Define Settings for the Buy-to-Order Process

This document explains how you define the necessary settings for the buy-to-order process.

The settings dealt with in this instruction are the settings you especially need to facilitate the buy-to-order flow.

Outcome

A complete setup of parameters is defined for the buy-to-order process.

You can carry out the buy-to-order process.

These files are updated:

Before you start

Follow these steps

Define general settings for acquisition

  1. Start 'Settings - Acquisition' (CRS723/E). Define the general settings for acquisition that must be considered when purchase orders are connected directly to the customer order lines.

  2. On the E panel, specify this information:

    • A status for planned purchase orders when created from line type 1 and line type 2
    • Whether you wish to retrieve the final status for planned purchase orders from the valid planning policy
    • How overshipped purchase orders are to be processed when they are connected to customer order lines
    • Whether to update the cost price for line type 2 and average priced items when the supplier invoice line is approved
    • Whether you want the sales price on the customer order line to be recalculated automatically
    • A goods receiving method
  3. Click Exit to finish.

Define field headings and contents

  1. Decide which fields to display and where values are retrieved from for customer order lines in 'Customer Order. Acquire Sales Item' (OIS145).

  2. Start 'CO Type. Update Field Selection' (OIS014/B).

  3. Select an order type used for buy-to-order. Select Open and go to the L panel, where you can specify:

    • whether the field headings and field contents are to be displayed,
    • where the field information is to be retrieved from,
    • whether the field information can be changed.
  4. Click Exit to finish.

Define buy-to-order settings for the customer order type and customer

  1. Start 'CO Type. Open' (OIS010/B), select the order type you want to use for buy-to-order. Select Open to go to the E panel.

    Note: You might have to change several order types to make buy-to-order work.
  2. On the E panel, specify whether the order type allows advance invoicing. Press Enter and go to the I panel.

  3. On the I panel, specify whether only one line type is to be managed according to the order type. Press Enter to go to the J panel.

  4. On the J panel, specify whether:

    • A new cost price is to be entered on delivery
    • Order-initiated items should create a purchase order automatically or if the acquisition panel should be displayed (automatic acquisition)
    • Order-initiated items should always create a purchase order
    • Planned purchase orders can be automatically released after customer order entry (automatic release).
  5. Click Exit to finish.

  6. Start 'Customer. Open' (CRS610/B1). Select a customer, select Open and go to the F panel.

  7. On the F panel, specify whether an advance invoice is to be created automatically during customer order entry.

  8. Click Exit to finish.

Define document links - Customer order to purchase order

Note: The document purchase order (document number 105) must be included in a document class. The document class determines what text must be copied.
  1. Start 'Std Document. Open' (CRS027/B). Select the standard document for purchase order (document number 105), select Open and go to the E panel.

  2. On the E panel, specify which document classes are to be retrieved from the customer order for the purchase order.

  3. Click Exit to finish.

Define dynamic and preliminary pricing rule

  1. Start 'Item. Connect Facility' (MMS003/B1). Select the desired item, select Open and go to the F panel.

  2. On the F panel, specify this information:

    • A costing model
    • The default values for the preliminary price code on the customer order line for line type 1 and line type 2
    • Whether you want the sales price on a customer order line (with line type 1 and line type 2) to be calculated dynamically during customer order entry.
  3. Click Exit to finish.

    If the parameters for price calculation for line types 1 and 2 are selected, the parameters described below in 'Settings - Sales Price Calculation' (OIS330/E) must be defined. See description below.

Define settings for sales price calculation

  1. Start 'Settings - Sales Price Calculation' (OIS330/B). Select a facility and select Open to go to the E panel.

    All parameters in (OIS330/E) are used for dynamic price calculation-that is, the price is calculated when the order line is created.

  2. On the E panel, specify this information:

    • A rounding-off category
    • A exchange rate type
    • A basic price list
    • Whether the base for sales price costing is to be rounded off
    • A costing type.
  3. Click Exit to finish.

Define an extended catalog item

If extended catalog items (ECIs) are to be used, you need to define an extended catalog item (ECI) as a predefined template item. An ECI is used to facilitate the management of items during customer order entry in the buy-to-order process. A new item is created with the template's features.

The ECI is defined in 'Item Type. Open' (CRS040), 'Item. Connect Facility' (MMS003), and 'Item. Open' (MMS001).

For more information, see Extended Catalog Item

Parameters to set

Define general settings for acquisition

Program ID/Panel Field The field indicates …
(CRS723/E) Status line type 1 and line type 2

… the status assigned to planned purchase orders when they are created from customer orders with line type 1 and line type 2. Line type 1 designates delivery from own inventory and line type 2 direct deliveries from supplier to customer.

The valid alternatives are:

20, 30, 40, 50, 55 = Manually defined status codes

60 = Purchase orders can be created.

Note that a planned purchase order is assigned the status specified in this field when customer order entry is completed. While entry is in progress, a planned purchase order is always assigned status 20 regardless of what is specified in this field.

