Chapter 6: Purchasing
Ordering to Replenish Stock
The purchasing programs give you a simple, accurate method of entering and printing purchase orders, updating inventory status, and tracking outstanding commitments from your suppliers. An automated inventory control system requires constant updating of incoming merchandise. As byproducts, you receive analysis of vendor purchases and updating of the inventory Card-X history.
The tasks of the purchasing department include determining what items to purchase, possibly shopping vendors for price, service advantages, quality or availability, placing purchase orders, completing the paperwork, tracking and following up on outstanding P.O.'s, and verifying purchase receipts against P.O.'s.
Distributors place orders to replenish stock (and therefore service) levels, or in some industries, to fill commitments to customers for non-stocked items. This latter method is especially true of the highly-competitive, service-oriented industries.
Placing Purchase Orders
Enter new purchase orders using the Purchase Order Entry program. It is designed and operates like the Sales Order Entry program for inputting customer orders, making it easy to operate, fast, and accurate. Purchase orders already in the system may be changed or deleted using this program.
Start by supplying the vendor number for the new order. The system retrieves and displays the vendor's name and address and other heading information that is stored in the Vendor file. Then indicate the shipping location, which may be any one of your warehouses or directly to your customer. Change or correct any of the heading information, then continue to the line item section.
Enter the item number for the merchandise ordered. The system displays the description, the vendor's item number and vendor's cost. Enter the quantity ordered. The quantity on purchase order is updated in the inventory records immediately. The vendor cost comes from the inventory record, but you may override it. You can give each item a separate expected arrival (promised delivery) date. You can enter the disposition for each item, that is, where the merchandise is going upon arrival.
The unit of measure for purchasing the item may be different than for stocking and selling the item. You may buy a gross but stock and sell as each, for example. This conversion is handled automatically by the system.
If you want to change or delete an item at any time, select the appropriate option. Or you can review any lines that have already been entered.
Message lines--tagalongs and open typing--can be added to purchase orders just as with sales orders.
As with Sales Order Entry, you have an "Order Desk" environment. This means you can move to and from Purchase Order Entry, Vendor Insight, P/O Insight, and Inventory Insight while entering a purchase order. For example, while adding lines to a purchase order, you can press the appropriate function key (F4) to jump to Inventory Insight. Look up the desired item number, then press function key (F1) to return to Purchase Order Entry. You return to the Line Item screen from where you had left. The item number is passed from Insight to Entry so you don't have to re-type it.
Once the purchase order is entered, the system helps you track vendor commitments by using the Vendor Insight and Purchase Order Insight screens, Open Purchase Order List, Vendor Due Date Report, and Promised Delivery Report. Remember also, that the Backlog Report shows incoming merchandise by due date as well as commitments to customers.
Printing Purchase Orders
The next step is to print newly added purchase orders. This is done in a batch mode--printing all previously unprinted orders, or individually by selecting specific orders. Some firms choose to have pre-printed purchase order forms, but for most it is acceptable to print purchase orders on standard 3-part, 8-1/2 by 11 inch blank paper. The system prints the company's name, address, and phone number plus all necessary column headings. The purchase order is sent to the vendor, or may serve simply as a confirmation of a phone order.
While waiting for vendor shipments, you can monitor outstanding purchase orders by inventory item number. Print the Promised Delivery Report which sorts all the line items on open purchase orders by promised delivery date. You can choose a range of dates to print on this report.
Receiving
When a shipment arrives, use your copy of the printed purchase order as a receiving document. Make sure that the items and quantities actually received match the supplier's shipping documents or packing list. Then match these to the items you actually ordered. Note discrepancies, short-shipments, and backorders on the receiving document, then use this to input merchandise receipts using P/O Receiving Confirmation.
The Confirmation program lets you update the status of the purchase order and inventory. Enter the purchase order number and the system retrieves and displays the heading information using the same format as the Purchase Order Entry program. You can make changes to the heading information.
Then pass on to the line item screen. There are two things to be entered here. First, if the supplier has backordered the merchandise, input the quantity received and then quantity backordered. Second, you may want to enter a "landed" cost for each item.
Landed cost means the total cost of placing goods available for sale, which includes the vendor's cost plus a portion of the add-on charges--freight, handling, insurance, broker fees, etc.--for the entire shipment. This method properly capitalizes (includes in your inventory asset account) those charges.
