What is a purchase order?

The purchase order represents the formal and final approval of a purchasing transaction

with the vendor. It identifies

·

The vendor

·

The material or service to be ordered

·

The quantity

·

The price

·

The delivery date and terms of delivery

·

In addition, the purchase order determines whether the ordered material is placed in

stock or consumed directly upon goods receipt. Purchase orders can be subject to a

release procedure.

The terms of payment

Structure of a purchase order

As in the case of other purchasing documents, the PO consists of:

·

Header

It contains information specific to the entire PO. For example, the terms of

payment and the delivery terms are in the header.

· Items

It contains information specific to the material or service. For example:

- Material number or short description ("short text")

- Quantity

- Price

For each item, you can enter additional information such as time-spot schedule lines and

item-specific texts. The PO history menu enables you to monitor deliveries and invoices

received with regard to the item.

Item category

The item category defines whether purchase order item:

·

Requires a material number

·

Requires an account assignment

·

Will be placed in stock· Requires a goods receipt (GR) and/or an invoice receipt (IR)