(CRS723/E) Planning policy

… whether to retrieve the final status for planned purchase orders from the valid planning policy for each combination of item and warehouse. If there is no item/warehouse combination, or if this value is zero, the final status entered in the status field will apply; see description above.

(CRS723/E) Overshipped PO to CO – normal item/extended catalog item

… how overshipped purchase orders for normal items and/or for extended catalog items (ECI) are processed when the purchase orders are connected directly to customer order lines.

The valid alternatives are:

0 = Overshipped quantity does not change the CO, but is made available for other requirements when saved.

1 = Overshipped quantity updates the CO so that the customer receives more than what is ordered.

(CRS723/E) Invoice check

… whether the cost price for customer order lines with line type 2 (direct deliveries) and average priced items is updated when the supplier invoice line is approved.

0 = No, updated from purchase price in purchase order during shipment advice (PPS260) or goods receipt (PPS300)

1 = No, updated from purchase price in purchase order during goods receipt (PPS300)

2 = Yes, updated from invoiced price when the supplier invoice line is approved (APS100).

Alternative 0: The customer order can be invoiced after shipment advice or goods receipt. If shipment advice is not done, then goods receipt releases the customer order for invoicing.

Alternative 1: The customer order can be invoiced after goods receipt.

Alternative 2: The customer order can be invoiced after the supplier invoice line is approved.

(CRS723/E) Automatic recalculation of sales price … whether the sales price on the customer order line is automatically recalculated when the purchase order is being confirmed or the connected purchase order line is invoice checked. Note that only customer order lines that have been flagged as preliminarily priced and have price origin code C (Calculate) are recalculated during supplier invoice check.
(CRS723/E) Goods receiving method

… the method that controls the goods receiving flow for purchase order lines connected to customer order lines with line type 2.

The default goods receiving method is retrieved from one of four sources determined according to the following order of priority:

1 = Acquisition parameters

2 = Combination of item and supplier

3 = Item

4 = Purchase order type.

Note that the parameter 'Direct put-away' must be selected in 'Goods Receiving Method. Open' (PPS345).

(OIS014/L) Normal item and extended catalog item (ECI): line type 1 and line type 2 The (OIS014/L) panel is designed only for buy-to-order settings and is divided into two parts, one part for normal items (line type 1 and 2) and one part for extended catalog items (line type 1 and 2).
(OIS010/E) Advance invoicing

… whether the customer order type allows advance invoicing.

Customer orders that are invoiced in advance are not partially invoiced in connection with partial deliveries. Final invoicing occurs at final delivery. However, partial deliveries may take place as usual.

(OIS010/I) Default line type

… a line type used during customer order entry. If only one line type may be managed according to the order type parameter, the line type is displayed here.

The valid alternatives are:

0 = Normal order line

1 = An order line that creates a purchase order. Delivery is made from stock.

2 = A purchase order is created for the order line, with delivery address according to the customer order. Direct delivery from supplier to customer.

This parameter functions in combination with the parameter 'Line type' in 'CO Type. Update Field Selection' (OIS014/J) to facilitate customer order line entry.

Example: If delivery is to only take place from the company's own stock you can select 1 for 'Default line type' in (OIS010/J) and 0 or 1 for 'Line type,' then you do not need to enter these values during customer order line entry.

Note that if you want to be able to enter both normal items and items to be purchased on your customer order the 'Default line type' field must be changeable-that is, the 'Line type' field in (OIS014/J) must be set to 2.

(OIS010/J) Cost pricing at delivery

… whether a new cost price is to be entered upon delivery.

The valid alternatives are:

0 = The cost price is retrieved or entered manually during customer order entry.

1 = A new cost price for each customer order line is retrieved upon delivery. This applies only if it is greater than zero. Otherwise the cost price retrieved or entered manually during customer order entry applies.

If the retrieved or manually-entered cost price applies, two entries are created in inventory accounts. The first is a cost price change for the quantity that is to be delivered. The second is delivery to the customer at the cost price applicable for the order line.

Example:

When the order was entered, the cost price for item A100 was zero. A cost price of 525 was therefore entered. Upon delivery of the ordered quantity, ten, the cost price is still zero.

The following entries will be made in the accounts:

1. A cost price change of USD 525 for 10 units of A100, that is, a sum of USD 5,250

2. Delivery to customer at a value of 10*USD 525, that is, a sum of USD 5,250.

For line type 2 (direct deliveries) the cost price will be updated when performing goods receipt in 'Purchase Orders. Receive Goods' (PPS300) or invoice reporting in (ARS100). This is controlled by 'Invoice check' in (CRS723). See description above.

(OIS010/J) Automatic acquisition

… whether order-initiated items should always create a purchase order. This functions together with 'Automatic release' (see description below).

Note that if this field is not selected, or if basic data required to create a planned purchase order is missing, the acquisition panel in 'Customer Order. Acquire Sales Item' (OIS145/F) is always displayed.

If this field is selected, (OIS145/F) will not be displayed. Instead a message will appear on the screen informing you that a planned purchase order has been created automatically.

