In Business Central, users can use the Create Purchase Orders action on a sales order to create a means of reaching the demand. This is an alternative to using order promising functionality or MRP. In this post, we will cover how to use this functionality as well as its advantages and disadvantages. We’ll provide source material for other related topics along the way.
How to perform the Create Purchase Order action
On the sales order, click ‘More Options’, ‘Actions’, ‘Functions’, ‘Create Purchase Document’, ‘Create Purchase Orders’.
For one item, notice there’s a Quantity to Purchas value matching the one in the Sales Order Quantity field. This reflects the need to purchase the stock to meet the sales order demand.
Obviously the main benefit of this is you can create a corresponding purchase order to the sales order. It also helps you identify whether you have the item in stock. This is because the system will only populate the Quantity to Purchase with a value above zero if there’s not the stock levels available to meet the demand.
If you have stock available for the item you are selling, Business central will not suggest replenishment. See below:
Does ‘Lead Time Calculation’ affect purchases orders created from sales orders?
With the Create Purchase Orders action, it will populate lines from which you can create purchase orders. It bears resemblance to the Requisition Worksheet. But does it work in the same way regarding planning? To test this, I set up a vendor with a two day lead time.
After performing the Create Purchase Orders action on a sales order, the 2D Lead Time Calculation value set against the vendor carries through to the lines. I can amend this value freely as it acts only as the default.
If I click ‘Ok’ and essentially accept the planning suggestion, the system creates a purchase order. Notice the order applies the lead time I incorporated on the vendor’s setup:
Accommodating multiple vendors
On a sales order, where you’re selling multiple items, it’s likely that the stock comes from multiple sources. In the context of purchase orders, you might require multiple purchase orders, each to different vendors with different lead times. Fortunately the Create Purchase Orders action accommodates this.
In the example below, I have setup the items to have different default Vendor No. values.:
When I click ‘ok’, I am taken to the Purchase Orders page where I can see two records, one for each line.
For reference, if the items have the same Vendor No. value, it will not make separate purchase orders. It will batch them into one order.
The Create Purchase Orders action only relates to the sales order in question. This means it only looks to bring in the stock being sold, nothing more. As it’s only concerned with the sales order in question, it ignores any predefined reordering policies against the items.
We covered the different item replenishment systems in a previous post. In my next example, I’ll use Maximum Qty. which looks to replenish stock back up to a set amount when stock falls below a specific level.
For item ‘X’, I set a Reordering Policy of Maximum Qty. with a Maximum Order Quantity of 10. However in spite of this, when performing the Create Purchase Orders action, the suggested Quantity to Purchase is zero.
When using an item without any available stock, the system still suggest a replenishment matching the sales order quantity. See my setup for this example below:
Here’s the result:
Make sure your item is set up correctly
The Create Purchase Orders action isn’t applicable for every potential setup you have for items. Let’s look at another critical field.
The Replenishment System field
On an item card, you can set the Replenishment System value:
To utilise the Create Purchase Order functionality, you must set this to Purchase. Otherwise, the system will not return any results:
This means for items you typically assemble or manufacture and have set them up accordingly, you won’t be able to use this functionality for one-off occasions. Instead you’ll have to create a purchase order manually.
Does ‘Create Purchase Orders’ factor in incoming stock?
The Create Purchase Orders function on a sales order doesn’t factor in incoming stock. Available and capable-to-promise are concepts which Business Central handles, but not here. I tested this by creating purchase orders for items without stock currently available, to see if the system picked up that it could satisfy the demand once the stock arrives. However, by making an inbound order of Item 1145 with a quantity of five and a subsequent sales order quantity of two, the Create Purchase Orders action suggested replenishing the amount on the sales order, instead of utilising the stock that would be arriving shortly.
Does ‘Create Purchase Orders’ accommodate drop shipments and special orders?
Special orders functionality grants users the ability to link purchase and sales orders together, much like the Create Purchase Order function does. The reason the link is important for special orders is because they are designed to accommodate specific catalogue items the customer has requested. After you receive the goods, you ship them onto the customer.
On a sales order, if you try to carry out the Create Purchase Orders action after setting the sales order as either a drop shipment or special order, you’ll see this screen:
The reason this doesn’t work for drop shipments and special orders is because you are associating the inbound orders with the outbound orders. So it doesn’t make sense to look at what stock you already have for the item(s). Stock from a drop shipment will never reach your warehouse as it goes direct to the customer. This means assessing what stock you have available would be a redundant exercise. For special orders, whilst the stock does reach your warehouse, you are only using the purchased goods to meet the sales demand. So again, it doesn’t matter beforehand whether you have the items in stock or not.
Thanks for reading. The Create Purchase Orders from sales order in Business Central functionality offers an alternative way to manage stock, something which may be of use in particular situations for you. As we’ve discussed, it offers benefits in that it doesn’t require you to leave the sales order, follows vendor lead time setup and accommodates multiple purchase orders. It’s limited by the fact it doesn’t follow planning parameters, doesn’t account for incoming stock and requires you to have the items in question set with a Replenishment System of Purchase. But for all these shortcomings, Business Central offers alternatives such as using MRP instead.
I’ve attached Microsoft’s documentation on the topic, which acts more as a condensed set of instructions.
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