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Demo 4.7: Create Purchase Requisition

ORDER PROCESSING

As we previously discussed, a purchase order is a communication sent to a
vendor in which a company commits to purchasing the specifi ed materials
under the stated terms. Figure 4-16 summarizes the elements of a purchase
order.

Figure 4-16: Elements of a purchase order

A purchase order is typically created with reference to a requisition, an
RFQ, a quotation, or a previously created purchase order. When reference
documents are used to create a purchase order, then much of the necessary
data is copied from these documents. In addition, a purchase order can be cre-
ated without reference to any document. In this case, all the necessary data are
entered manually.

Data

A purchase order includes data from a variety of sources, as shown in Figure
4-17. Besides the source documents, data from several master records, such as
material master, vendor master, info records, and conditions, are also included.
In addition, data from specifi c agreements and contracts with the selected ven-
dor can be incorporated.
Most of the data in a purchase requisition (Figure 4-14) are included in
the purchase order. In addition, the purchase order will contain other data
depending on how the order is created and which reference documents are
used. For example, material characteristics such as weight are included from the
material master. Vendor data, such as communication method, contact person,
and address, are included from the vendor master or quotation. Pricing data,
® 2
payment terms, and Incoterms are included from the quotation, purchas-
ing info record, other condition records, or specifi c contracts and agreements
with vendors, depending on how the process is confi gured at each company.

2 International Commercial Terms defi ne the roles and responsibilities of buyers and sellers with
regard to when ownership of materials changes hands and who bears the costs and risks associated
with transporting the materials. See International Chamber of Commerce page on Incoterms at
http://www.iccwbo.org/incoterms/ for a more detailed explanation.

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