Alternatively, you can expense the add-on charges and include them in cost of goods sold at the end of the fiscal period.
The P/O Receipts Journal prints the results of the confirmation of purchase orders. The journal lists each item, the quantity received and backordered, the landed cost and cost extension. You can refer to this journal to check the accuracy of the vendor's invoice when it arrives.
Proceed to update the journal. The inventory, purchase order, purchase analysis, and Card-X records are updated.
As with the Sales Order system, you can enter one-step purchase transactions, bypassing the printing of a purchase order and subsequent receipts confirmation. Use the same Purchase Order Entry program, but enter a different transaction code, either a merchandise receipt, or a vendor return. A merchandise receipt lets you add inventory, while the vendor return deducts inventory.
Automatic Purchase Orders
You may be able to use the Minimum and Maximum Stock Levels stored within your inventory master records to create automatic purchase orders. This will save data entry time and can assure that merchandise is replenished in time to meet demand.
As discussed in the Inventory Control chapter, setting a minimum stock level lets the computer determine when it is appropriate to reorder. The minimum is based on the anticipated demand for the item and the expected lead time. The maximum stock level is set so that the most economical quantity is ordered each time you purchase an item. The quantity ordered will bring the on hand quantity equal to, but not exceeding, the maximum.
To create purchase orders automatically, run the Automatic P/O Entry program. This is the standard Purchase Order Entry program with one additional feature. You enter the P/O header information as with any standard purchase order, selecting a specific vendor. Then, the program scans through the inventory master file looking at items with the primary vendor equal to the selected vendor. It places on the purchase order all items that are below the minimum stock level (reorder point). Now you may proceed with Purchase Order Entry which lets you add, change, delete, or review line items. The program has saved the time and effort to manually view and analyze the inventory needing to be ordered, and to enter each of those line items.
Master File Considerations
The vendor master file which you will help create on the computer, contains the basic and relatively constant information about each vendor. This information is essential to automating your paperwork for both purchasing and accounts payable. Therefore, the vendor file contains not only suppliers of inventory, but any other firm that provides goods or services used in the operation of your company.
The inventory master file contains information necessary to automate purchasing. It contains primary vendor information including the vendor number, vendor's item number, vendor cost, purchase quantity and cost units of measure.
The vendor's item number is the item number that the vendor uses in his operation and it most likely is different than the number you have assigned. If you have loaded the vendor's item number into the Inventory master record (and Secondary Vendor records), then the vendor's number will be copied onto the purchase order line item. This number prints on the Purchase Order document, as well as your item number.
In addition, you may choose to set up secondary vendor records using the Secondary Vendor Maintenance program. This allows you to store information about other possible sources of an inventory item. You can have as many secondary sources for each item as you desire. The secondary vendor record contains the vendor number, vendor's item number and description, vendor cost including four quantity breaks, and purchase quantity and cost units of measure. When you place the item on purchase order, the information in the secondary vendor file is retrieved and used in place of the primary vendor information for that order.
Insight
The Vendor Insight program is designed to give a comprehensive picture of the current status of any vendor on the video display screen. Several screens of information may be viewed including "master" information with vendor name and address, remittance name and address, terms, freight terms and profile; current open purchase orders plus recently received purchase orders; an accounts payable ledger; detail purchase analysis showing MTD, YTD, and Last-Year-Total purchase receipts from the vendor; and a Card-X list of purchase receipts from the vendor showing the most recent activity first.
GENESYS also has a Purchase Order Insight program to help you locate and display open purchase orders or recently received purchase orders when you only have the P/O number, vendor number, shipper number, or receiver number to work with. If the desired purchase order is still in the disk memory, you can bring the details of the transaction to the screen for viewing.
Purchase order transactions are removed from disk memory by the Month End Update. Closed purchase orders--those that have been confirmed as received, printed on the P/O Receipts Journal, and updated--are removed only if more than 30 days have transpired since receipt. If your system has P/O's and Accounts Payable integrated, then closed purchase orders are removed when the vendor's invoice for the purchase order has been paid in full.
Accounting Considerations
The purchasing system is an essential ingredient to accurate inventory accounting. When a purchase receipt is updated using the P/O Receipts Journal & Update, the inventory value for each item received is changed. This means that the quantity on hand is increased (or decreased) and the average cost is recalculated. The value added to the inventory record will match the debit to the inventory asset account.
