Creating purchase orders
The first step in the procure-to-pay process is to create purchase orders. These objects represent a document that formally request the purchase of a good or service from a vendor. To create a purchase order, we need to integrate most of the elements created in previous tutorials, like accounting entities, business partners, and others. Make sure to check the Getting started section of the tutorial before moving on with purchase orders.
We can access the purchase orders application through the application in the PROCURE-TO-PAY card group. Let's create a purchase order by entering the creation form. The first step is to select the basic information of the purchase order, like the accounting entity that accounts this order, the purchase entity and group that handle it, the vendor that will sell the products to us and the currency that the purchase will be handled in. We will make a purchase order for the Housionity business partner that is handled by our US division.
You can only select accounting entities whose purchases can be handled by the selected purchase entity. Head over to the purchase entities tutorial for more information.
The next step is to define the items that make up the purchase order. We can start off by selecting the item and ascription types. The item type indicated if the item corresponds to a physical product (goods) or a service. The ascription type is a field that is used to indicate the responsibility of the purchase. You can choose between an inventory ascription or an expense ascription. After this, we select the product group and the product that will be bought for this purchase order item. We also enter the location of delivery, the storage of delivery and the required delivery date. These three fields are optional unless we select an inventory ascription type, which makes the location field required. Finally, we enter the quantity of the purchase, the measuring unit of the quantities and the net unit price of the product. For this example, we will make a purchase order with two items of different item and ascription types.
The net unit price is obtained outside of AppliQloud through communication with your business partner. Make sure to enter the agreed price, otherwise you will have to cancel the purchase order and create it again.
Once we create the purchase order, a vital process happens. The purchase order travels from our system to the PIC, where our business partners can interact with a version of the purchase order from their own perspective. We can verify this process by entering the platform as a contact of our Housionity business partner, and entering the Purchase order requests card in the PROCURE-TO-PAY card group.
We can see that the purchase order we just created, appears in the environment of the vendor. The vendor can look at the purchase order and perform some actions from his perspective, like creating a delivery plan. Delivery plans are used for the vendor to indicate when each item in the purchase order will be delivered (or completed in the case of a service). Once the vendor creates a delivery plan, we can access it from the administrator application.
After the purchase order has been created and accepted by the vendor, it enters an invoicing cycle in which all of the items of the purchase order must receive an invoice. Here, the process takes a slight detour depending on the attributes of our purchase order items. If the purchase order item has an item type of SERVICE or an ascription type of EXPENSE, we can directly start creating invoices for these items. However, if the item has inventory ascription on a goods item, it needs to register that the goods have been received before allowing an invoice to be created. This is handled through the creation of goods receipt.