.

Freeze Purchase Order

What happens if I freeze a purchasing document?

Freeze your purchase orders to prevent changes or additions while maintaining the ability to receive and match invoices against received schedules. Freezing a purchase order cancels any pending change order that might exist on the purchase order.

Use the Actions menu to freeze or unfreeze a document.

Hold Purchase Order

What happens if a purchasing document is put on hold?

Place documents on hold to prevent receiving and invoicing until you remove the hold.

Use the Actions menu to hold or remove a hold on a document.

Retire Purchase Order

What happens if a purchasing document status is finally closed?

You can prevent modifications to or actions against completed documents, lines, and schedules by final closing them. You should only final close documents or their components if you are absolutely certain that all desired activities have been completed as you cannot undo a Final Close action.

You cannot perform the following actions against final-closed entities: receive, transfer, inspect, deliver, correct receipt quantities, invoice, return to supplier, or return to receiving. You can approve documents that include final-closed entities, but you cannot approve documents that are final closed at the header level. You can print final-closed documents; this is an internal control action that has no bearing on your contractual relationship with the supplier.

A schedule is finally closed when an accounts payable clerk indicates a final match while matching an invoice.