Generating Purchase Orders for Stock
The 'Create Purchase Orders' function creates Purchase Orders by comparing stock levels with minimum stock quantities for each Item, taking quantities on unfulfilled Sales Orders into account ("Stocking" Purchase Orders). You can run this function from the Operations menu of the 'Purchase Orders: Browse' window and as a Maintenance function. The Purchase Orders that it creates will be saved in an unapproved state. You can print them in a single batch, using [Documents] button in the Master Control panel. Printing is covered in more detail
here.
In determining the Items for which Purchase Orders will be raised, certain conditions must be met.
In the Purchase Item register the following information must be present:
- The Items to be purchased must be registered as Purchase Items. For each Item there must be one Purchase Item with a Supplier specified and with the Default check box switched on.
- Each Purchase Item should have a Normal or Minimum Order Quantity specified.
- Each Purchase Item should have a Price (i.e. a normal purchase price) specified.
- If an Item does not have a corresponding Default Purchase Item, it will still be included on a Purchase Order if you have specified a Default Supplier in the Purchase Order Settings setting. In this case, the purchase price of the Item will be the Cost Price from the 'Costs' card of the Item record.
Note that each Item number may have more than one corresponding Purchase Item, perhaps representing the different Suppliers from whom it is available. Only one Purchase Item for each Item should have the Default check box switched on.
In the Item register the following information must be present:
- You should specify a Minimum Stock Level on the 'Stock' card of the Item screen. Alternatively, if you want to specify separate Minimum Stock Levels for each Location, use the Minimum Stock Levels setting in the Stock module.
- The Items to be purchased must not be Closed.
Finally, the function will not create any Purchase Orders if there is no valid record in the
Number Series - Purchase Orders setting. This problem will usually occur at the beginning of a new year.
Before using this function, it is recommended that you produce a Deficiency List or Purchasing Suggestion report, so that you become aware of the Items for which Purchase Orders are likely to be created.
All Items can be included in Purchase Orders providing they meet the criteria above: the function is not limited to Stocked Items. If you have specified a Default Supplier, you should only specify a Minimum Stock Level in those non-Stocked Items that you want to be included in Purchase Orders. Note that the Deficiency List and Purchasing Suggestion reports only list Stocked Items.
Selecting the 'Create Purchase Orders' function brings up the following dialogue box:
If you leave all the fields blank, the function will generate Purchase Orders for every Item where the stock balance is lower than the Minimum Stock Level, taking outstanding Sales, Purchase and Production Orders into account. The order quantity for each Item will be that required to bring the stock balance up to the Minimum Stock Level or the Normal or Minimum Order Quantity from the Purchase Item, whichever is the greater. If this suggested order quantity is less than the Minimum Order Quantity in the Purchase Item, the Item will not be included in a Purchase Order. If you are using the Suggest Full Multiples of Normal Ordering Quantity option in the
Purchase Order Settings setting, the suggested order quantity will be a multiple of the Normal Order Quantity. Each Purchase Order will be in the name of the
default Supplier of each Item or the Default Supplier from the
Purchase Order Settings setting. Otherwise, use the fields as described below.
- Item No.
- Paste Special
Item register
- Range Reporting Alpha
- Use this field to ensure the function considers the stock/re-ordering position of a particular Item or range of Items.
- Group
- Paste Special
Item Group register, Sales Ledger
- Use this field to ensure the function considers the stock/re-ordering position of the Items of a particular Item Group.
- Supplier
- Paste Special
Suppliers in Contact register
- Use this field to ensure the function considers the stock/re-ordering position of Items with a particular Supplier specified in their Default Purchase Items.
- Items without a Default Purchase Item (i.e. those using the Default Supplier specified in the Purchase Order Settings setting) will not be considered if you enter that Supplier here. You can only order such Items using the Item Number or Group fields above.
- Maximise Order for Specified Supplier
- If you have specified a Supplier, check this box if you would like to include on the Purchase Order Purchase Items that they supply but for which they are not the default Supplier.
- If you check this box and do not specify a Supplier, no Purchase Orders will be created unless you have specified a Default Supplier in the Purchase Order Settings setting. In this case all Items will be ordered from that Supplier (even those that have a Default Purchase Item).
- Create new Purchase Order
- Check this box if you always want new Purchase Orders to be created. Otherwise, if there are any unapproved or open Purchase Orders in the name of any of the Suppliers used by this function, any Items to be purchased from those Suppliers will be added to the earliest of those Purchase Orders.
- If you use this option, separate Purchase Orders will be created for each Item, even if they come from a single Supplier.
Press the [Run] button to start the generation of Purchase Orders. When the process is finished, the new Purchase Orders will be available for viewing, modifying and approval in the Purchase Order register.
Note that the purpose of this function is to create Purchase Orders both for Items that have fallen below their Minimum Stock Levels ("stocking" Orders) and for Items on Sales Orders that you cannot fulfil from stock. If you need to create Purchase Orders for Items on outstanding Sales Orders only ("back-to-back" Purchase Orders), use the 'Create Purchase Orders' Maintenance function in the Sales Orders module.
