Navigation:  Purchasing > Fundamentals of Purchasing >   Overview

Functionality

 

The Purchase Orders module provides the major functions of

 

 

Purchasing integrates with Accounts Payable, Inventory, Job Costing and Bill of Materials.

 

Purchase Orders can be generated for you by the system when you request the Generate Purchase Orders task. This task uses Purchasing control information in the Product table together with Warehouse-specific current OnHand Available Quantity plus outstanding Sales Orders and Purchase Orders information to generate Purchase Order transactions.

 

In addition to system-generated Purchase Orders, you can enter new Purchase Orders, and delete or change existing Purchase Orders using the Purchase Order Entry and Maintenance This task can be used to change or delete system-generated Purchase Orders as well as those you entered directly.

 

The Purchase Orders module may also be modified to suit particular installation requirements. Inventory, Sales and Purchasing can have numerous variations not only between industries but often between companies in the same industry. A fundamental characteristic of Products is their diversity.

 

The best approach for such applications is to build strong fundamental systems designed for adaptation that take real advantage of modern software technology. This is the method used with AdaptAccounts.

 

Some common terms

 

OnHand Quantity

The actual physical quantity we have in stock. If we receive 12 items of some Product such as "bol-273" and nothing else happens we have an OnHand Quantity of 12.

 
Receipts and Issues that occur in any of the Inventory, Sales Orders and Purchase Orders modules affect the OnHand Quantity.

 
Receipts occur mainly in the Inventory and Purchase Orders modules. However, Receipts may also occur in the Sales module as a result of returns from a Customer of products being returned to inventory that are processed as a Sales Credit Note.

 
Issues occur in the Inventory and Sales modules.

 
The OnHand Quantity is the result of subtracting the total Issues from the total Receipts.

Allocated Quantity

 

A Sales Order may allocate some quantity of an item for a Sales Order in advance of those items actually being shipped. Although those items are still physically in stock they are not available for sale to some other Customer.

 

For example, assume a Sales Order allocates 4 of that Product "bol-273" shown above but nothing else happens. Then our OnHand Quantity is still 12 and our Allocated Quantity is 4.

 

OnHand Available Quantity

The OnHand Available Quantity is the net result of subtracting the Allocated Quantity from the OnHand Quantity. It shows the quantity of an item that we have in stock available for sale.

 

Continuing with our "bol-273" example our OnHand Available Quantity is now 8 representing the OnHand Quantity of 12 less the Allocated Quantity of 4. The system maintains the current OnHand Available Quantity by Product by Warehouse in the ProductWarehouse table.

 

Purchasing OnOrder Quantity

A Purchase Order contains items that have not been received. These items have no effect on the On Hand Available Quantity but are reflected in the Purchasing OnOrder Quantity.

 

Continuing with our "bol-273" example, assume a Purchase Order is entered on which 3 are ordered. Our OnHand Available Quantity remains 12 but we now have a Purchasing OnOrder Quantity of 3.

 

Unit of Purchase

Within the Purchase Orders module the Quantity value is expressed in the Unit of Purchase specified on a transaction line item basis for the Product.

 

Purchase prices for a Product from a specific Supplier are based on the Unit of Purchase specified for that Supplier for that Product.

 

Multiple Warehouses

AdaptAccounts supports multiple Warehouses.  A Company must have at least one Warehouse.

 

All transactions in the Inventory, Sales and Purchasing application modules specify the particular Warehouse. The system presents the various Quantity values by Warehouse for each Product.