Create a purchase agreement

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This article shows you how to create a purchase agreement. Typically, a purchasing manager completes this procedure. Set up purchase agreement classifications before you start. After you create an agreement, use it when you create a purchase order. This action copies the purchase agreement conditions to the header and to any lines in the order that the agreement affects.

Create a new purchase agreement

1. Go to Procurement and sourcing > Purchase agreements > Purchase agreements.

2. Select New.

3. In the Vendor account field, select the drop-down menu and select the row of the desired record.

4. In the Purchase agreement classification field, select the drop-down menu and select the row of the desired record.

5. Expand the General FastTab.

6. In the Expiration date field, enter a date. This expiration date is the default for all commitment lines and determines how long each specific commitment is valid.

7. In the Document title field, type a name for your purchase agreement.

   • Leave the Default commitment field set to Product quantity commitment (or change it if it's not set to this).
   • The default commitment value determines your options on the agreement lines. If you need a new commitment type when you're creating the agreement lines, change the default commitment on the header. There are four types of commitments:
     • Product quantity commitment – for a specific quantity of a product.
     • Product value commitment – for a specific currency amount of a product.
     • Product category value commitment – for a specific currency amount in a procurement category where the amount can be for a catalog item or a non-catalog item.
     • Value commitment – for a specific currency amount which any product or any procurement category can fulfill.

8. Select OK.

Add a commitment

1. Select Add line.
2. In the Item number field, select the desired record from the drop-down menu.
3. In the Quantity field, enter a number. This number is the total quantity that you agree to buy from your vendor.
4. In the Unit price field, enter a number.
5. Expand the Line details section.
6. Set the Max is enforced option to Yes. The Max is enforced option limits the use of the commitment. You can only purchase up to the quantity specified in the Quantity field for the line.

Add header conditions

1. On the Action Pane, select Options.
2. Select Change view.
3. Select Header view.
4. Expand the Terms section.
5. In the Method of payment field, select the desired record in the drop-down menu. The payment terms from the vendor account appear here by default.
6. In the Mode of delivery field, select the desired record in the drop-down menu.
7. In the Delivery terms field, select the drop-down button to open the lookup.

Confirm and activate the agreement

1. On the Action Pane, select Purchase agreement.
2. Select Confirmation. Set the Mark agreement as effective option to Yes.
3. Select OK.
4. On the Action Pane, select Purchase agreement.
5. Select Purchase agreement confirmations. The Preview/Print option generates a document for the purchase agreement that you can print or send to the vendor. If you update the agreement later and reconfirm it, both versions appear here.
6. Close the page.