Processing a standard purchase order

You can process a standard purchase order.

Sterling Order Management System Software processes a standard Purchase Order as follows:

PO creation and update

1. Sterling Order Management System Software includes the price on a PO line from the Vendor Price Lists maintained in Sterling Order Management System Software.

   If vendor prices are not maintained in Sterling Order Management System Software, the price may be retrieved from an external vendor pricing application.

2. Sterling Order Management System Software provides the ability to lock a vendor unit price on a PO line.

   If the price list of a vendor was used for unit price calculations, Sterling Order Management System Software recalculates the unit price whenever there is any quantity change made to the purchase order line. This is done so that the appropriate quantity break-up can be used for unit price. If the PO unit price was overridden on the purchase order, Sterling Order Management System Software skips the calculation and recalculates only the extended cost of the line.

3. Sterling Order Management System Software raises a standard event on the successful creation and update of a purchase order. This can be used to update the financial application with expected purchase order cost related information.

   Receipt of PO

4. Sterling Order Management System Software increases inventory value upon receipt of product against a PO. This calculation is used to determine the Inventory Value.
5. Sterling Order Management System Software revalues the average cost of an item at a node when product is received against a PO. This calculation is used to determine the Average Cost.
6. Sterling Order Management System Software publishes the data for each receipt line. This is used to generate general ledger level postings in a financial application.
7. As each PO line can have more than one receipt recorded against it in Sterling Order Management System Software, it is possible for a PO line to be included in multiple general ledger interface records – one for each receipt line. Therefore, one event is published for each purchase order line as a receipt is recorded against it. If a line is received in multiple receipts, multiple events are raised
8. When a receipt is made against an existing on-hand balance that is less than zero, Sterling Order Management System Software uses the special handling described in Handling negative inventory balances.
9. Sterling Order Management System Software differentiates between the processing of standard Purchase Orders and chained Purchase Orders.

   For example, the A/P interfacing of a chained PO MAY need to be suppressed when the notification of fulfillment is signaled by the supplier submitting their invoice.

   Invoice creation

10. The Invoice matching function is performed in the financial application as follows:
    1. Discrepancies found during invoice matching function are posted in variance accounts other than the Inventory value account.
    2. If the Accounts Payable application generates a variance between the expected PO cost and the actual cost on the Payable Invoice, the variance must be passed back to Sterling Order Management System Software to be reflected in average cost. Sterling Order Management System Software provides an API (updateInventoryCost) that accepts the variance amount (plus PO reference and quantity invoiced) and attempts to adjust the inventory value by this amount. If the total on-hand is less than what was invoiced (due to subsequent shipments or issues), the total variance is prorated and applied to the remaining on-hand inventory. The amount not applied is passed back to the financial application so that it can be stored in an appropriate variance account.