Summary

Contract purchase order line items are line items with a cap amount. As you invoice portions of the contract amount, the system will track the invoiced amount in relation to the contract amount. When the entire contract amount has been invoiced, the contract purchase order line item will close. If that is the only line item on the purchase order, the purchase order will also close.

The information in this document also applies to contract purchase order line items created using the Change Orders process (PO> Change Orders). The Change Orders process is used to modify purchase orders that have already been committed in a Purchase Orders batch.

Step by Step

1     Create a Purchase Orders batch and create a PO.

2     Create a contract purchase order line item.

• Click ADD in the Line Items data grid on the New/Edit Purchase Order window. This will open the Line Item section to the right.
• Not all of the fields on the PO Line Item window are required. Only the GL Account (to record the encumbrance) and the Unit Price fields (to calculate the base amount of the invoice) are required on contract PO line items.
• The Tab Order button   at the top of the window is used to adjust the tab order of the Purchase Order Line Item window.
• The Line Type drop-down menu is used to select the type of line item you would like to create. Select Contract to create a contract line item.
  • This will disable the Inventory Item, Inventory Location, Product Code, Unit Quantity and Unit Type fields since you cannot attach unit information to a contract PO line item.
  • If the All purchase order line items default to contract toggle is checked on the Setup window (PO> Utilities> Setup), the Line Type drop-down menu will default to Contract.
• The Date field is used to enter the date on the purchase order line item. This field will populate with the current date.
  • The purchase order line item date is not the same as the date on the purchase order.
• The Inventory Item and Location fields will not be active when creating a contract line item.
• The Commodity Code field can be used to associate the line item with a commodity code.
  • Commodity codes are created and maintained on the Commodity Code Maintenance window (AP> Maintenance> Commodity Code).
• The Account Alias field is used to add a GL account to the PO line item using a GL account alias. For example, if you have a GL account set up with the alias "EXP1", enter EXP1 in the Account Alias field and the GL account number will populate in the Account field.
  • Account aliases are attached GL accounts using the Chart of Accounts Maintenance window (GL> Maintenance> Chart of Accounts> General tab> Alias field).
• The Account field is used to enter the GL account that will be debited when the PO is invoiced in the AP> Invoice process.
  • The Account field will populate if there is a GL account attached to the AP vendor on the purchase order (AP> Maintenance> Vendor> Details tab> GL Account Number field). You can change the GL account if it does not apply.
  • The Remaining Budget field will populate with the budget amount remaining on the GL account selected in the Account field.
  • The Account field is not required, and will be disabled, if you assign distribution accounts in the Distributions section below.
  • The Account Description field will populate with the description attached to the selected account.
• The Status drop-down menu is used to select the status of the purchase order contract line item.
  • The status of the purchase order line item will change to Closed when the purchase order line item has been invoiced.
• The Description field is used to enter a description of the purchase order line item. The description entered in this field will display on the Purchase Order Proof List Report (PO> Purchase Orders> Proof List).
  • This field will automatically populate if the vendor attached to the purchase order has a description specified on the Vendor Maintenance window (AP> Maintenance> Vendor> Details tab).
• The Expected Date field is used to enter the required delivery date of the line items on the purchase order. The date entered in this field will display in the Required Delivery Date field on the printed version of the purchase order.
• The Unit Price field is used to enter the total contract amount. When this amount has been invoiced, the purchase order line item will close.
  • When you enter the contract amount, the Remaining Budget field will populate with the budgeted amount less the contract amount.
  • If you need to modify the contract amount after portions of the purchase order have already been invoiced, you can do so by opening the PO contract line item and changing this amount in the Change Orders process (PO> Change Orders).
• The Tax field is enabled when the Taxable toggle is checked. If there is a tax rate attached to the PO (Tax Rate field at the top of the screen), the Tax field will populate with the tax amount (tax rate X base amount).
  • Tax is not calculated on shipping and handling charges.
• The Shipping/Handling field is used to add shipping and handling charges to the contract line item.
• The Task and Type fields are used to attach PM module information to the purchase order. If you attach a task to the PO, you must also attach a type code.
• The Task field is used to attach a PM module task code to the purchase order line item. When the purchase order is attached to an AP module invoice (AP> Invoices> Invoices), and that invoice is committed (AP> Invoices> Commit), a PM module transaction will be created on the task.
  • PM module task codes are created and maintained using the Task Maintenance window (PM> Maintenance> Task).
• The Type field is used to attach a PM module type code to the PM module line item. If you attach a task to the PO, you must also attach a type code.
  • PM module type codes are created and maintained using the Type Maintenance window (PM> Maintenance> Type).
• The Reference Number field is used to enter a work order reference number.
  • This field will only be enabled if the Require unique reference number toggle is checked on the WO Setup window (WO> Utilities> Setup).
    • Unique reference numbers can help Springbrook users easily attach work orders to Purchase Order line items without having to remember specific work order numbers or use the work order selection window.
  • If this toggle is not checked the Reference Number field will not be enabled. If a reference number is attached to the work order selected below, that reference number will automatically populate.
• The WO Number field is used to attach a work order to the PO line item.
  • By attaching a work order to the line item, and then processing the purchase order through a PO Receiving batch, you can bill the specified work order for the items ordered in the purchase order.
  • Work orders are created and maintained on the Work Order Maintenance window (WO> Work Orders> Work Orders).
• The Activity Type field is used to attach an activity type to the PO line item.
  • Activity types are used to limit the activities that can be attached to a work order or estimate. Only the activity types associated with the selected work order will be available when you click the field label.
  • Activity Types are created and maintained on the Activity Type Maintenance window (WO> Maintenance> Activity Type).
• The Quantity Received, Quantity to be Received, Quantity to be Invoiced, and Amount to be Invoiced fields will automatically update with the details entered above.
• The Remaining Budget field displays the budget amount less the total amount on the invoice line item plus the total amount of committed and uncommitted POs. The budget amount is the current budget of the GL account selected in the Account field. This is the budget of the same fiscal year selected in the Settings step of the Purchase Orders process.
  • You can view the current budget amount of a GL account using the Chart of Accounts maintenance window (GL> Maintenance> Chart of Accounts> Balance tab> Budget field).
• The Taxable toggle is used to enable the Tax field so that you can enter a tax amount on the PO line item.
• The Fixed Asset toggle is used to create a Fixed Asset module fixed asset from the purchase order line item.
• The Allow Over Receiving toggle is used to allow the system to receive a value greater than that specified on the purchase order.
  • This toggle will be automatically checked if the Purchase Orders module is set up to automatically over receive (PO> Utilities> Setup> Purchase Orders tab> All line items default to allow over receiving toggle).
• The Encumbered toggle is used to encumber individual PO line items.
  • Encumbered amounts will display on the Balance tab of the Chart of Accounts Maintenance window.
  • Negative line item amounts will also be encumbered if the Purchase Orders module is set up to encumber negative amounts (PO> Utilities> Setup> Purchase Orders tab> Negative line items affect encumbrance toggle).
• Continue to the next step to set up distribution accounts.