Example: On Average
Item A101 Hand Cost Value
Prior to receipt: 3 6.35 19.05
Receipt 24 6.96 167.04
After receipt update: 27 6.89 186.09
DR Inventory - Receipts 167.04
New Average cost = (Value Prior + Value of Receipt) /
(Qty Prior + Qty of Receipt)
= (19.05 + 167.04) / (3 + 24)
= (186.09) / (27) = 6.89 (rounded)
The average cost field in each inventory record is a key field in your accounting system. It is used to place a value on your inventory when you print the Valuation Report. It is used when confirming sales orders to calculate the cost of goods sold and therefore the gross profit of each invoice. And, it is used when sales history records are updated so that gross profit history as well as sales history is available.
A liability is created when a purchase receipt is updated. That is, a credit to Accounts Payable-Pending is posted along with the corresponding debit to either the inventory asset or the purchases expense account.
Perpetual Inventory method
DR Inventory - Receipts 167.04
CR Accounts Payable-Pending 167.04
Periodic Inventory method
DR Purchases expense 167.04
CR Accounts Payable-Pending 167.04
If your system is set up to tie purchase receipts with Accounts Payable, a receiver transaction is also added to the vendor's Accounts Payable ledger. When the vendor's invoice for the receiver arrives, the operator uses Vendor Invoice Entry from the Accounts Payable Selector, calls up the receiver transaction, enters the invoice number and date, and the liability switches from A/P-Pending to A/P as the receiver transaction becomes an invoice transaction.
DR Accounts Payable-Pending 167.04
CR Accounts Payable 167.04
This may highlight discrepancies between receiver and invoice amounts. Such differences must be posted to the appropriate account at this time.
Receiver amount: 167.04
Vendor invoice:
Merchandise 167.04
Freight 12.00
Total 179.04
DR Accounts Payable-Pending 167.04
DR Freight In expense 12.00
CR Accounts Payable 179.04
You are advised to enter and update purchase receipts before confirming shipped orders. The P/O Receipts Update recalculates the average cost for each item received. Order Shipping Confirmation retrieves the inventory master record to get the latest average cost for each item shipped. This assures that your inventory value and cost of goods sold figures are accurate.
INCORRECTLY posting shipment before receipt
For example: On Average
Item B103 Hand Cost Value
Prior 8 6.15
Ship 12 -4 6.15
Receive 60 @ 6.30 56 6.30 352.80
DR Cost of goods sold 73.80
CORRECTLY posting receipt before shipment:
On Average
Hand Cost
Prior 8 6.15
Receive 60 @ 6.30 68 6.28
Ship 12 56 6.28 351.68
DR Cost of goods sold 75.36
If you deplete the on hand quantity of an item to zero, the average cost of the item remains equal to its last calculated value. When you next receive merchandise, the average cost becomes the landed cost of the new receipt.
On Average
Hand Cost Value
Initially 8 7.45 59.60
Ship 8 0 7.45 0.00
Receive 24 @ 7.60 24 7.60 182.40 Purchase Order Entry
Add, change, or delete Purchase Orders
Use Purchase Order Entry to enter into the system orders to your vendors to replenish stock. It allows you to add new orders, make changes to orders already in the system, or delete existing orders.
The usual two-step process to receive merchandise starts with inputting your purchase order. You have probably phoned in the order and must enter the purchase order to update the computer records, and print a purchase order document. This document may be sent to the supplier as an acknowledgment. Part of the document will remain in the warehouse, awaiting the arrival of a shipment.
Eventually, the shipment arrives. The warehouse worker uses the shipper's pack list document to check the shipment. Does the actual merchandise (item and quantity) match the packing list? Is there any damaged goods or missing parts?
The warehouse worker returns the shipper document with his notes regarding receipt of merchandise to the purchasing manager. The manager pulls his copy of the purchase order and compares the document with the shipper's document and writes on the purchase order form any backorders, short or erroneous shipments, or damaged goods.
The purchase order form (now a receiving document, or receiver) then travels to accounting where the clerk enters the receiver information into the computer to create a purchase receipt. This step is termed receiving confirmation. The clerk uses the P/O Receiving Confirmation program.
