Why should I set up Purchase Order vendors?

In the Purchase Order application, you can further define an Accounts Payable vendor with information specific to your purchase orders such as the vendor's phone and fax number, default freight and shipping terms, and vendor limits. A vendor must exist in the Accounts Payable application before it can be defined in the Purchase Order application.

Purchase Order vendor information includes:

  • Open Purchase limit

  • Maximum Order Amount limit

  • Minimum Order Amount limit

  • Undershipment Cancel Percentage tolerance

  • Overshipment Allowed tolerance

Vendor tolerances are used during receiving to cancel backorders within a percentage of the original amount and allow overshipments from the vendor. When vendor tolerances exist, they override the tolerances for the PO company.

Undershipment Cancel Percentage

The undershipment cancel is the percentage of undershipment allowed at receiving for a vendor. This overrides the tolerance defined for the Purchase Order company. For undershipments within this tolerance, back orders are canceled. If undershipments exceed this tolerance, backorders remain effective.

Overshipment Allowed

The overshipment tolerance is the percentage of overshipment that is allowed at receiving time for this vendor. This overrides the tolerance defined for the Purchase Order company. If the tolerance is exceeded, a buyer message is created and the receiver must be reviewed to continue processing.

Vendor Purchase From Location

Like Accounts Payable vendor locations, you can use the vendor purchase from location to specify multiple distribution addresses for a single vendor. Some vendors may have several locations from which you can order. If you send purchase orders to different warehouses belonging to the same supplier, each warehouse would be a vendor purchase from location. You can define Purchase Order vendor information to a specific purchase from location. The location must be defined in Accounts Payable as a vendor location prior to adding it as a vendor purchase from location.