38.6 Inventory Master

The Purchase Order system is completely integrated with the Inventory Control system. Before an inventory product can be ordered, it must be entered into the inventory master file. Most likely you have already entered your inventory products through the Inventory Control system. If this is the case, there are some fields used specifically with the Purchase Order system, that you should check. These fields are: Reorder Point, Order Quantity, and Location Code. The automated inventory restocking processes use these fields in creating purchase orders.

If you do not want a product to be included in the automated inventory restocking processes, leave the Reorder Point field blank, or enter a zero. The data in the Location Code field tells the automated inventory restocking processes where the warehouse for the product is located. If the Location Code field is left blank, the automated inventory restocking processes assume that the product is to be delivered to the company address entered through in the Company Receiving Address screen.

The following example was entered through the Inventory Products selection on the Select, Inventory menu.


When a purchase order is received, inventory is debited or increased by the amount of the shipment. The account entered into the Future Payable field on the purchase order screen is credited for the amount of the shipment. This account is debited for the amount of the shipment when a voucher is entered for the order.

In the screen above, the Reorder Point field has a value of 20, and the Order Quantity field has a value of 5. The automated inventory restocking process uses these fields, along with the Qty on Hand (26), Outstanding Orders (5), and Qty Committed (1) fields, to determine if a product should be reordered. It does this by first subtacting the values of the Outstanding Orders and Qty Committed fields from the value in the Qty on Hand field (26 - (5 + 1) = 20). If this value is less than or equal to the Reorder Point value, the product needs to be restocked.

When restocking a product, the automated processes order enough sets of Order Quantity to bring the product stock level above the Reorder Point. Before making a purchase order for a product, any outstanding purchase order amounts are subtracted from the calculated quantity. This value, if greater than zero, becomes the order quantity for the new purchase order.