Value Add PO receiving

Purchase orders are used to procure the services of an external service vendor for the fabrication of a Value Add (VA) product. The purchase order for a VA product contains line items for the services that the vendor is performing to fabricate the product. A line item is also included for the finished product itself to enable you to receive the finished product back into inventory when the vendor completes and sends it to you.

When a VA product is fabricated, there may be an excess of raw material that needs to be returned on an Inventory In (surplus inventory)—II section of the VA order. When you complete the receiving process on a purchase order that is tied to a VA order, the VA Surplus Inventory Entry window is displayed so you can indicate that surplus inventory exists and should be returned on an Inventory In (II) section.

When you receive a VA purchase order inPurchase Receipt of Inventory Entry, edit checks are performed during the receiving process and errors are displayed for incomplete sections, the received quantity is greater than the ordered quantity, or if there is labor quantity that does not meet the finished product quantity ratio that you set up for your VA purchase order.

VA purchase order addons are set up to be allocated manually and can apply to multiple sections. The Cost Capitalization option in SA Administrator Options–Documents–Purchase Orders–Accounting must be set to Capitalize at Receiving.

Note: Although the Purchase Receipt of Inventory Entry- Addons window is available even if the administrative option is not set to Capitalize At Receiving, you can update addon numbers and amounts, but nothing is done with the updated addon values.