Purchases for Sale: Process Activity

In this activity, you will learn how to process a purchase of items that are not in stock for a particular sales order, and how to process the sales order to completion after receipt of the items that were purchased for sale.

Story

Suppose that the GoodFood One Restaurant customer has ordered tropical fruits (15 pounds of papayas and 10 pounds of lychees) on SweetLife's website. SweetLife's warehouses do not have the appropriate conditions for keeping delicate tropical fruits; also, these fruits are ordered rarely and in small quantities. To provide fresh and high-quality fruits to the customers, the sales manager purchases these tropical fruits on demand from the All Fruits Mall company, and once the fruits are delivered to the retail warehouse of the SweetLife store, they are immediately shipped to the customer that ordered them.

Acting as sales manager Regina Wiley, you need to process the sales order and the related purchase order in the system.

Configuration Overview

In the U100 dataset, for the purposes of this activity, the following tasks have been performed:

• On the Enable/Disable Features (CS100000) form, the following features have been enabled:
  • Inventory and Order Management, which provides the standard functionality of inventory and order management
  • Inventory, which gives you the ability to maintain stock items by using forms related to the inventory functionality and to create and process sales and purchase documents that include stock items
  • Sales Order to Purchase Order Link, which provides the ability to link sales orders to existing purchase orders and receipts, and to create new purchase orders for existing sales orders
• On the Customers (AR303000) form, the GOODFOOD (GoodFood One Restaurant) customer has been created.
• On the Vendors (AP303000) form, the ALLFRUITS (All Fruits Mall) vendor has been created.
• On the Stock Items (IN202500) form, the PAPAYAS (Fresh papayas 1 lb) and LYCHEES (Fresh lychees 1 lb) stock items have been created. For each item, the ALLFRUITS vendor has been added on the Vendors tab.

Process Overview

In this activity, to process a sales order that includes stock items that must be purchased for sale, you will first create a sales order on the Sales Orders (SO301000) form and add all of the stock items that were ordered by the customer. Because the items are not in stock, you will mark them for purchasing in the sales order; to ship these lines, you have to receive the purchased items at the warehouse specified in the sales order lines.

When you mark items for purchasing, the system creates purchase requests of the SO to Purchase type. You will create purchase orders by mass-processing purchase requests of this type on the Create Purchase Orders (PO505000) form. Each purchase order generated from a purchase request or from multiple requests will be linked to the related sales order. When you receive the items of each linked purchase order to inventory, the items will be allocated directly to the related sales orders.

After all purchased items have been received to inventory, you will process the sales order to completion. That is, you will ship the items to the customer and prepare the invoice for the customer.

System Preparation

Before you start processing a sales order that includes stock items that must be purchased for sale, you should do the following:

1. Launch the MYOB Advanced website with the U100 dataset preloaded, and sign in as purchasing manager Regina Wiley by using the wiley username and the 123 password.
2. In the info area, in the upper-right corner of the top pane of the MYOB Advanced screen, make sure that the business date in your system is set to today’s date. For simplicity, in this activity, you will create and process all documents in the system on this business date.
3. On the Company and Branch Selection menu, in the top pane of the MYOB Advanced screen, select the SweetLife Store branch.

Step 1: Creating a Sales Order

To create the sales order for GoodFood One Restaurant, do the following:

1. On the Sales Orders (SO301000) form, create an order with the following settings:
   • Order Type: SO
   • Customer: GOODFOOD
   • Description: Website order #00782 (tropical fruits)
2. On the Details tab, add rows with the settings shown in the following table.

   Branch	Inventory ID	Warehouse	Quantity	Unit Price
   RETAIL	PAPAYAS	RETAIL	15	5.56
   RETAIL	LYCHEES	RETAIL	10	10.99

   Notice that the system displays warnings on the Details tab and in the Quantity column of both lines indicating that the specified quantity is not available in the selected warehouse.

3. On the form toolbar, click Save. The sales order is saved with the Open status.

Step 2: Marking the Stock Items to Be Purchased for Sale

To mark the stock items for purchase in the sales order, do the following:

1. While you are still viewing the order on the Sales Orders (SO301000) form, in the PAPAYAS line of the Details tab, select the Mark for PO check box, and make sure that Purchase to Order is selected in the PO Source column.
2. In the LYCHEES line, select the Mark for PO check box, and make sure that Purchase to Order is selected in the PO Source column.
3. On the form toolbar, click Save.

