Create a purchase agreement

This article guides you through the creation of a purchase agreement. This would typically be done by a purchasing manager. You can use this procedure in demo data company USMF or on your own data. You need to have set up purchase agreement classifications before you start. Once you've created an agreement you can use it when you create a PO, and this will copy the purchase agreement conditions to the header and to any lines in the order that are affected by the agreement.

Create a new purchase agreement

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

  2. Click 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 will be the default for all commitment lines and will determine 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, you need to change the default commitment on the header. There are 4 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 can be fulfilled by any product or by any procurement category.
  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 is the total quantity that you have agreed 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 that's 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 are shown 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 allows you to generate a document for the purchase agreement which you can then print or send to the vendor. If you update the agreement later on and re-confirm it, both versions will be shown here.
  6. Close the page.