There are instances when the purchase order document is not required. Perhaps the merchandise has been ordered and delivered in one afternoon. Then, creating a purchase receipt is a one-step process. Using Purchase Order Entry, input the merchandise receipt (MR) transaction in nearly the same manner as entering a new purchase order.
Vendor return (VR) transactions to return merchandise to the vendor thereby deducting from inventory, can also be entered in a one-step process.
The Purchase Order Entry program lets you input these different transactions: purchase orders and return authorizations for two-step P/O processing, and one-step merchandise receipts and vendor returns.
When an item is placed on a purchase order, the quantity on purchase order or incoming quantity is increased. Hence you can look at the inventory record to see the total quantity expected in from vendors. When the item is received and the purchase receipt updated, the quantity on hand is increased and the quantity on purchase order decreased for the amount received.
Example: On On
Hand P/O
Prior 4 0
P/O for 24 4 24
Receive 18 22 6
Receive 6 28 0
Add A Transaction Purchase Order Header Entry
The purchase order "header" screen contains several fields of information regarding an order placed with a vendor including the vendor's name and address, the receiving (warehouse) location, terms, ship via, and requisition number. The first message appears:
You may (A)dd, (C)hange, or (D)elete an order, or (END)
Select "A" to add an order. "A" is the default entry. The word "ADD" appears in the upper right corner of the screen.
Transaction type
Enter "PO" to create an open purchase order and generate a purchase order document. The default entry is "PO".
Enter "MR" to create a "direct" merchandise receipt. No purchase order document will be created.
Enter "VR" to return merchandise to the vendor. "VR" stands for "vendor return". No purchase order document will be created.
Enter "RA" to create a return authorization and generate a vendor return document. This document can be used to pack and ship the merchandise you are returning. Eventually, you confirm the return and the inventory is credited.
Vendor number
Enter the desired 6-character vendor number. It must be a valid number in the Vendor Master File.
P.O. number
Enter the purchase order number. Your entry may be up to 6 characters. The system will prevent you from entering a number that already exists in the purchase order file.
Your system may be set up so that the next sequential P/O number is assigned by the computer. In this case you do not enter the number.
SHIP TO
Where is the order to be shipped?
To ship to one of your warehouses, enter an asterisk (*) and the warehouse number, such as "*2". The warehouse name, address and contact are retrieved from the Warehouse File and inserted in this order.
The default entry is "*1", indicating that the merchandise is to be shipped to the address of warehouse one.
To ship directly to a customer, enter a number sign (#) and the customer number, such as "#ABC500". If ABC500 is an existing customer number, the customer name, address and contact are retrieved from the Customer File and inserted as the shipping location of this order.
To enter the shipping address manually, type a blank space and press (RETURN).
Order date
Enter the date using an MMDDYY (month, day, year) format.
Promise date
Promised delivery dates are used in reports so they are very important. Enter the date by which you expect to receive the order. If all of the items are not due at the same time, enter the date by which most items are due. This field also appears on the Purchase Order Line screen so you can enter a promised delivery date for specific items if desired. Enter the promise date using an MMDDYY (month, day, year) format.
Requisition no
Enter the number of the requisition that authorizes this purchase. Your entry may be up to 8 characters.
Order taken by
Enter the name of the salesperson who took the order. Your entry may be up to 12 characters.
Terms
Enter the billing terms. Enter a valid two-character Terms Code from the Codes File.
Ship via
Enter the method of shipment. Enter a valid two-character Ship Via Code from the Codes File.
Freight terms
Enter the terms for the freight charges. Enter a valid two-character Freight Terms Code from the Codes File.
F.O.B.
F.O.B. (free on board). Enter the point at which your company becomes responsible for the shipment (usually Source or Destination). Enter a valid one-character FOB Code from the Codes File.
Special instructions
You can enter special instructions to be printed on the purchase order. Your entry may be up to 25 characters.
Discount pct
If applicable, enter the discount you shall receive for early payment. Your entry may be up to four digits with two decimal places (up to 99.99). This is an informational field only, no calculations will use this number.
Discount days
If applicable, enter the number of days that payment must be made within to take advantage of the vendor's early payment discount. Your entry may be up to three digits. This is an informational field only, no calculations will use this number.
