The first step in the purchasing process is to enter the purchase orders into the system. The Purchase Order system provides an automated process for creating purchase orders for restocking inventory. The restocking process determines the products that need to be reordered and the quantity to order. It searches the vendor price file to find the best price for the required reorder quantity for each product.
The restocking process extracts information from the master files to create the purchase orders. Therefore, it is essential that the set up procedure, as described in Chapter 38, Purchase Order Setup be done before running these processes. You may have set up the vendor master file and the inventory master file in other modules. Some of the fields in these two files are used specifically in the Purchase Order system. Be sure that data is entered for the Bank, Discount Account, Payment Terms, and Future Payable fields in the vendor master file. The inventory master file must have data entered into the Reorder and Order Qty fields. If your company receives inventory at more than one location, the location code for a product is entered into the inventory master in the Location Code field.