My 2p about ERP Solutions, Information Worker Solutions and other software products (mainly Microsoft Dynamics AX and Microsoft SharePoint).

02 January 2012

Purchase orders in project management

by Patrik Luca 3 comments

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Some information about creating purchase orders for projects in AX 2012 can be found on TechNet.

In the past, I wrote already a post Project Purchase Orders vs Purchase Orders. This post was valid for AX 2009 and before, some changes have been made in AX 2012.

I would like to extend this information somewhat in this post.

As mentioned in the TechNet article, three types of purchase orders can be distinguished. I call them the manually created purchase orders for a project.

Project purchase order

 

  • A project purchase order is created directly on the project (Item task > Purchase Order).
  • The purchase order has the Project-Id in the header and on each line.
  • Something one should be aware of, is that goods NEVER enter inventory for a project purchase order. As consequence they cannot be added into a shipment for example.
  • Items are consumed (and hence become visible as project transaction and cost on the project) upon posting the invoice on the purchase order.

Purchase order derived from a project sales order

 

  • Creating such a purchase order is done from a project sales order.
  • The purchase order has the Project-Id in the header and on each line.
  • Items enter inventory upon posting the Product Receipt. Items are reserved though against the project sales order.
  • Items are consumed (and hence become visible as project transaction and cost on the project) upon invoicing the items to the customer (and not upon posting the purchase order invoice).

Purchase order derived from a project item requirement

 

  • Creating such a purchase order is done from a project item requirement.
  • The purchase order has the Project-Id in the header and on each line.
  • Items enter inventory upon posting the Product Receipt. Items are reserved though against the project item requirement.
  • Items are consumed (and hence become visible as project transaction and cost on the project) upon posting the packing slip for the project item requirement (and not upon posting the purchase order invoice).

Purchase orders created through MRP run

A fourth, not mentioned case in the TechNet article, is when purchase orders are created based on planned purchase orders.

Such purchase orders are NEVER project purchase orders.

They could be derived from a project sales order or project item requirement though to cover the requirements. There are though some slight differences with the purchase orders created in a manual way, being:

  • There will be no Project-Id in the header or on the purchase order lines if the purchase order is created based upon a planned purchase order.
  • Items are not reserved automatically: it depends upon how you executed the firming of the planned purchase order: if you choose to mark, then reservation will be the same as in the cases described above, else it won’t be reserved.

Comments 3 comments
Bose said...

I really thank you for the link to technet, this answered every question i was looking for!@bose
Purchase Order Letter Template

Unknown said...

Great thoughts you got there, believe I may possibly try just some of it throughout my daily life.






Project Management Training

Proquotient said...

Thank you for sharing this article , it explains purchase orders really well which is very important for people in the field of project management.

Patrik Luca, Ieper, BELGIUM
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