Deposit
If applicable, enter the amount of your deposit, the amount paid in advance. Your entry may be up to eight digits with two decimal places (up to 999999.99). This is an informational field only, no calculations will use this number.
Disposition
Indicate the disposition of the merchandise on this purchase order. You might indicate "STOCK" if items are to be stored on the shelf. You may want to enter a customer number or a sales order number if this purchase is made for a specific customer order. Your entry may be up to six characters.
Each line item on the order also has a six-character disposition field. The header information becomes the default value for the line item field.
Division
This field is only important when your company has multiple division accounting and you want to include add-on charges to the purchase order. These expenses can be posted to the correct division only when you provide the division number. Enter a valid two-character Division Code from the Codes file.
Select a FIELD NUMBER to change, (X) to cancel, or (END)
Review the values for each field on the purchase order "header" screen. Any one of these fields may be changed at this time. If you need to enter data at any of the numbered fields, type the number you want to change, the cursor moves up to that field, then make your entry or correction. You may repeat this as many times as needed to get the header information accurate for this order.
When all fields are correct, press (END) to proceed to the next step, entering Line Items.
If you see that the wrong vendor has been retrieved for this purchase order, or you simply want to start over, press (X) and the new order is canceled and the screen erased.
Purchase Order Line Item Entry
The Purchase Order Line Item screen appears which provides for the entry of merchandise you are ordering from the vendor .This screen lets you:
Add a purchase order line
You can enter order data: the item number, quantity ordered (or returned), and vendor cost. Moreover, if this is an MR transaction, you can enter receipts data: the quantity received, quantity backordered, and landed cost.
Change a purchase order line
You can change many fields but not the item number. If the item number is wrong, you must delete the line and re-enter it.
Delete a purchase order line
This command removes a line from the purchase order.
Review purchase order lines
This is helpful if you want to verify that your entries are correct.
Inventory quantity on purchase order and vendor P/O balances are updated as each line is processed.
Add A Line
The system prompts with this message:
You may (A)dd, (C)hange, (D)elete, or (R)eview lines, or (END)
Select "A" to add a line. "A" is the default entry.
Item Number
Enter an item number. Your entry must exist in the Inventory File. The warehouse for which the order is placed is based on the Ship To location you entered on the Purchase Order Header screen.
You may choose to lookup the inventory items using the Inventory Insight program. Press the appropriate function key (F4) to switch to the Insight program. You may review inventory, select a line, then press function key (F1) to return to the purchase order line entry segment. The inventory item number is passed from Insight to the Entry program.
When you have entered a valid item number the values from the inventory master record display on the line item screen. Review to make sure the correct item has been retrieved.
You may choose the open typing mode by entering an asterisk (*). Use this mode to type information into the body of an order. You may type as many lines as you need, each one up to 63 characters in length. The free typing prints on the purchase order, but such lines do not carry forward if a factory backorder is created.
Quantity Ordered
PO, MR transactions:
Enter the number of units ordered. Your entry may be up to six digits.
RA transactions:
Enter the number of units to debit (returned or rejected). The system places a minus sign (-) in front of the number to indicate a return.
VR transactions:
Enter the number of units to debit (returned or rejected). The system places a minus sign (-) in front of the number to indicate a return.
Quantity Received
PO or RA transactions:
This field is skipped. You will enter the quantity received (or returned) when you "confirm" the receipt of the order.
MR transactions:
Enter the number of units received. Your entry can be up to six digits. The default entry is the quantity ordered. You may receive more than have been ordered.
VR transactions:
The quantity ordered is duplicated here. No entry is made. The system places a minus sign (-) in front of the number to show that merchandise is being returned.
Quantity Backordered
PO or RA transactions:
This field is skipped.
MR transactions:
Enter the number of units backordered. Your entry may be up to six digits. The default entry is the quantity ordered less the quantity received.
VR transactions:
This field is blank. No entry is made.
Landed Cost
PO TRANSACTIONS:
This field is skipped.
MR or VR TRANSACTIONS:
Enter the item's actual unit cost including the costs required to place the merchandise into inventory. This includes freight charges, insurance, broker fees, etc. Your entry may be up to eight digits with three decimal places (up to 99999.999). The default value is the vendor cost.
The computer calculates and displays the extended cost and total order amount. Extension is calculated as the unit vendor's cost times the quantity ordered. Differences in the purchase quantity and purchase cost units of measure are taken into consideration.
