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Purchase Orders ​

Purchase orders (POs) are legally binding documents that formalize the procurement of goods and services from vendors. This guide covers comprehensive PO management in Angage ERP.

Understanding Purchase Orders ​

PO Types ​

Standard Purchase Order ​

  • One-time purchases
  • Specific delivery date
  • Fixed quantities
  • Normal terms

Blanket Purchase Order ​

  • Long-term agreement
  • Multiple deliveries
  • Quantity ranges
  • Period-based

Contract Purchase Order ​

  • Service agreements
  • Milestone-based
  • Time and materials
  • Retainer-based

Planned Purchase Order ​

  • Forecasted needs
  • Tentative quantities
  • Flexible scheduling
  • MRP-generated

Creating Purchase Orders ​

From Requisitions ​

Most common method:

  1. Open approved requisition
  2. Click Create PO
  3. System populates:
    • Vendor information
    • Line items
    • Delivery details
    • Approval status
  4. Review and confirm
  5. Send to vendor

Direct PO Creation ​

For urgent or routine purchases:

  1. Navigate to Purchase → Purchase Orders
  2. Click New PO
  3. Select vendor
  4. Add line items:
    • From catalog
    • Free text entry
    • Previous orders
  5. Set terms and conditions
  6. Submit for approval

From RFQ Process ​

After vendor selection:

  1. Open winning quotation
  2. Click Convert to PO
  3. Verify pricing/terms
  4. Add PO-specific details
  5. Generate and send

Purchase Order Workflow ​

mermaid
graph TD
    A[Create PO] --> B{Approval Required?}
    B -->|Yes| C[Approval Process]
    B -->|No| D[Send to Vendor]
    C --> D
    D --> E[Vendor Confirmation]
    E --> F[Track Delivery]
    F --> G[Goods Receipt]
    G --> H[Invoice Matching]
    H --> I[Payment]

How-To Guides ​

How to Structure a PO ​

Header Information ​

Essential details:

  • PO Number: System-generated
  • Vendor: Selected supplier
  • Order Date: Creation date
  • Delivery Date: Required by
  • Ship To: Delivery location
  • Bill To: Invoice address

Line Item Details ​

For each item:

  • Item code/description
  • Quantity ordered
  • Unit of measure
  • Unit price
  • Discounts
  • Tax rate
  • Total amount
  • Delivery schedule

Terms & Conditions ​

Standard clauses:

  • Payment terms
  • Delivery terms (Incoterms)
  • Quality requirements
  • Warranty provisions
  • Cancellation policy

How to Manage Approvals ​

Approval Matrix ​

Based on:

  • PO total amount
  • Vendor type
  • Product category
  • Budget availability
  • Contract compliance

Fast-Track Approval ​

For efficiency:

  1. Pre-approved vendors
  2. Catalog items only
  3. Within budget limits
  4. Standard terms
  5. Auto-approval rules

How to Send POs to Vendors ​

Electronic Transmission ​

  1. Click Send PO
  2. Choose method:
    • Email: PDF attachment
    • EDI: Electronic exchange
    • Portal: Vendor portal
    • API: Direct integration
  3. Track delivery status
  4. Get confirmation

Manual Process ​

When needed:

  1. Print PO
  2. Get wet signatures
  3. Fax/mail to vendor
  4. Record sent date
  5. File confirmation

How to Handle PO Changes ​

Before Vendor Confirmation ​

  1. Open PO
  2. Click Amend
  3. Make changes
  4. Re-approval if needed
  5. Notify vendor

After Confirmation ​

  1. Create Change Order
  2. Document changes:
    • Quantity adjustments
    • Price updates
    • Delivery changes
    • Specification updates
  3. Get approvals
  4. Send to vendor
  5. Track versions

How to Track PO Status ​

Status Indicators ​

  • Draft: Being created
  • Pending Approval: In approval queue
  • Approved: Ready to send
  • Sent: Transmitted to vendor
  • Acknowledged: Vendor confirmed
  • Partial: Partly received
  • Complete: Fully received
  • Cancelled: Terminated

