Purchase Orders
Purchase orders are contracts placed with vendors for the purchase of materials or service. Purchase order records contain general information about the purchase including the requestor, when items are required, the vendor, and more.
Details about each item or service are entered and maintained on purchase order line items. Your system configuration determines which stock items, services, and other types of items can be added as line items, how tax rates are handled for each line item, and so on.
Additional processing and record actions on the purchase order allows you to print the purchase order record, create a new revision, create a shipping memo, issue the purchase order to the vendor, expedite the purchase order, complete a Revision to the PO, and submit the purchase order for approval. After the purchase order is approved within your organization and issued to the vendor, next steps involve waiting for the items to be received, then receiving them into the system. Refer to for more information.
When changes are made to the purchase order, the document may or may not need to re-enter the approval process depending on your business practices and system settings. Your system may also be set so that the purchase order will transition directly to the approved or issued state, for instance, if the order was created by batch stock reorder. Note that only certain fields can be edited on an issued purchase order. If further updates are needed, such as changes that affect the pricing or quantity ordered, you have to create a new revision and resubmit to the vendor. Refer to
Understanding Purchasing for more information.
Purchase orders affect the On Order quantity for stock.
Common purchasing terms indicated on purchase order and purchase order line items include:
• Unit of Purchase: The unit of purchase for the item, such as “each”, “box”, “gallons”, or “cubic feet”..
• Unit of Issue: The way in which the item is issued in your storerooms.
• Purchase to Issue Ratio: The difference between how you buy the item and how you issue it. You may, for instance, issue in individual items but order the items by the box where one box would contain 10 individual items. The Unit of Purchase would then be box, the Unit of Issue would be each, and the P/I Ratio would be 10. The system uses the Unit of Purchase, Unit of Issue, and Purchase to Issue Ratio information to maintain quantities as parts are issued and new parts are received.
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