You have completed adding a new purchase order line. Again the Line Item options message appears and you may proceed to add, change, delete, or review lines, or (END).
Change A Line
You may change many of the fields you see on the Purchase Order Line screen. These fields are not accessible during the Add mode, simply to make the data entry faster. But if you choose to change a line, then most of the fields of information displayed for a line can be changed. When the system displays this message:
You may (A)dd, (C)hange, (D)elete, or (R)eview lines, or (END)
Select "C" to change a line. The program then asks:
Select a LINE NUMBER to change, or (END)
Enter the number of the line you want to change. The program retrieves the line and displays it. You can make your corrections. Refer to the Purchase Order Line Field List at the end of this section for details regarding any field.
Or you may press (END) to cancel the Change command.
When the procedure to Change A Line has been completed, the system again prompts, "You may (A)dd, (C)hange, (D)elete, or (R)eview lines, or (END)."
Delete A Line
You will need to delete an order line occasionally. In fact, if you have used the wrong item number when adding a line, you cannot change the line, you must delete the incorrect line and add a new line. When the program displays this message:
You may (A)dd, (C)hange, (D)elete, or (R)eview lines, or (END)
Select "D" to delete a line. The program then asks:
Select a LINE NUMBER to delete, or (END)
Enter the number of the line you want to delete. The system retrieves and displays the line.
Or you may press (END) to cancel the Delete command.
Do you want to delete this line? (Y)or(N)
Review the line information displayed and type "Y" to delete the line or "N" to retain the line. If you choose to delete, the program will remove the line from the purchase order and deduct from the inventory quantity on purchase order and from the order total.
When the procedure to Delete A Line has been completed, the system again prompts, "You may (A)dd, (C)hange, (D)elete, or (R)eview lines, or (END)."
Review Lines
At any point while entering an order you may want to look at lines previously entered. Use the review option. When the program displays this message:
You may (A)dd, (C)hange, (D)elete, or (R)eview lines, or (END)
Select "R" to review the order lines. The program then asks:
Select a starting LINE NUMBER, or (END)
Enter the number of a line you want to review. The specified line and all subsequent lines are displayed. Press (RETURN) to start with the first line on the order.
Or you may press (END) to cancel the Review command.
(RETURN) for add'l lines, or (END)
This prompt only appears if all of the lines cannot display on one screen. Press (RETURN) to display more order lines. Press (END) to cancel the Review command.
When the procedure to Review Lines has been completed, the system again prompts, "You may (A)dd, (C)hange, (D)elete, or (R)eview lines, or (END)."
End Line Item Entry
You may end your input of the purchase order at any time. When the system displays:
You may (A)dd, (C)hange, (D)elete, or (R)eview lines, or (END)
Press (END) to indicate that you have finished adding, changing, deleting and reviewing lines.
PO or RA transaction: Your work is done. The Purchase Order Header screen reappears.
MR or VR transaction: The system continues on to the Purchase Order Totals screen.
Purchase Order Totals Entry
The next screen only appears for MR and VR transactions. The program calculates the total cost of merchandise ordered and displays total fields at the bottom of the screen. You may override these fields and put Add-On Charges such as freight, insurance, broker fees, etc., onto the transaction.
You may (C)hange the above, or (END) to continue
Review the fields on the totals screen. Review the Add-On Charges.
You may (END) to complete the transaction with no additional changes.
Or you may type "C" to change any of the following fields. Many of these fields already contain the proper information as set up when the order was initially entered. You may press (RETURN) at any one of the fields to retain the data that currently is shown there.
Checked By
Enter up to three characters, the initials of the individual who checked the merchandise received. This is written at the bottom of the receiving document. This information may be valuable in the future when reviewing received purchase orders.
Shipper Number
Enter up to 12 characters for the number on the shipper's shipping document (packing list). This may be valuable in the future for retrieving the correct receiver and verifying a shipment. The shipper number is one method of look up in Purchase Order Insight.
Ship Date
You may want to enter the date the vendor shipped the merchandise, if it is available. Enter the date using an MMDDYY (month, day, year) format. This field is for information only.
Receiver
A sequential six-digit receiver number is assigned to the purchase order. Write this number on the Purchase Order form. You may need to refer to this receiver in the future, especially if your system is set up to tie P/O's to Accounts Payable.
