1. Using Procurement
  2. Considerations for Purchase Order Terms

Considerations for Purchase Order Terms

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

  • Acknowledgment

  • Payment Terms

  • Freight Terms

  • FOB

  • Pay on receipt

  • Confirming order

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:

  • Document: This method applies to all purchasing documents. The supplier must accept or reject the document in its entirety, no exceptions allowed.

  • Document and Schedule: This method applies only to purchase orders. This option allows suppliers to provide order acknowledgment response (accept or reject) on a schedule by schedule basis. Using this option allows suppliers to fulfill the accepted items on the order while renegotiating the other items using a change order.

  • Document and Line: This method applies only to blanket purchase agreements. This option allows suppliers to provide an acknowledgment response (accept or reject) on a line by line basis. Using this option allows suppliers to accept a subset of agreement lines and renegotiate the other lines.

  • None: Acknowledgment isn't required to execute against the document.

Pay on Receipt

Pay on receipt means that the application will automatically generate an invoice for this purchase order when it's 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 department..

Confirming Order

Select Confirming order to indicate that the purchase order is a confirming order. A confirming order is an order that you're 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."

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