Define Purchase Order Workflow
Purchase orders are used to order items from your vendors or supplies, collecting on-order units and providing your team with a record to receive against.
It is important to first understand the different stock levels and order statuses before diving into the details of creating a purchase order.
List Screen Overview
The list screen is filtered by your open orders, draft and committed order statuses, by default. This screen is your master purchase order database listing your purchase orders using the filters displayed on the list screen.
Please keep in mind you can edit this screen, adding or removing columns to fit your business needs with your purchase order screen view.
The stock flow is triggered by a committed stock transaction or shipment. Once an order is received or shipped then the units will be added or decremented from your on-hand inventory levels. Until the stock transaction is triggered, Finale has other stock identifying columns to help users track and manage their inventory.
- On-Hand Units - Quantity on-hand is the true physical stock level of an item in your warehouse or storage sublocation.
- On-Order Units - Quantity on committed Purchase orders to suppliers that haven’t been received yet.
- Reservation Units - These units are a result of committed sales orders
- Remaining Units - Calculated: Qoh - Reservations - This is the true remaining units available to sell right now.
- Available Units - Calculated: Qoh - Reservations + On-Order Units - All units available to promise to a potential sale. May contain units not shippable now because they are On Order and have not been received yet.
- Draft - The draft status is the editable state of an order. If you need to make changes or adjustments then you will need the order to be in the draft state. Consequently, any order in the draft status has no impact on stock levels unless it has already been received.
- Committed - The committed status signals Finale that the order has been placed. Any item listed on a committed purchase order will hold on-order units. These units will not be added to your on-hand units until the units are received with a shipment.
- Completed - The completed status is used by users to signal that the order requires no more further action. This is a manual process on the purchase order side of the equation. If you still have units to receive on a completed order, the on-order units will be removed and no longer seen by the user on the stock screen.
- Canceled - Once an order is marked canceled, every part of the purchase order is canceled. Any shipment or bill attached to the purchase order would also be canceled. Any transaction built from the order is canceled and removed from default views.
Purchase Order Functionality
Create the PO
If you take the initiative to link your supplier information to your products, then Finale will link this information automatically as you move through the purchase order screen. For example, if you enter your supplier on the purchase order, then Finale will populate your supplier price level for the products that are entered.
Please look into Finale’s reorder system for more information on how to help automate this process further.
On the right hand of the purchase order screen, Finale will navigate the user through each of the purchase order features. The top right corner, for example, demonstrates the different statuses: order status, shipment status, and bill status. There is also tabs at the top of the purchase order screen above the primary information to help navigate users from the different screens, as well—purchase view, products view, shipment view, and bill view.
Like already stated in the stock overview section, you can only edit purchase orders in the draft status. Once your purchase order is committed, Finale records the ordered units as on-order units. No cost will be assigned from the purchase order until the shipment is received.
Landed Cost & Adjustments
As already stated, Finale uses an average weighted landed cost to determine your valuation. This is a calculated cost defined by your purchase orders and assigned automatically on the shipment. The purchase order screen is your master cost center, regardless of a bill or financial document. The cost that will be used in Finale’s calculation is the landed cost per unit field.
Your primary cost is attributed to the price per unit that you are paying for each item on your order. The landed cost functionality takes into account your adjustments (if you choose), like shipping or freight costs. These adjustment costs can be rolled back across your inventory as a part of the inventory asset, assigning the true landed cost per unit to receive your items into inventory. The adjustment setting configurations can be found in the purchasing section of your application settings. Once these adjustments are configured you can then add them to your purchase order screen.
The shipment mechanism on a purchase order is how stock is received into inventory. This can be performed on the barcode scanner or in the web-based application. Each product will need to be received to a sublocation when the shipment is entered.
Users can use as many shipments as necessary in order to receive your on-order units. Finale also possesses receipt statuses to know if an order is partially received, fully received, or received with exception (receive units > ordered units). This is a great tool to keep you organized and on-task to move orders to complete when necessary.
The bill is designed to be the financial piece of the equation when creating and managing purchase orders. The bill has no impact on stock levels or costing. This feature is meant solely as a financial record that produces the alternate transaction in the purchase clearing account opposite the shipment receipt.
When you generate the bill on a purchase order, Finale will copy the purchase order screen to your bill by default. This can be edited as long as you move the bill to a draft status. Another great feature is the ability to generate a bill per shipment for the quantity being received on that specific shipment. This can be done with the action menu from the shipment screen.
Most users that integrate their Finale account with QuickBooks Online take advantage of this feature as these bills will sync directly into your QuickBooks Online account for you to pay your supplier or vendor from there. Finale does not process payments.
If you are NOT syncing your Finale account with your QuickBooks Online account, then this feature is probably NOT something you will use unless you can find an alternate benefit in your workflow.
Users can use as many bills as needed for a particular purchase order, easily adjusting the supplier to represent each vendor or supplier in the process. Please keep in mind that if you are syncing your bills to QuickBooks Online, then you do NOT want to post your payments in Finale. Instead, you want to handle your payment processing on QuickBooks and allow the payments to flow back to Finale automatically.