Lead days
Enter the number of days between placing the order (ORDER DATE) and receiving the order (DATE RECEIVED). The program will have calculated this as a default value. You may press (RETURN) for the default value.
The DATE RECEIVED is the "as of" date you entered when starting the session.
The lead days is stored in the Card-X history file and displays on the Inventory Insight Card-X screen. The history of lead time can be used to automatically update the lead days in the inventory master record and thereby improve the automated Min/Max Inventory system. Refer to the Inventory Control chapter.
Select an ADD-ON CHARGE NUMBER, or (END) to continue
To add miscellaneous charges to the transaction, select one of the six available Add-On Charge lines. These charges are for such things as freight, handling, insurance, broker fees, etc.
Or you may press (END) to skip the Add-Ons.
Add-On Charge Code
Enter the code assigned to the charge. Your entry must be a valid two-character Add-on Code in the Codes File.
You may press (END) to cancel the add-on charge.
Add-On Charge Description
Enter a description of the charge. Your entry may be up to 35 characters.
The default value is the code description retrieved from the Codes File.
Add-On Charge Amount
Enter the amount charged. Your entry may be up to eight digits with two decimal places (up to 999999.99). You may enter both plus and minus amounts, thus, for VR transactions, a minus (-) is not automatically placed in front of the number you enter.
You may enter zero to delete the add-on charge.
The system again prompts, "Select an ADD-ON CHARGE NUMBER, or (END) to continue." Press (END) when you finish entering add-on charges.
You have just completed the procedure to add a purchase order. The Purchase Order Header screen reappears. The system prompts, "You may (A)dd, (C)hange, or (D)elete an order, or (END)".
Change A Transaction
You may change an existing PO or RA transaction. Or you may change an MR or VR transaction that has not been updated by the P/O Receipts Journal Update program. Changes are recorded in the Daily Purchase Order Register.
Purchase Order Header Entry
When the system prompts:
You may (A)dd, (C)hange, or (D)elete an order, or (END)
Select "C" to change an order.
Purchase Order number
Type the number of the purchase order you want to change. The system retrieves the order and displays the order header information for your review. The program then asks:
Select a FIELD NUMBER to change, or (END)
If there is any field you want to change, type the field number of that entry. The cursor will move to that field and you can make your correction.
Note: The Vendor Number and receiving Warehouse Code may not be changed. If either field is wrong, you must delete the order and re-enter it.
When all of the header entries are correct, press (END). The system goes to the Purchase Order Line screen for changes to the purchase order line items.
Purchase Order Line Item Entry
The system displays this prompt:
You may (A)dd, (C)hange, (D)elete, or (R)eview lines, or (END)
As instructed before, you may select any of the four options. The procedures are identical as those used when you add an order.
All changes to order lines are listed on the Daily Purchase Order Register. This is an audit trail of input made in the Purchase Order Entry program.
Press (END) to show that you finished adding, changing, deleting and reviewing lines.
PO or RA transaction: Your work is done. Return to the Purchase Order Header screen.
MR or VR transaction: The system proceeds to the Purchase Order Totals screen.
Purchase Order Totals Entry
The system recalculates and displays the totals for the transaction including any changes you have just made. The system asks:
You may (C)hange the above, or (END) to continue
As instructed before, you may change one of the fields on the bottom row or change the Add-On Charges listed above.
Press (END) when you are finished with this screen.
You have just completed the procedure to change an order. The Purchase Order Header screen reappears. The system prompts, "You may (A)dd, (C)hange, or (D)elete an order, or (END)".
Delete A Transaction
You may delete a PO or RA transaction. The deletion will be noted on the Daily Purchase Order Register.
Or you may delete an MR or VR transaction that has not been updated by the P/O Receipts Journal Update. A receiver number has already been assigned to the transaction, thus the receiver number must appear on the P/O Receipts Journal as voided.
The Purchase Order Header screen appears first.
Purchase Order Header Entry
When the system displays:
You may (A)dd, (C)hange, or (D)elete an order, or (END)
Select "D" to delete an order.
P/O number
Type the number of the purchase order you want to delete. The system retrieves the order and displays the order header information for your review. The program then asks:
Do you want to delete this order? (Y)or(N)
Make sure that this is the purchase order you want to delete. If it is, type "Y". If it is not the correct order, type "N".
