Create Agreements with Supplier

This document explains how you create an agreement with a supplier.

Outcome

An agreement is created. You can attach the agreement to the purchase orders. The list of the agreements can also be printed for further reference.

These files are updated:

The agreement is applicable for both planned purchase orders and purchase orders. The agreement can be mapped manually or automatically to purchase orders on 'Purchase Order. Open' (PPS200/A) and planned purchase orders in 'Planned Purchase Order. Open' (PPS170).

Before you start

Follow these steps

Create an agreement

  1. Start 'Purchase Agreement. Open' (PPS100).

  2. Click F13 to activate the P panel. Set the panel sequence to EFG12 and press Enter.

  3. Select a sorting order.

  4. Specify the supplier and agreement type (if sorting order 1 is used), and select New.

  5. On the E panel, specify the text, valid from, valid to, agreement date, status, period of notice, buyer, agreement priority, reference, update purchase quantity, object access group, currency, packaging terms, exchange rate type, delivery method, discount 2, delivery terms, payment terms, freight terms, and supplier agreement number.

    The agreement date specifies when the agreement was created. The renewal date specifies when the agreement should be renewed. This renewal date is disabled when the agreement is changed to status 40.

    The priority code is used as selection criteria when a quotation is copied to an agreement. If a line is coded with priority 1, the affected supplier is converted as the main supplier during the period of validity of the agreement. Also, the main supplier specified on 'Item. Connect Warehouse' (MMS002/E) can be updated by running 'Item. Update from Purchase Agreements' (PPS950)..

    The 'Update purchased quantity' field indicates if the purchased quantity on the agreement line (PPS101) must be updated with the recently reported quantity when performing purchase activities. The valid alternatives are:

    • 0 = No update
    • 1 = Update when planned orders are created
    • 2 = Update when purchase orders are registered
    • 3 = Update when planned orders are created and when performing other purchase order activities such as confirm, advise shipment, notify transport, goods receiving, quality inspection with reject, and processing of claims.
    • 4 = Update during purchase orders entry and when performing other purchase order activities such as confirm, advise shipment, notify transport, goods receiving, quality inspection with reject, and processing of claims.

    Alternatives 1 to 4 must be specified for the purchased quantity in order to reduce the agreed quantity. These options are used for blanket agreements or other agreement types.

    Alternatives 3 and 4 can be used in these examples:

    • The purchased quantity and purchased amount accumulators are updated on the related agreement line when:
      • PO line is confirmed, advised, notified, or goods received with a greater quantity than the last reported quantity.
      • PO line is confirmed, advised, notified, or goods received with a lower quantity than the last reported quantity and the 'Flagged compl' check box is selected.
      • Quality inspection is performed with reject quantity, then the accumulators are reduced on the related agreement line. Note that the approved quantity during inspection does not affect the update of accumulators.
      • Claim is processed with PO subline created.
    • The accumulators are not updated on the related agreement line when PO line is partially confirmed, advised, notified, or goods received with the 'Flagged compl' check box cleared.
  6. On the F panel, the agreement amount and purchase amount are updated.

  7. For Grower Agreements, a costing model for the settlement is suggested according to settings in 'Costing Model Sel' (PPS038). Accept the suggested model or manually select another.

  8. Press Enter to continue to 'Purchase Agreement. Open Lines' (PPS101/B).

  9. On the B1 panel, specify the group ID. Select New.

  10. On the E panel, specify the purchase price, discount 3, agreed quantity, purchase commitment, and unit of measure for purchase price and agreement quantity.

    The agreed quantity indicates the quantity specified in the agreement.

    The purchase commitment indicates if a buyer must purchase a specific volume. The volume is defined by the agreement quantity.

    The valid alternatives are:

    0 = No agreed volume.

    1= Yes, but the agreed volume is only for information purposes.

    2= Yes, the agreed volume is the minimum quantity permitted.

    3= Yes, the agreed volume is the maximum quantity possible. If the accumulated ordered quantity is exceeded, a warning is issued when you enter a purchase order or create the purchase order from a planned order for the proposal line. Press Enter to return to (PPS101/B).

    4 = Yes, the agreed volume is the maximum quantity possible. If the accumulated ordered quantity is exceeded, the user cannot release a planned order that generates a purchase order or create a purchase order line. The purchased quantity is not updated when the error message in the planned order is triggered.

    The status of the agreement is 10 by default and it can be manually changed based on the type of the agreement.

    The unit of measure of the agreement quantity (that is, agreed quantity, purchased quantity, received quantity and renewal quantity) and purchase price can be defined on the agreement level. This is possible when the group ID combination has an item number of product number with 'Alternate U/M in use' set to 2. These fields are protected once the agreement is connected to a planned order or purchase order line.

    The purchase price unit of measure is retrieved from the agreement line, and is by default set on a planned order and purchase order line upon creation. This serves as the highest priority in retrieving the unit of measure. If there is no defined unit of measure, it will be retrieved from 'Supplier. Connect Item' (PPS040) and then 'Item. Open' (MMS001).

  11. If the agreement type is a Grower Agreement, a costing model field is displayed on the G panel. Populate this where required if the fixed VAT code on 'Costing Element. Open' (PPS280) is to be overridden.

  12. Select option 11='Prices'. 'Purchase Agreement. Enter Prices' (PPS102) is displayed.

    (PPS102) is only displayed if the agreement is connected to an agreement type that allows volume-based prices and discounts.

  13. On the B panel, you can specify the From quantity, purchase price, and discount 3.

    The normal price is the representative purchase price for the item displayed on (PPS101/B) and is used for purchase costing.

  14. Once an agreement line has been created on a Grower Agreement, you can connect quality inspection specifications to ensure that all required tests are executed at receipt of goods. See Register Quality Tests Against a Grower Agreement.

  15. If custom fields are attached to the item, these fields will be copied onto the purchase agreement line. Select option 13='Custom fields' to start 'Custom Field. Update' (CMS474), allowing you to maintain the custom fields for the agreement line.

  16. If custom fields are attached to the supplier, these fields will be copied onto the purchase agreement header. Select option 16='Custom fields' to start 'Custom Field. Update' (CMS474), allowing you to maintain the custom fields for the agreement header.

  17. For agreements of type Grower Agreement, you can associate a base origin with an agreement line using related option 16='Base origin'. This is used to identify the original location of the seeds from which a crop was grown.

Printing agreements

  1. Start 'Purchase Agreement. Print Report' (PPS535).

    An agreement can also be printed using option 6 on 'Purchase Agreements. Open' (PPS100/B).

  2. Select the alternatives to limit the records to be printed.

    The available alternatives are:

    • Agreement number
    • Supplier number
    • Buyer
    • Agreement priority
    • Valid range
    • Agreement utilization rate
    • Renewal date
    • Group ID.
  3. Select the date format, report layout, and report text.

    The layout specifies the information available in the report.

  4. Press Enter to submit the printing job.

    If the status of the agreement is less than 30, it is raised to 30 when the printing job is submitted.

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