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Purchase Order Analysis

Discussion in 'Oracle SCM & Manufacturing' started by lesterkenou, Jul 30, 2009.

  1. lesterkenou

    lesterkenou Active Member

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    Good day fellas!!

    I had been closely monitoring Purchase Orders of my company as I was assign to do it so.

    As per my monitoring there are alot of POs that are left hanging in the Status of open, close for receiving and close for invoice.

    It's a little vague for me what are the conditions or closing points of POs in these statuses because some fully billed POs are still has close for invoice status or POs with fully received items are still on close for receiving or even considered as open by the system.


    I got a ton of PO waiting to be analyzed and I am tasked to point out suggested actions to bestow on these kinds of POs.

    Can anyone enlighten me on this matter?


    Hope to here from you guys.

    Thanks!
     
  2. appsmylove

    appsmylove Active Member

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    Here is how it works.
    Let us look at the control points/ options first.

    In Purchasing Options >> Control tab there is one option called "Receipt Close Point". This determines when the PO shipment is closed for receiving by the system: Accepted (passed inspection), Delivered, or Received. This works along with another option Receipt Close tolerance percentage mentioned below.

    In Purchasing Options >> Defaults tab there are 2 options
    a) Receipt Close tolerance percentage for PO shipments. Purchasing automatically closes a shipment for receiving if it is within the receiving close tolerance at the receiving close point. e.g. if the Receipt Close Tolerance is set at 3% and you receive 98% of an expected shipment, Purchasing automatically closes this shipment for receiving. For such shipments the closure status will be 'Closed for Receiving' unless it is already closed for invoice.

    b) Invoice Close tolerance percentage for PO shipments. Purchasing automatically closes a shipment for invoicing if it is within the invoicing close tolerance at billing, when Payables matches invoices to purchase orders or receipts. Going by above example if the Invoice Close Tolerance is set at 3% and you already billed 98%, then Purchasing will automatically close the shipment for receiving at Receipt Close Point.

    Check the screen shots for reference.

    Both these options are also available at PO shipment (More tab) and Item (Purchasing tab). The value specified at the PO shipment level (defaulted from Purchasing Option or Item level, can be overitten) will decide the rule.

    With above mentioned control options in place Purchasing automatically closes shipments for receiving and invoicing after reaching the specified control points. Once all shipments for a given line are closed (Closed for Receiving AND Closed for Invoicing), Purchasing automatically closes the line. When all lines for a given header are closed, Purchasing automatically closes the document.

    Now going back to your examples. Please check the individual shipments first for all lines. Check whether those have reached the closure points for both receipt and invoice. Once you ensure that individual shipments are closed then system will tare care of the rest automatically.
    If you have fully billed shipments then check
    - whether you have quantity yet to be received because of which shipments are not closed yet or any discrepancy there
    - PO Shipment closure status (Status tab)

    Similarly for fully received items check whether the shipments have reached the invoice close tolerance etc.

    Hope this helps.
     

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  3. lesterkenou

    lesterkenou Active Member

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    indeed, appsmylove, your input is very much appreciated.

    Thank you! :hurray
     
  4. appsmylove

    appsmylove Active Member

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    You are welcome.