Special Purchasing Topics

This section discusses issues related to purchasing in a multiple database environment, processing memo items, and special purchase needs.

Often in multisite companies, inventory items are purchased from one site only, although each site buys its own non-inventory items, such as supplies, floor stock, and expensed items. Purchasing initiated from multiple sites or databases is supported.

Example: Site Singapore creates a requisition for an item, specifying that the item be bought by Site Chicago because of price considerations. Because Singapore specifies Chicago in the PO Site field of Purchase Requisition Maintenance (5.1.4), Chicago sees the requisition when reviewing its requisition reports. Chicago creates a purchase order, taking information from the requisition and specifying that the item be delivered to Singapore. Receiver and supplier invoice information is processed at Chicago. MRP information is processed at Singapore.

When generating reports in a multi-database environment, if the current database is not the originating database for a particular PO, that PO does not appear on the PO reports (by order, by supplier, commitment, or supply schedule). This happens even if line items on the PO are received into sites at the current database. To see these POs, switch to the originating database, which also contains the supplier address table.

Memo purchases are for items not in the item master, such as office supplies and equipment. Memo items do not update inventory. Rather, they are expensed or capitalized upon receipt, depending on the purchases account for the line item. Memo items have no effect on MRP.

See Type for details.

Note: To process an inventory item as a memo item, you can change the Type field from blank to M in PO Maintenance. However, if you always want an item defined in Item Master Maintenance to be treated as a memo item, you can specify the appropriate value in the Memo Order Type field, which sets the default for purchasing activities.

Even if an item is not defined as a memo item, it may be preferable in some cases to process it as a memo purchase. Such cases might include procurement of as-needed production materials and inventory items for non-production departments. Production materials, such as adhesives and solvents, are used as needed, and it is often impractical to maintain inventory balances and to process transactions for such materials.

Inventory items are items ordered for a non-production department, such as engineering or marketing. If these are handled as memo purchases, they can be charged to these departments upon receipt. Another way of transferring materials to non-production departments is by unplanned inventory issues.

Purchases for items not directly related to manufacturing or inventory and not delivered to a receiving department, such as airline tickets or seminar fees, are sometimes easier to handle with external purchase orders—that is, purchase orders outside the system. This is because when invoices are matched in Accounts Payable, the system lets you verify a purchase by matching an order, a receiver, and an invoice. Items that have not been delivered to a receiving department have no associated receivers. To have each purchase accounted for in a purchase order, use manual purchase orders for items not delivered to a receiving department.