Exercise- Process a purchase order-initiated intercompany chain

  • 8 minutes

Scenario

You're the purchasing assistant in USRT, and you must purchase 10 units of the new item D0001 from the production plant USMF. You start the intercompany chain with a purchase order for a quantity of 10 units of D0001 from USMF.

In this exercise, you perform updates in USRT and the vendor company USMF until the intercompany purchase order is invoice-updated. The purchase order-initiated intercompany chain is also known as the two-legged chain.

Create the intercompany purchase order in USRT

To create the intercompany purchase order in USRT, follow these steps:

  1. Start in company USRT and go to Accounts Payable > Purchase orders > All purchase orders.

  2. Select New on the Action Pane to create a new purchase order.

  3. Select Vendor 9001 in the Vendor account field.

  4. On the General FastTab, select Central in the Site field.

  5. Select Chicago in the Warehouse field.

  6. Verify that the Intercompany option is set to Yes.

  7. Select OK.

    Note

    You might get a message that an intercompany sales order has been created.

    The system generates the purchase order, and the Purchase order page should open.

  8. On the Purchase order lines FastTab, add item number T0004 and add the color of Silver in the first line.

  9. Verify the following information on the line:

    • Site - Central

    • Warehouse - Chicago

  10. In the Quantity field, enter 10. Notice that Unit price is set to the default price of 160.00.

  11. Select Save on the Action Pane.

    Note

    If an error occurs indicating that the ship date is invalid, you can ignore it. The PO is confirmed.

  12. Select the Purchase tab on the Action Pane.

  13. In the Actions group, select Confirm to confirm the purchase order.

  14. Close the purchase order.

Verify the intercompany sales order in USMF

To verify the intercompany sales order in USMF, follow these steps:

  1. In USMF, go to Sales and marketing > Sales orders > Intercompany orders.

  2. Verify that the new intercompany sales order was created. The prefix of the sales order number is usrt.

  3. Select the new intercompany sales order.

  4. Double-click the intercompany sales order.

  5. The Unit price might reflect the normal sales price for the item. Change it to 160.00.

Remove credit blocking - prerequisite step

Removing credit blocking is a prerequisite step. To do so, follow these steps:

  1. Go to Credit and collections > Setup > Credit and collections parameters.

  2. Select the Credit tab, and then select the Credit management checkpoint FastTab.

  3. Remove the check mark on Confirmation, Picking list, and Packing slip in the Posting column.

  4. Select Save on the Action Pane.

  5. Close the page.

Generate picking lists, packing slips, and product receipts

You're the purchasing assistant in USRT and you purchase 10 units of item T0004, Silver from the production plant (USMF).

You start the intercompany chain with a purchase order for a quantity of 10 units of T0004, Silver from USMF.

Generate the packing slip and product receipt associated with this purchase order

Your first step is to generate the packing slip and product receipt that are associated with this purchase order:

  1. In USMF, go to Sales and marketing > Sales orders > Intercompany orders.

  2. Select and access the intercompany sales order to generate the packing slip.

  3. Select the Pick and pack tab on the Action Pane, under the GENERATE group, and then select Generate picking list.

  4. On the Posting picking list page, verify that All is selected in the Quantity field.

  5. Select OK.

  6. When the system prompts you, select OK to post the document without printing it.

  7. On the Pick and pack tab on the Action Pane, select Picking list registration.

  8. On the Action Pane, select Updates > Update all.

  9. Close the page.

  10. On the Sales order page, on the Pick and pack tab of the Action Pane, under the GENERATE group, select Post packing slip.

  11. On the Packing slip posting page under PARAMETER, verify that All is selected in the Quantity field.

  12. Select OK.

  13. If the system prompts you, select OK to post the document without printing it.

  14. On the INTERCOMPANY ORDERS page, verify that the sales order status is Delivered.

Generate a product receipt

To complete these steps, ensure that you're working in the USRT company.

  1. In USRT, go to Procurement and sourcing > Purchase orders > All purchase orders.

  2. Select the intercompany purchase order to generate the product receipt. Ensure that you select the order that you've been working with for this exercise.

  3. On the Receive tab of the Action Pane, under the GENERATE group, select Product receipt.

  4. On the Posting product receipt page, under PARAMETERS, verify that Ordered quantity is selected in the Quantity field.

  5. Select OK in the lower part of the page.

  6. On the Purchase order page, verify that the purchase order status is Received.

Generate invoices

Now, you need to generate the sales order invoice in USMF and then post the purchase order invoice in USRT that's associated with this intercompany sales order.

Generate the sales order invoice in USMF

Ensure that you're working in the USMF company to complete these steps correctly.

  1. Go to Sales and marketing > Sales orders > Intercompany orders.

  2. Select the intercompany sales order to generate the invoice.

  3. On the INTERCOMPANY ORDERS page, select the INVOICE tab. Under the GENERATE group, select Invoice.

  4. On the Posting invoice page, under PARAMETER, verify that Packing slip is selected in the Quantity field.

  5. Verify information on the Lines FastTab and then select the OK option.

  6. When the system prompts you, select OK to post the document without printing it.

  7. On the INTERCOMPANY ORDERS page, verify that the sales order status is Invoiced.

Post the purchase order invoice in USRT

Ensure that you're working in company USRT to compete these steps.

  1. Go to Procurement and sourcing > Purchase orders > All purchase orders.

  2. Select the intercompany purchase order to generate the invoice.

  3. On the INVOICE tab of the Action Pane, under the GENERATE group, select Invoice.

  4. From the Action Pane, select the Match product receipts option to match the product receipts to the invoice.

  5. On the Match product receipts to invoice page, select OK in the lower part of the screen.

  6. On the Action Pane, select Update match status.

  7. Select Post on the Action Pane. The invoice should post.

    Note

    You might receive an error stating that the invoice amount should be another amount (due to sales tax). If so, note the amount, return to the invoice, and then change the amount.

  8. On the ALL PURCHASE ORDERS page, verify that the purchase order status is Invoiced.