The system scans through the line items on the order and deducts the purchase order quantity from the inventory file. The order is then deleted from the system. The purchase order number may be reused if desired.
The deletion of order lines is recorded on the Daily Purchase Order Register which serves as an audit trail of all input made using the Purchase Order Entry program.
When you have completed deleting an order the Purchase Order Header screen reappears. The system prompts, "You may (A)dd, (C)hange, or (D)elete an order, or (END)".
End The Program
When you have completed your purchase order entry tasks and you want to return to the Selector, return to the Purchase Order Header screen where the system prompts:
You may (A)dd, (C)hange, or (D)elete an order, or (END)
Press (END) to end the program and return to the Selector.
Purchase Order Line Item Field List
Item description
The description may be 35 characters.
Vendor's item number
The vendor's item number, as it is stored in the Inventory master record, appears automatically. The vendor's item number prints on the Purchase Order document. This helps to assure that you will receive the correct merchandise from the vendor.
The vendor's item number may be retrieved from the Secondary Vendor file if this item and vendor are stored in that file.
Promise date
This date is essential to proper inventory management. The availability of inventory as shown on Inventory Insight screens and on several inventory reports is based on the date entered here.
The promise date that you entered on the Purchase Order Header screen is the default value. Enter a date using an MMDDYY (month, day, year) format.
Vendor Cost
The vendor's cost, the quoted amount you will pay the vendor for this item, is stored in the Inventory File, and appears here. Or, the program can determine the cost from the Secondary Vendor file, even based on quantity breaks.
The format of this field depends on the configuration of your program. Normally, it can be up to eight digits with 3 decimal places (up to 99999.999).
Disposition
You can enter up to six characters to indicate where the stock will go when it is received. You can enter "STOCK" or type a customer number or sales order number to indicate that the merchandise is for a specific customer order. The disposition field prints on the Purchase Order form.
New promised delivery date
This field only appears if items have been backordered. Enter the new anticipated delivery date. When the system creates the backorder line item, this will become the Promised Delivery Date.
____________________________
A line is displayed for your entry of tagalong lines or comments. It can contain up to 63 characters. If you enter information on this line, another line appears below it. The system provides as many comment lines as you need. Press (RETURN) or (END) to tell the system that you have no more lines to enter.
Auto Purchase Order Creation Add new P/O's automatically
The automatic creation of purchase orders can be a time-saving, and cost-saving tool. The program lets you begin a purchase order as you normally would, but then scans the inventory file for the selected vendor, retrieves the inventory records, and determines if any are below their minimum stock levels. Those items below minimum are automatically added to the purchase order. The quantity ordered is calculated to bring the on hand stock level up to the maximum stock level.
Use this feature in conjunction with the Purchasing Proposal Report which appears later in this chapter.
Without minimum and maximum stock levels set up for the items of a vendor, this program will have limited results. If the minimum stock level is zero in an inventory record, then the item will be reordered automatically only when the available quantity falls below zero (you are out of stock entirely). Available is calculated as the on hand quantity minus commitments to customers plus what is already on purchase order.
Also, only the primary vendor is considered when placing purchase orders. Although an item may be purchased from multiple vendors, it will only be automatically ordered from its primary vendor.
Add New Purchase Order
You may only ADD a two-step purchase order (PO) transaction with this program. The Purchase Order Entry program is loaded. The Purchase Order Header screen appears first. The system prompts:
Vendor number
Enter the desired six-character vendor number. The vendor must exist in the Vendor File.
As with Purchase Order Entry, the program retrieves the vendor and displays the vendor name and address.
P/O number
Enter the purchase order number. Your entry may be up to 6 characters. The system will prevent you from entering a number that already exists in the purchase order file.
A purchase order number may be assigned by the system. You do not enter a number in this case.
SHIP TO
Where is the order to be shipped?
To ship to one of your warehouses, enter an asterisk (*) and the warehouse number, such as "*2". The warehouse name, address and contact are retrieved from the Warehouse File and inserted in this order.
The default entry is "*1", indicating that the merchandise is to be shipped to the address of warehouse one.
To ship directly to a customer, enter a number sign (#) and the customer number, such as "#ABC500". If ABC500 is an existing customer number, the custo