Automatic Purchase Orders - From Back Orders

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Use this feature to automatically create one or more purchase orders based on your current stock ordering requirements as per the customer Back Order Control Centre.

Purchase Orders will be created for back orders when:

Back orders have not yet been allocated stock
Are not on hold
Have a supplier account code assigned to them
Have not already been ordered via this facility

An alternative method of ordering stock is to base your reorder quantities on your overall stock replenishment requirement, rather than on pending back orders. For more information on this method see the topic: Automatic Back Orders - Stock Replenishment.

If the above method is not feasible then having your reordering process driven by your unfilled customer orders, as described here, is an alternate approach. The normal procedure is to:

1. Enter sales orders.

2. Go to the Back Order Control Centre and allocate available stock to those orders.

3. Run the Automatic Purchase orders - From Back Orders facility for orders that could not be filled from available stock quantities.

Advantages Of Ordering From Back Orders

This system can be utilised immediately, without having to rely on having other aspects of your Stock Control system accurately managed by the system. For example, purchase orders and suggested stock reorder levels do not have to be set correctly. As well, since your back order is linked to your purchase order, you can closely monitor the status of specific customer orders using this system.

Disadvantages of Ordering From Back Orders

This reordering method does not take into account optimum stock holding quantities determined via reorder levels. Nor does it consider purchase orders that may already be pending delivery. Hence over and under stocking is possible, especially if you are entering purchase orders manually, in addition to generating them automatically.

Before printing, emailing or faxing your automatically generated purchase orders, print an Overstock Levels Report to ensure over ordering is not taking place. A Reorder Level Report can also ensure that there is no under ordering still occurring.

Customer Account Code

If specified, only back orders relating to this customer code will be included in purchase orders. Leave blank to include all customer accounts.

Start Date Due

The earliest date of back orders to include checking for inclusion on purchase orders. Normally this date is from or earlier than the first back order in the system.

End Date Due

The date of the last back order to end processing of.

From Transaction No

If specified, only back orders from transactions with a transaction number equal to or greater than this date will be ordered.

To Transaction No

If specified, only back orders from transactions with a transaction number equal to or less than this date will be ordered.

Transaction

You may select here which types of transactions to order. The default option is to order all types, which includes sales orders and back order invoices.

Release All

Select to raise purchase orders for all transactions in the above date range.

Marked Release

Select to include only those back orders that have been ticked via the Back Order Control Centre. (This is done by selecting the back ordered item and clicking with the mouse under its column.)

The above specified date range still applies.

Manual Purchase Check

Tick if purchase orders will appear on screen where they can be edited before, or cancelled before, final production. This is recommended.

Itemise Back Orders

Tick to include the original invoice number/order number, reference and customer name above each set of ordered stock items on purchase orders. This is useful if you need to keep track of who you are ordering the goods for on your purchase document.

Use Order Cost

Tick this option to transfer the original invoice or sales order cost onto the purchase order. If this option is left unticked, the cost price recorded on the stock item's record is used instead.

Keeping cost prices is useful if you need to retain the original cost because it may be different from the standard stock item's cost. This is a situation which may arise when ordering special or non-standard stock items. For example, if you have ordered a special item for a customer, it may have a different price from the standard stock item price. If this differing cost price is recorded at the time the order is entered into the system, this setting will use this cost price when creating your purchase order.

Special Only

Only stock items ticked as Special in Stock Control will be ordered if this option is selected.

Requisitions Only

Tick if you only want purchase orders generated for internal requisitions. If you leave this unticked then sale orders and requisitions will be combined on the same purchase orders.

Cancelling Automatic Ordering

The automatic purchase order process is cancelled when you leave the purchase order area, or when you go to edit another purchase order, or when you select Tools|Automatic Orders (Stock Replenishment or Pending Back Orders) while already in automatic ordering mode.

generate/multi.gif This automatic purchasing system is normally a global procedure; which means other users cannot run it while it is in operation. However, if the ordering process is limited to a single transaction that has less than 51 line items on it, it is possible to run this procedure from multiple computers at once. To ensure that a single transaction is processed only, enter the same transaction number in the From Transaction No. and To Transaction No. fields.

Hints & Tips

From the Tools menu select Skip To Next Order if you want to skip over a particular purchase order. You will be presented with the purchase order again if you re-run the automatic ordering utility.
When running automatic purchase orders keep in mind that stock that has not been assigned a supplier code will not be ordered. If multi-locations is being used that stock item must also be assigned a location.
If you are running multi-locations the location must exist as an account/department in the supplier accounts file. This account must be set to type "Internal".
If you leave a purchase order and then do not proceed with further purchase orders, you will be presented with the purchase order you last left off with, the next time you run this operation.
After a purchase order has been created for a series of back orders, CAPITAL will not include those back orders in future automatic purchase orders, irrespective of specified dates. This still applies even if you edited the purchase order and did not end up ordering the listed goods.
There are two ways to enable CAPITAL to reorder the same goods again. One is to re-total the original sales order, order requisition or invoice responsible for generating the back orders. The second is to click on the checkbox under the column in the Back Order Control Centre.

The Automatic Purchase Order System considers the Purchase Unit quantity when ordering. It will always round up to the nearest acceptable purchase unit if one is specified in Stock Control.
Even if a purchase order is itemised, such that the same item appears on the purchase order multiple times, CAPITAL will base the purchase price on the best possible quantity break for the total number of units ordered of each item, when this is applicable. For more information on supplier quantity breaks see the topic: Supplier Special Pricing.

During the automatic reorder process the Back Order Control System is locked to prevent other users from changing back orders during the creation of purchase orders. Automatic purchase order generation should take place during times when new sales orders are not being entered in the system.

If minimum purchase units are set for stock items, and the purchase order is being itemised, and the same product item appears more than once per sales order or invoice back order, then each stock item will be rounded up to the minimum purchase unit requirement. This can best be avoided by using the Duplicate Stock Item Check feature, if this is not the system behaviour you desire.

If sales orders or invoices are edited and resaved, resulting in back orders being replaced, the new back orders will be marked for automatic purchase ordering again. CAPITAL's stock level reports can assist in ensuring that stock is not over ordered.

Automatic Ordering Check List

These conditions must apply before CAPITAL will place back orders on a purchase order:

Goods must be assigned valid supplier codes.
Back orders that have already been allocated stock quantities are NOT ordered.
Only stock items not on 'back order hold' will be ordered.
Only stock items not marked as on 'stock hold' will be ordered.
Goods already automatically ordered are not automatically ordered again.
The stock item must still exist in Stock Control.
If multi-location stock control is active, stock items must be assigned valid, non-blank locations.
The location, if applicable, must exist as a supplier account/department in the supplier file.

One advantage of using the Automatic Purchase Order System with the back order file, is that reference information from the back order is transferred into the purchase order automatically. The practical upshot of this is that you will be able to print stock labels when taking delivery of stock, that include your customer's name and address details if you wish. This information is not available if you are doing automatic ordering based on stock levels only.

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