Purchase Orders Workspace

Use this workspace to create and maintain purchase orders, which are orders for services or items that you plan to buy.

You can create purchase orders manually in this workspace, but you can also create them from job budgets in the Job Cost module or from requisitions or requests for quotes.

After a purchase order is approved, the purchase is considered a committed expense and is recorded in the commitment accounting system.

A purchase order is an order for services, items, or assets. Because you can use this workspace for purchasing items for your warehouses, parts of the functionality of this workspace overlap with the functionality of the Item Purchase Orders workspace in the Item Purchase module.

You can handle purchases that are assigned to jobs in the Job Cost module using the interaction between this workspace and the Invoice Allocation workspace. To do this, enter the relevant job number in the sub-tab of this workspace. When you later receive the vendor invoice, you can automatically allocate the invoice to the job by referring to the number of the purchase order, which corresponds to the vendor invoice.

Just as with job-related purchases, you can also handle purchases posted directly to the G/L module. These could be for office supplies and stationery, for example.

In addition, you can choose to accrue the cost of a vendor invoice over multiple periods.

You can create purchase orders manually in this workspace, but you can also create them from job budgets in the Job Cost module. This way, a person who is responsible for drawing up job budgets can start a purchase process from the Job Cost module, requesting certain services, and a purchaser can manage the actual purchase process in this workspace. This is done via the Create Purchase Orders action in the Job Budgets workspace in the Job Cost module. When you use this action, Maconomy creates a purchase order for each vendor that is specified on the selected job budget lines, copying the selected budget lines to the relevant purchase orders. Most of the information for purchase orders that are created from job budgets is inherited from the job budget lines in question, but you can edit that information in this workspace. For more information about the creation of purchase orders from job budgets, see "Create Purchase Orders" in the Job Cost module.

You can also create purchase orders from a requisition or a request for quote, causing information from the requisition or request for quote to be copied to the purchase order. For further information on this, see the description of the Create Purchase Order action in the Requisitions workspace and the Create Purchase Order action in the Request for Quote workspace.

The tab displays standard information about the purchase order. When you have entered the information into the tab, press Return; Maconomy checks the information and opens the sub-tab. Here you enter purchase order lines that specify which items (goods or services) you want to buy. There are also a number of text fields for supplementary information.

When you create a purchase order, you can either choose to begin by entering the number of the vendor that is to supply the goods (or perform the services) on the purchase order, or you can choose to wait until it has been decided who is to supply the goods. When you enter the vendor, Maconomy retrieves information from the vendor information card. Maconomy then suggests this information in the purchase order fields. Thus you only need to enter or change the information that is different from what normally applies to the vendor.

If you choose not to enter a vendor on the purchase order right away, you must enter the vendor number when you receive an invoice from the vendor that was selected, since this is not transferred from the purchase order. Unless the vendor is blocked, the vendor number is transferred to the purchase order when the vendor invoice is posted.

You generally must submit and get approval of a purchase order before you can print it. However, you can choose to include unapproved purchase orders on the printout of this workspace by selecting the Include Non-Approved field in the Print Purchase Order workspace. Unapproved purchase orders are clearly marked on the printout to avoid unapproved purchase orders being sent to vendors by mistake. Approval of purchase orders can be performed in several levels by means of an approval hierarchy. You set up approval hierarchies in the Approval Hierarchies workspace in the Set-Up module. When a purchase order has been submitted, Maconomy checks whether the purchase order requires approval. The criteria that determine whether a purchase order requires approval and by whom the approval is to be performed can be, for example, the size of the purchase order's amount or the assigned job number. You must get approval by all required approvers before you can print the purchase order, assign it to a vendor invoice, and include it in the commitment accounts.

It is important to note whether the Allow purchase order for multiple jobs system parameter is selected. If you do not select this parameter, you can only create purchase order lines for the job that is specified in the tab of this workspace. If you select the parameter, you can enter different job numbers on the purchase order's lines. Selecting this parameter thus ensures that all lines on a purchase order are assigned to the same job when the lines are to be approved.

If you change a purchase order line to which an approved job accrual plan has been assigned, Maconomy cancels the approval of the job accrual plan in question. For more information about job accrual plans, see the description of the Job Accrual Plans workspace in the Job Cost module.

Commitment Accounting

A company that creates a G/L budget in Maconomy can use the budget to control its expected income and expenses. On the expense side you compare the budgeted expenses to the actual expenses. An expense becomes actual when a vendor invoice or a general journal is posted. It is recommended that you use Maconomy's commitment accounting system to keep control of the amounts that are to be charged to the profit and loss accounts in the future.

You use the commitment accounting system in connection with the Budget module and purchase orders and vendor invoices in the A/P module.

After a purchase order is approved, Maconomy creates entries in the commitment accounting system, and updates the committed amount for the given account. The commitment accounting of a company gives you an overview of the amounts that you have committed to paying but have not yet paid. At an early stage in the process, this enables the company to evaluate whether the actual expenses are within the limits of the budget. In the Budget Control workspace in the Budget module, you can compare the budgeted, the committed, and the actual expenses divided into periods, and thereby get an overview of the amount that is committed for the rest of the fiscal year.

In addition, the commitment accounting system provides you with the ability to control purchase order entries against specific combinations of dimensions (company, account, and dimensions marked as relevant on the commitment rule) for which a budget is entered. Maconomy compares the budget for a dimension combination with the actuals in that dimension combination, the previous committed amount, and the actual registration. Using the commitment rules that you specify in the Commitment Rules workspace in the Budget module you can choose to use automatic control of the commitment accounting system and thereby control that the company's budget is not exceeded as regards creation and approval of purchase orders. See the description of the Budget Control, Commitment Rules, and Commitment Levels workspaces in the Budget module for more information about budget control, commitment accounting systems, and commitment rules and levels.