Step 3: Creating a Purchase Order That Is Linked to the Sales Order

To create a purchase order for the stock items that are marked for purchase, do the following:

1. While you are still viewing the sales order on the Sales Orders (SO301000) form, on the More menu, click Create Purchase Order.
2. On the Create Purchase Orders (PO505000) form, which opens, select the unlabeled check boxes in the two lines with SO to Purchase specified as the Plan Type. (The SO to Purchase plan type indicates that this line is a purchase request.)
3. In both of these lines, make sure that the stock items have the following settings:
   1. Vendor: ALLFRUITS
   2. Warehouse: RETAIL
4. On the form toolbar, click Process to process the purchase requests that you have selected.

   The system creates a purchase order for the ALLFRUITS vendor, and opens it on the Purchase Orders (PO301000) form.

5. In the Description box of the Summary area, type Purchase for website order #00782.
6. On the Details tab, click the PAPAYAS line, and on the table toolbar, click View SO Demand. The Demand dialog box, which opens, shows the sales order to which this purchase order line is linked.
7. Click Close to close the dialog box.
8. On the Details tab, do the following:
   • In the Unit Cost column of the PAPAYAS line, specify 5.
   • In the Unit Cost column of the LYCHEES line, specify 9.
9. On the form toolbar, click Remove Hold.

Step 4: Processing the Purchase Order

To process the purchase order to completion, do the following:

1. While you are still viewing the purchase order on the Purchase Orders (PO301000) form, click Enter PO Receipt on the form toolbar.
2. On the Purchase Receipts (PO302000) form, which opens, review the details of the prepared purchase receipt, and make sure that both purchase order lines have been added with the appropriate quantities.
3. In the Summary area, select the Create Bill check box to make the system generate the bill automatically on release of the purchase receipt.
4. On the form toolbar, click Release to release the purchase receipt.

   The system releases the purchase receipt, which is assigned the Released status.

5. On the Billing tab, review the only line in the table, which shows the generated bill, and make sure that the bill has the Open status, reflecting that it has been released.
6. On the Other tab, click the IN Ref. Nbr. link.
7. On the Receipts (IN301000) form, which opens in a pop-up window, review the generated inventory receipt. Make sure that the inventory receipt has the Released status.
8. Close the Receipts form.

Now the items are in stock in the RETAIL warehouse and can be shipped to the GoodFood One Restaurant customer.

Step 5: Processing the Sales Order to Completion

To process to completion the sales order that you have created in this activity, do the following:

1. On the Inventory Allocation Details (IN402000) form, select PAPAYAS as the Inventory ID and RETAIL as the Warehouse.
2. On the Item Plans tab, review the only line in the table, which has 15 in the Qty. column. This indicates that 15 PAPAYAS units are allocated directly for the sales order for which you have processed the purchase.
3. Select LYCHEES as the Inventory ID. In the only table line, make sure that 10 is specified in the Qty. column. This indicates that 10 LYCHEES units are also allocated for the sales order for which you purchased them.
4. In the table, double-click the line to open the sales order on the Sales Orders (SO301000) form.
5. On the Details tab, click the PAPAYAS line, and on the table toolbar, click PO Link.
6. In the Purchasing Details dialog box, which opens, review the purchase order to which this sales order line is linked.
7. Close the dialog box.
8. On the Details tab, click the LYCHEES line, and on the table toolbar, click Line Details.
9. In the Line Details dialog box, which opens, review the allocation line, which shows that the ordered items are allocated in the RETAIL warehouse.
10. Click OK to close the dialog box.
11. On the form toolbar of the Sales Orders form, click Create Shipment.
12. In the Specify Shipment Parameters dialog box, which opens, make sure that today's date is specified in the Shipment Date box and the RETAIL warehouse is specified in the Warehouse ID box, and click OK. The dialog box is closed. The system creates a shipment and opens it on the Shipments (SO302000) form.
13. On this form, review the details of the shipment, and make sure that both lines have been added with the appropriate quantities.
14. On the form toolbar, click Confirm Shipment to confirm the shipment, and then click Prepare Invoice to prepare the invoice for the customer.
15. On the Invoices (SO303000) form, which opens, review the details of the prepared invoice.
16. On the form toolbar, click Release to release the invoice.
17. Return to the Sales Orders form with the Website order #00782 (tropical fruits) sales order for the GOODFOOD customer open, and notice that it has the Completed status, as shown in the following screenshot.