About Purchase Order Entry
Purchasing for the office products industry has changed over the years. The investment in a purchasing agent used to be justified by the amount of money the agent saved the business through shopping around for the best price on each item. Today, savings are the result of buying power. Businesses now try to buy as many items as possible from the same wholesaler. This results in greater rebates and a stronger negotiating position with the wholesaler. Office products dealers who previously could not meet the minimum order requirements for direct purchasing can now align themselves with a buying group to overcome these minimum order obstacles.
We recommend that your business philosophy be Managing by Exceptions. Many features of the Purchase Order Entry application can help you maximise automation of the system and, therefore, your business's efficiency. Several of the automation features available involve purchasing functions. Although the initial set up requires thought and planning, the result is that the system automated the repetitive tasks of purchasing, and your and your employees handle only the exceptions.
The Purchase Order Entry application features the following:
Efficient Flushing of Backordered Items
Purchasing Order Notes (Specials)
Archiving of Purchase Order Information
Purchasing Reports
Planning to use the purchase order entry application involves the following:
Setting Purchasing Parameters: Purchase order parameters govern how your system handles procedures in purchase order entry. You change and view purchase order parameters through the (LF) Purchase Order Parameters screen. For more information, see Setting (LF) Screen Parameters.
Note: The Build Acknowledgement Index For JOUR-PO field in the (LF) screen is used with the electronic invoicing feature. To use electronic invoicing, your business must have Electronic Data Interchange (EDI).
Setting Communications Parameters: You must set up specialized parameters for each wholesaler and vendor with which you communicate. For more information, see About Communications Parameters.
Adding Vendors: You must add vendors from whom you purchase items in the Vendor window. For more information, see Adding a Vendor.
After your hardware, parameters, and vendors are set up, you can begin purchasing. Create purchase orders when you take customer orders that you cannot fill (backorders) or when you need to order more stock. There are three ways to handle purchasing:
Manually Create Purchase Orders: Create purchase orders manually.
Use the Short-Buy Process: Use the short-buy process to create purchase orders. With this method, you transfer items from the SHORT-BUY (backordered items), LOWSTOCK (items below your minimum stock levels), or RESTOCK (items that replace items you've sold) files to a purchase order. These files are created when you run the corresponding reports. The short-buy process is faster and easier than creating purchase orders manually, because it eliminates the task of entering individual items and quantities. For more information, see About the Short-Buy Process.
Using the Automated Short-Buy: Once you are familiar with and comfortable using the short-buy process, you can use the automated short-buy process to create purchase orders. The automated short-buy feature automatically builds and transmits short-buy purchase orders at specified times. You set global parameters to determine which items bo through the automated short-buy flow. You can also specify the time of day purchase orders are created, when they are transmitted, which vendor they go to, and the order in which they are transmitted. You can send P/Os to 10 vendors for each time slot. For more information, see About the Automated Short-Buy.
Through the automated short-buy function, the system automatically builds and transmits short-buy purchase orders at specified times. By setting global parameters, you can determine which items go through the automated short-buy flow. You also have the ability to specify the time of day the purchase orders are created and transmitted, the vendor they go to, and the order they are transmitted. For each time slot, you can send P/Os to 10 vendors.
When your purchase orders are complete, you must send them to your vendor or wholesaler. You can send purchase orders via fax, email, or Private Supply Network (PSN). PSN connects you to trading partners via the Internet, which eliminates speed limitations and other problems. You can use PSN to batch transmit purchase orders and receive acknowledgements from vendors. For more information, see About PSN.
Once your vendors or wholesalers receive your purchase orders, they send acknowledgements that show what items were ordered and how much of the order they can fill. If you send purchase orders electronically, the acknowledgement is also sent back electronically. After you have received the vendor's acknowledgement, you can pre-receive the order. While this step is optional, it allows you to purchase any items the vendor cannot fill from another vendor without waiting for the incomplete order to arrive first.
When the order arrives, you final-receive it. After receiving, flush backorders to fill them. You can then release any extra items to on-hand stock. Once this process is complete, you can purge purchase orders. Purge outdated purchase order information on a regular basis to ensure that PO-MASTER only contains current information. If you archive purchase orders when you purge them, you can still them up later. For more information, see About Purging Purchase Orders.
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