3     Specify the distribution accounts for the contract line item. This is an optional step.

• Click the Distributions button to open the Distributions screen.
• The Distributions screen is used to distribute a purchase order amount over multiple GL accounts. Each distribution account will create a separate line item on the purchase order. Each contract line item will be tracked through the invoicing process and will be closed only after the entire line item amount has been invoiced.
• Click ADD to add a distribution line item to the purchase order contract line item.
  • Enter a distribution percentage in the Percentage column. You can specify multiple distribution accounts for the contract line item, but the total distribution percentage must add up to 100%.
  • Click the Account Number column search button to select a GL account to assign to the distribution line.
  • Repeat this process to assign a Task Code and Type Code to the distribution line if desired.
  • Click the Save button to add the distributions to the contract line item and close the Distributions screen.
• After returning to the New/Edit Purchase Order screen, click CREATE ITEM to complete the current line item and clear the line item fields in order to quickly begin entering new line item details.
• Click the Save button when all the line items have been added to the purchase order. This will close the New/Edit Purchase Order screen and return you to the Purchase Orders step.

4     Invoice a contract amount.

• When invoicing a contract amount (AP> Invoices), the outstanding amount of the contract purchase order line item will display when you select the PO. This is the original contract amount less any amounts that have already been invoiced.
• The invoice line item will populate with the current outstanding amount on the contract purchase order. Modify this amount if you do not want to invoice the remaining total.
• If you invoice the remaining total, the contract purchase order line item will close.