Understanding Purchase Order Tracking
PO tracking enables you to add customer purchase orders to the system with their balances and expiration dates, link assignments with these customer POs, apply the amounts billed against the PO balances, and obtain online tracking information for the PO balances.
In the Assignment component, on the Assignments - Billing page, if the Use PO Tracking check box is not selected, users can enter a customer PO number—for POs that have not been previously added to the system and for which users do not need PO balances to be tracked. In such situations, the PO number is free-form and is passed to the billing plan in PeopleSoft Contracts; from there it is sent to PeopleSoft Billing where it can be used to print on the invoice.
Note: You can associate an assignment with a PO when you create the assignment.
Although you can capture customer PO information for career assignments, the PO balance tracking feature is only available for temporary assignments.
This section discusses:
PO tracking numbers.
PO statuses.
PO linking.
PO extensions.
PO inquiries.
PO processing.
PO encumbrances.
Your clients might provide you with POs authorizing specific amounts to be allocated for services rendered. Use PO tracking numbers to track these fixed-amount POs over a specified period.
You can create PO tracking numbers on the Purchase Order page, where you can capture basic information about a PO such as the start date, end date, and reference contact ID. Use the Purchase Order - Contract Lines page to link PO tracking numbers with assignments by using the contract lines with which they are associated.
There are two pages for PO tracking creation:
The Create Purchase Orders - Purchase Order page in Add mode, where you can enter new PO tracking numbers.
The Create Purchase Orders - Purchase Order page in Update/Display mode, where you can edit existing PO tracking numbers.
You encounter these statuses when setting up POs.
Term |
Definition |
|---|---|
New |
Default status when first creating a PO tracking number. All fields associated with a new PO tracking number are fully editable. |
Active |
The system updates the PO status to Active after the Billing to Projects/Contracts Interface process (BIPCC000) runs for the first time for that PO. While in Active status, some fields become unavailable for entry. Note: You must have at least one active extension. |
Exhausted |
Upon depletion of the PO balance, the system updates the PO status to Exhausted, and you cannot change it manually. All extensions must be exhausted to change the status of a PO to Exhausted. If you enter a new extension for an exhausted PO, the PO becomes active again. Note: For an extension to become exhausted, it must be depleted to zero. |
Expired |
If a PO is past its end date (which appears on the Purchase Order page), the status changes to Expired. This occurs even if the PO has a remaining balance. You can set the PO back to Active if you change the end date. |
You can link the PO to an assignment during creation of the PO tracking number or upon creation of the assignment. You can update this relationship from either location.
When linking the PO tracking number to a contract, your list of available contracts is limited to those with the same currency and customer ID as the PO tracking number.
When linking an assignment to an existing PO tracking number, your list of available PO tracking numbers is limited to those that have the same currency and customer ID as the assignment. If you choose a PO which is exhausted or expired, the system displays a warning message.
An open PO can be either:
A PO tracking number with at least one customer extension that has not yet been exhausted or expired.
A PO tracking number with an exhausted or expired customer extension but with an internal extension that has not been exhausted or expired.
PO Linking Rules
You can link:
A PO tracking number to multiple contract lines (assignments).
An assignment (contract line) to one PO tracking number (and its related extensions) only.
PO Linking Locations
You can associate a PO tracking number with an order:
On the Assignment page.
During the creation of the PO tracking number on the Create Purchase Orders - Contract Lines page.
PO Tracking Numbers: Unlinking and Relinking
You can:
Change the linked PO tracking number on an assignment detail at any time.
If you change an order's PO tracking number, this change is reflected in the Create Purchase Orders - Contract Lines page.
Unlink and relink orders to PO tracking numbers on the Create Purchase Orders page or the Assignments page.
Linking Terminology
Here is the relationship between terms:
A PeopleSoft Pay/Bill Management order creates one PeopleSoft Contracts contract and one PeopleSoft Project Costing project.
A PeopleSoft Pay/Bill Management assignment creates one PeopleSoft Contracts contract line and one PeopleSoft Project Costing activity.
An extension is an issuance of an additional amount by the client on an existing PO. Extensions must be in the same currency as the original PO. To create an extension in a different currency, add a new PO tracking number.
The extension number is an auto-numbered, system-generated number for each amount added to the PO tracking ID.
The system sets the extension status to Active once a transaction is applied. You cannot change an extension amount or customer PO reference number once a transaction has been applied to the extension.
Extension Types
PeopleSoft Pay/Bill Management allows two types of extensions:
Term |
Definition |
|---|---|
Customer |
The default for all extension types. With the exception of the first extension (extension # = 0) (extension number), you can override this type. The first extension for a PO tracking number must always be Customer. Once an extension type is set to Customer and saved, it cannot be reset to Internal. A customer extension represents a new PO from the customer. The new PO can be either a new customer PO number or an extension of the original. Identify this value in the Customer PO field. |
Internal |
Establish an internal extension to continue processing on an expired or exhausted extension. This extension can be used as a placeholder, allowing you to continue to bill until you receive the actual customer PO. |
You can view information regarding PO balance tracking and filter the information based on specified search criteria such as a bill to customer, date range, and so forth. You can also define tolerance levels that trigger warning buttons to appear for PO exhaustion and expiration.
