Overview 

Purchase Orders are created to restock inventory levels to maintain minimum Stock on Hand requirements, to fill outstanding Back Order requests and to order Non-Stock items. Once the Purchase Order is committed, then stock can be received into Inventory in two ways:

• Goods Received Notes - that record the details of goods and services as they are supplied and the originating Purchase Orders are updated with this receival information; or
• Landed Cost module - where the Purchase Orders are attached to a Shipment form, import costs added and apportioned to the items and then committed for booking in on Book In forms.

Back Order Processing then allocates this stock to outstanding Sales Orders, Job Costing requirements, Warehouse Transfers, Work Orders and Service Manager jobs. As Invoices are received from the Suppliers, the liability is raised either by:

• Purchase Invoices - based on the Goods Received Notes; or
• Shipment Invoices - based on the Book In.

JIWA 7 incorporates the facility to handle Foreign Exchange currency for Creditor accounts.

Types of PURCHASE Orders 

There are four types of Purchase Orders, the main difference being the ordering of stock that has been placed on Back Order.

• Normal - Back Order stock requirements ordered on a normal Purchase Order are allocated to Sales Orders on the FIFO (First In First Out) method of stock control.   A user, prior to running Process Back Orders can change the priority of allocation.  These orders are further divided into:
   
  
  • Manual - all order lines are selected manually
  • Automatic - collates all outstanding stock requirements for a selected Supplier based on a selected re-order method - e.g. Replenish to Min or Weighted & YTD Sales Average.  Stock quantities and prices can be amended, order lines deleted and added as required
• Purchase Order Generation - is used to bulk create Purchase Orders, and to allow the user to make purchasing decisions based on price, weight and volume.
• Back to Back - the Purchase Order is linked to an originating Back to Back Sales Order and the stock is allocated to that Sales Order on delivery and receipting of the stock.  No additional lines can be added to the order.  Allocation cannot be changed to another Sales Order unless the original Back Orders are cancelled
• Warehouse Purchase Order – Back Order requirements in one warehouse are supplied by raising a Purchase Order on another warehouse instead of a Creditor.

Purchase Orders are entered by Supplier name or by Warehouse. Custom lines for non-inventory items and comment or text lines can also be added to the grid.  The most common method of re-ordering is Replenish to Minimum and the displayed quantity to be ordered is calculated as follows:

Where stock can only be ordered from the Supplier in specific quantities eg 150, the amount displayed rounds up to the nearest multiple.  Any editing of the amount will still adjust up to the nearest multiple of 150.

Copyright © 2012 Jiwa Financials. All rights reserved.

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