Formal request or instruction from a purchasing organization to a vendor or a plant to supply or provide a certain quantity of goods or services at or by a certain point in time.
A purchase order consists of a document header and a number of items.
The information shown in the header relates to the entire purchase order For example, the terms of payment and the delivery terms are defined in the header.
A procurement type is defined for each of the document items. The following procurement types exist:
Standard
Subcontracting
Consignment
Stock transfer
External service
The total quantity of materials to be delivered or services to be performed that is defined in the purchase order item can be subdivided in the schedule lines into various partial quantities with the relevant delivery dates.
For PO items to be supplied by subcontractors, you can specify the necessary input materials or components that are to be provided to the subcontractor for assembly or processing in respect of each delivery date stipulated.
An item of the procurement type “external service” contains a set of service specifications. Outline levels structure the service specifications and service lines determine the quantity ordered. Value limits are specified instead of service lines for services or work that initially cannot be specified precisely.
If services covered by an already existing contract are released (ordered, or called off against the contract), the PO item can contain a value limit relating to the contract in question.
Conditions can apply at various levels:
to the entire purchase order
At item level, to the material to be supplied or to the set of service specifications in the case of services
At service line level for individual services (tasks or activities)
Costs can be apportioned among various Controlling objects via the account assignment.
Vendors can issue confirmations to the relevant purchasing organization indicating their compliance or non-compliance with scheduled delivery dates.
The transactions following on from a purchase order are documented in the PO history on an item-specific basis.
Instead of the vendor as the order recipient, other business partners can appear in various partner roles (e.g. goods supplier or invoicing party).
In the purchase order, each item is destined for a certain plant. Each plant belongs to a company code, to which the vendor’s (creditor’s) invoice is directed.
You can enter text in a purchase order directly or change texts that are suggested by the system. There are two kinds of text:
Header texts: apply to the whole document
Item text: apply only to the relevant item
You define which texts appear in which order on printouts in Customizing for Purchasing. You can enter several header or item texts, which you can identify by your own codes.
Purchase orders can be subject to a release (clearance, or approval) procedure.
Note on the term “release”:
In MM Purchasing, this term is used
A)
as a generic term covering various kinds of order document issued against outline agreements (these may be release orders issued against contracts or scheduling agreement releases, i.e. types of rolling delivery schedule issued against scheduling agreements, and
B)
(as here) in connection with an internal approval or expenditure authorization process for purchasing documents. In both cases, “releasing” can be regarded as equivalent to “giving the green light” to go ahead with a certain action (e.g. to the vendor to deliver a certain quantity of materials, or to Purchasing to create or issue a PO for items requested by a user department).
Purchase orders can also contain empties.