Tolerance
There are two types of tolerances for POs:
Term |
Definition |
|---|---|
Tolerance Amount |
The system compares the remaining amount minus the committed amount with the tolerance percentage multiplied by the original PO amount. The results determine the tolerance warning. For example, suppose that you enter a tolerance percentage of 40 and you have an original PO amount of 100,000 USD; your tolerance amount is 40,000 USD. |
Tolerance Date |
The system compares the number entered for the allowed tolerance days with the PO's number of remaining days. The PO's number of remaining days is the difference between the current date and the end date from the PO Entry page. The results determine the tolerance warning. |
Note: The tolerance amount should be tax inclusive. Also, the committed amount should include the encumbrance percentage held for taxes.
Tolerance Warning Indicators
The system uses these tolerance warning indicators:
Term |
Definition |
|---|---|
|
Normal tolerance level. |
|
Below tolerance level. |
|
Exhausted or expired PO tracking number. |
(Green = normal)
(Yellow = below)
(Red = exhausted)When billable transactions are sent to PeopleSoft Billing, the system looks for a valid customer PO number that is associated with assignments marked Awaiting PO. If the PO is not expired or exhausted, the number is printed on the bill row for visibility on the invoice. The PO balance is updated according to the amount of the billable transaction. If the PO is expired or exhausted, the billable transaction is not sent to PeopleSoft Billing but is held until a valid PO is entered.
PeopleSoft Pay/Bill Management applies two levels of control:
If the PO is exhausted or expired, the system stops applying transactions to the PO.
If the activity exceeds the PO extension, the system stops applying transactions to the PO and enables you to provide an extension.
If you attempt to apply an exhausted or expired PO without an extension to a transaction, the system sends the transaction back to the PROJ_RESOURCE table with a billing distribution status of P, (Priced) and populates an error table. You can view the error table and use this information to initiate a new PO issuance with the customer or create an internal extension prior to running the transactions back through to PeopleSoft Billing. You can also write off the transactions by using the standard PeopleSoft functionality.
If the PO is open (not exhausted or expired), transactions should be applied to it. However, transactions are not split to apply residual PO amounts. For example, if a 50 USD amount remains on a PO and the transaction (PROJ_RESOURCE row) for 80 USD is applied, an error occurs. The PO appears fully exhausted, and its billing distribution status returns to P in the PROJ_RESOURCE table.
Transactions cannot span multiple extensions. For example, if there is a PO with 500 USD in extension #0 and 100 USD in extension # 1 and someone enters three transactions of 200 USD each, the system processes only the first two transactions. The third transaction is not processed even if the 100 USD remaining on extension # 0 plus the 100 USD on extension #1 equal 200 USD.
The after-tax invoice amount is applied against the PO tracking number. Because taxes are calculated in PeopleSoft Billing, an encumbrance percentage is established and applied to the committed amount when the transaction is first selected. Upon invoice finalization, the committed amount should be reversed and the actual invoice amount (net of taxes) is reduced from the PO amount to get the new remaining amount.
In addition to tracking customer POs, you can enter an encumbrance percentage on the Contract Profile page to set aside a portion of the PO balance for tax purposes. The encumbrance percentage should be reserved for sales tax, use tax, inclusive value-added tax (VAT), or exclusive nonrecoverable VAT.
For example, suppose that you enter an encumbrance percentage of 10 percent on the Contract Profile page and you have a PO with these amounts:
|
Original PO Amount |
Remaining Amount |
Committed Amount |
Encumbrance % |
|---|---|---|---|
|
20,000 USD |
1,100 USD |
0 USD |
10 |
When a billable transaction of 1,000 USD is run through the Billing to Projects/Contract Interface process (CA_BI_INTFC), the PO amount is successfully applied to the transaction with the resulting totals:
|
Original PO Amount |
Remaining Amount |
Committed Amount |
Encumbrance % |
|---|---|---|---|
|
20,000 USD |
1,100 USD |
1,100 USD* |
10 |
*1,000 USD is used for the transaction and 100 USD is used for the 10 percent anticipated tax.
If the invoice is finalized with an actual tax rate of 8 percent after running the Billing to Projects interface (BIPCC000), the PO amounts will be:
|
Original PO Amount |
Remaining Amount |
Committed Amount |
Encumbrance % |
|---|---|---|---|
|
20,000 USD |
20 USD* |
0 USD |
10 |
* 1,100 USD – 1,000 USD – 80 USD tax = 20 USD
If there are insufficient funds in the PO to cover the transaction amount plus the encumbrance amount, the transaction goes to an error table when you run the Billing to Projects/Contract Interface process. However, if you underestimate the tax amount, the system allows an invoice to pass through, resulting in an exhausted PO. For example, if your encumbrance is 10 percent, but the actual taxes are 12 percent, the system does not error out and you will go negative on the PO:
|
Original PO Amount |
Remaining Amount |
Committed Amount |
Encumbrance % |
|---|---|---|---|
|
20,000 USD |
(20 USD)* |
0 USD |
10 |
* 1,100 USD – 1,000 USD – 120 USD tax = –20 USD
Note: Set up your encumbrance percentage on the Contract Profile page to set aside a portion of the PO balance for tax purposes. This encumbrance percentage must not be lower than your expected tax percentage.