Tracking Tools ​

  • PO dashboard
  • Delivery calendar
  • Exception reports
  • Vendor portals
  • Email alerts

How to Manage Deliveries ​

Partial Deliveries ​

Handle split shipments:

  1. Receive what's delivered
  2. Update PO status
  3. Track backorders
  4. Adjust payments
  5. Communicate delays

Over/Under Delivery ​

Configure tolerance:

  • Under: 5% acceptable
  • Over: 2% maximum
  • Auto-reject beyond
  • Approval for exceptions
  • Return process

How to Close Purchase Orders ​

Automatic Closure ​

When all conditions met:

  • All items received
  • Invoices matched
  • Payments processed
  • No disputes pending
  • Within tolerances

Manual Closure ​

For exceptions:

  1. Review open items
  2. Document reasons
  3. Get approval
  4. Close PO
  5. Archive records

Advanced Features ​

Blanket PO Management ​

Setting Up ​

  1. Create blanket PO
  2. Define parameters:
    • Total value limit
    • Quantity ranges
    • Valid period
    • Release rules
    • Price agreements
  3. Get vendor agreement
  4. Activate for use

Release Orders ​

  1. Reference blanket PO
  2. Specify requirements
  3. Auto-populate terms
  4. Quick approval
  5. Track utilization

Three-Way Matching ​

Automated Matching ​

System compares:

  1. Purchase Order: What was ordered
  2. Goods Receipt: What was received
  3. Vendor Invoice: What was billed

Discrepancy Handling ​

  • Price variances
  • Quantity differences
  • Quality issues
  • Delivery delays
  • Resolution workflow

Vendor Performance ​

Track PO-level metrics:

  • On-time delivery
  • Quality compliance
  • Price accuracy
  • Documentation
  • Issue resolution

Budget Impact ​

Real-time tracking:

  • Commitment creation
  • Budget consumption
  • Variance analysis
  • Forecast updates
  • Alert generation

Best Practices ​

PO Creation ​

  • Verify vendor details
  • Confirm pricing
  • Check lead times
  • Review terms
  • Attach specifications

Vendor Communication ​

  • Send promptly
  • Get confirmation
  • Track changes
  • Document issues
  • Maintain records

Compliance ​

  • Follow procedures
  • Get approvals
  • Document exceptions
  • Maintain audit trail
  • Review regularly

Cost Control ​

  • Negotiate prices
  • Consolidate orders
  • Monitor spending
  • Track savings
  • Analyze trends

Configuration ​

PO Settings ​

Navigate to Settings → Purchase → Orders:

  • Number Format: PO-YYYY-00001
  • Approval Required: Yes/Threshold
  • Default Terms: Standard text
  • Tolerance Levels: Over/under %
  • Auto-Close: Enable/rules

Document Templates ​

Customize layouts:

  • Header/footer
  • Logo placement
  • Field selection
  • Terms location
  • Language options

Integration Setup ​

Configure connections:

  • EDI parameters
  • Email settings
  • Portal access
  • API endpoints
  • Approval apps

Reports & Analytics ​

Standard Reports ​

  • Open PO report
  • Delivery schedule
  • Spend analysis
  • Vendor performance
  • Budget utilization

KPI Dashboards ​

Track metrics:

  • PO cycle time
  • First-time match rate
  • On-time delivery %
  • Cost savings
  • Compliance rate

Troubleshooting ​

Common Issues ​

Cannot create PO

  • Check vendor status
  • Verify item details
  • Review user rights
  • Check number sequence

Approval delays

  • Review workflow
  • Check delegations
  • Verify rules
  • Monitor queues

Delivery tracking issues

  • Update PO status
  • Check receipts
  • Review tolerances
  • Verify locations

Matching failures

  • Compare documents
  • Check tolerances
  • Review pricing
  • Verify quantities

Next Steps

Learn about Goods Receipts to understand how to receive and process deliveries.

Angage ERP Documentation

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