Purchase Orders and Receiving
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      3. Purchase Orders and Receiving

      Introduction to Purchase Orders

      This is an introductory article about the basics of Purchase Orders in PurchasePlus.

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      What is a Purchase Order?


      A Purchase Order is a document that a Purchasing Organization sends to a Supplier Organization. It specifies the products or services to be purchased, in a desired quantity, and at an expected price. 

      A Purchase Order can also include important information like Delivery Address, Expected Delivery Date, and other useful information that helps the Purchaser and Supplier communicate about the Purchase Order.

      Creating Purchase Orders


      Purchase Orders (PO’s) in PurchasePlus are generated automatically when a Requisition is approved. It is not possible to raise a PO without first raising and approving a Requisition. Products cannot be added to a Purchase Order once it has been generated - rather, a new Requisition must be created and approved.

      Purchase Orders inherit their settings (e.g. the assigned Account Code, the Delivery Address etc) from the Approved Requisition from which it was born, and shouldn’t need to be edited very much (if at all) before being sent to the Supplier(s).

      Users can View Purchase Orders that have been created by their Organization by visiting [Purchase Orders] → [View All] from the side navigation bar.

      View all Purchase Orders in PurchasePlus

      There is a lot of information being presented in this table - so let's start unpacking it.

      Purchase Order Statuses

      A Purchase Order can be in a number of different states:

      Purchase Order Statuses in PurchasePlus

      • Not Sent: A Not Sent Purchase Order has been created from an Approved Requisition, but it is yet to be Sent to the Supplier. Prior to being Sent, items on a Purchase Order cannot be Received or Invoiced. 
      • Sent: A Sent Purchase Order has been marked as Sent and the items on the Purchase Order can now be Received and Invoiced. Once all items on the Purchase Order are Received and Invoiced, the Purchase Order can be Closed.
      • Closed: A Purchase Order can be closed once it has been Sent, and all items on the Purchase Order have been fully Received and fully Invoiced. Closed is the final state of a Purchase Order and it indicates that the Purchase Order items have been successfully received and invoiced.
      • Cancelled: A Purchase Order can be cancelled before it has been fully processed. This action terminates the order and voids any transactions associated with it. Cancelled is the status indicating that the Purchase Order will not proceed to completion.

      Consolidating Purchase Orders

      Consolidating two or more Purchase Orders from the same Supplier will create a singular (new) Purchase Order, and any Sub-Line detail will be available in the newly created Purchase Order. The original Purchase Orders will be hidden and appear to no longer exist in PurchasePlus. This can be a powerful efficiency tool for Purchasers and their Suppliers but does require care when using. Learn more about Consolidating Purchase Orders.

      Consolidate Purchase Orders in PurchasePlus

      Sending Purchase Orders

      A Purchase Order in a Not Sent State can be manually sent to a Supplier electronically, or the Requisition may have had the setting applied to send Purchase Orders automatically upon the Requisition’s Approval.

      Sending Purchase Orders to Suppliers electronically requires the Supplier to have an Electronic Destination (for example, an email inbox, or another software system) configured for their Organization in Purchase Plus. 

      The act of Sending A Purchase Order and the act of Marking the Purchase Order As Sent are not the same thing; for example, a user may choose to Mark the Purchase Order as Sent, but opt against sending the Purchase Order Electronically (for example, if they phoned the order through to the Supplier).

      Sending Purchase Orders to Suppliers in PurchasePlus

      Finally, Purchase Orders that have already been Marked as Sent are able to be re-sent to the same or different Electronic Destination (if the Supplier has multiple Destinations configured on their Organization).

      Receiving Notes

      When the Supplier’s delivery arrives at the Purchaser’s Delivery Address, the goods can be marked as Received (or any variances can be accounted for) by creating a Receiving Note. 

      If the goods have arrived in multiple separate deliveries, then multiple Receiving Notes can be created and the Purchase Order will remain in a Sent State until all the ordered products have been Received (and Invoiced). 

      Please read our article about Receiving Goods to learn more about Receiving Notes.

      Matching Purchase Orders to Invoices

      When the Supplier sends the Purchaser an Invoice, it is good practice to make sure that the Invoice is Reconciled before approving it to be paid. 

      PurchasePlus helps our Purchasers to reconcile the Invoices in two ways, depending on how their Finance department likes to work:

      • By matching a Purchase Order to an Invoice, to make sure that what the Supplier has Invoiced the Purchaser for actually matches what the Purchaser Ordered. This is sometimes referred to as ‘2-Way AP Matching’.
      • By matching and comparing a Purchase Order and its Receiving Notes to an Invoice, to make sure that what the Supplier has Invoiced the Purchaser for actually matches what the Purchaser Ordered and Received. This is sometimes referred to as ‘3-Way AP Matching’. 

      Matching Purchase Orders to Invoices in PurchasePlus

      Discrepancies between the Purchase Order, Receiving Notes and an Invoice are picked up automatically by PurchasePlus and highlighted in the form of Invoice Flags, which must be addressed by the appropriate Purchaser Users before they can be Approved for payment. 

       

      Frequently asked questions

      • Question: Can I edit a purchase order after it has been approved?

        Answer: No, once a purchase order (PO) has been created from an approved requisition, it cannot be edited. In most cases, POs are automatically sent to the supplier based on your user settings. You can verify this by checking the Status Column. If the PO is completely incorrect, you can cancel it by following these steps:
        1. Click the 'More Information' icon (three dots) in the top-right corner of the PO.
        2. Select 'Cancel Purchase Order'.
        The supplier will be notified of the cancellation if it is in "Sent" status. To prevent the dispatch of incorrect goods, it’s crucial to cancel the PO promptly. Additionally, you must contact the supplier directly to confirm the cancellation and avoid shipment.

       

      • Question: Can I reopen a cancelled purchase order (PO)

        Answer: No, once a purchase order (PO) has been cancelled, it cannot be reopened.

        However, you can create a new purchase requisition (PR) from the invoice. Once the PR generates a new PO, you can match the invoice to the newly created PO.