(OIS010/J) Automatic release

… whether planned purchase orders are to be manually or automatically released after customer order entry.

When released, a planned purchase order created for a customer order is assigned the status specified in 'Settings - Acquisition' (CRS723). Manual release can also be performed by selecting option 21=Release in 'Customer Order. Open' (OIS100).

(CRS610/F) Advance invoicing of ECI

… whether an advance invoice is to be created automatically during customer order entry.

The valid alternatives are:

0 = No

1 = Yes, if the customer order line has a reference number

2 = Yes, if the customer order line has a reference number and the item is an ECI (item category 11) or a non-coded item (item category 12).

Define Document Links CO to PO

Program ID/Panel Field The field indicates …
(CRS027/E) Document class 1–5

… whether the document purchase order (document number 105) is included in the document class.

Document classes on the purchase order document determine which text blocks are to be copied from the customer order line to the purchase order line during the buy-to-order process.

There are five document classes processed by M3. Each document can be included in one or more classes. The document classes are user-defined.

Define Dynamic and Preliminary Pricing Rules

Program ID/Panel Field The field indicates …
(MMS003/F) Costing model - sales price

… the identity of a costing model for sales prices.

Costing models can be connected to different price lists and are used to calculate basic prices and order-dependent prices. Costing models are defined in 'Sales Costing Model. Open' (OIS022).

(MMS003/F) Preliminary price for line type 1 and line type 2

… the default value for the preliminary price code on the customer order line for line type 1 and line type 2. The preliminary price code on the customer order line determines whether the sales price on a customer order line is preliminary.

Customer order lines with preliminary price marking will not be invoiced until the marking has been removed.

The valid alternatives are:

0 = The sales price is not preliminary.

1 = The sales price is preliminary.

2 = The sales price is preliminary.

3 = The sales price is preliminary.

Alternative 1: The preliminary price marking will automatically be set to 0 (final price) if sales price calculation is performed from:

'Planned Purchase Order. Open' (PPS170)

'Purchase Order. Open Line' (PPS201)

'Purchase Order. Confirm' (PPS250)

'Supplier Invoice. Record' (APS100)

'CO Delivery. Recalculate Preliminary Price' (OIS156).

Alternative 2: The preliminary price marking will automatically be set to 0 (final price) if sales price calculation is performed from:

'Supplier Invoice. Record' (APS100)

'CO Delivery. Recalculate Preliminary Price' (OIS156).

Alternative 3: The only way to remove preliminary price marking is to change the order line.

(MMS003/F) Calculate price for line type 1 and line type 2 … whether the sales price on a customer order line with line type 1 or line type 2 is calculated (dynamically) during customer order entry.
(OIS330/E) Rounding-off category

… the rounding-off category to be used. The rounding off category defines how the dynamically calculated sales price is to be rounded off.

For example, you might want sales prices higher than SEK 1,000 to be rounded off to the nearest crown. The rounding-off category determines the rounding-off rules.

The valid alternatives are:

00 = General (if nothing else is defined)

40 = Customer invoice totals (COP, SOP)

41–44 = Customer invoice totals (COP)

45 = Manual invoices (ARL)

46 = Interest invoices (ARL)

47 = Sales of fixed assets (FAS)

48 = Reminder charge (ARL)

50-59 = Price list calculations (COP)

70-79 = Budget entry (BUD)

80 = Net pay (PAY)

81–89 = Transaction amount (PAY).

(OIS330/E) Exchange rate type

… the exchange rate type. Rate type is mandatory information when maintaining exchange rates. The rate type is also connected to customers, suppliers, price lists, year-end and budget procedures.

The valid alternatives are:

01 = Variable rate

02–99 = May be used optionally.

When calculating a sales price, you need a calculation base, which can be a cost price, purchase price or a sales price from another price list. When the calculation base has a currency code other than the sales price to be calculated, you need to know what rules to apply when converting the calculation base from one currency to another. These rules are determined by the exchange rate type and are defined in 'Exchange Rate Type. Open' (CRS056).

(OIS330/E) Basic price list

… the sales price list used as a basis for calculating a current price list. This is used only when the current price list uses a costing model based on a price list.

Example:

If you have entered a costing model for sales price in 'Item. Connect Facility' (MMS003/F) with calculation base 6 (basic price from a sales price list other than the one entered in this field), then the price list entered in (OIS330) will be used as the basis for dynamic price calculation.

(OIS330/E) Costing base rounded off - sales price … whether the base for sales price costing should be rounded off. This is relevant only when calculation base 6 (basic price from another sales price list) is used.
(OIS330/E) Costing type

… the costing type which is used to distinguish different types of product costing.

When cost price is used as the calculation base for dynamic price calculation, you need to specify what costing type to be used. For example, costing type can be product cost, simulated cost, standard cost and so on.

Nine costing types can be defined in 'Costing Type. Open' (PCS005). Costing rates and markups are specified for each costing type and date.

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