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Buyer Places Purchase Order

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If this is the first time a product has been ordered from a supplier: Buyer makes arrangement with Manufacturer or Distributor (acting as Supplier) to supply the product. Buyer agrees with Supplier on payment terms (pay in advance, pay on delivery (COD), or credit (billing account) with net payment period). Buyer records initial supplier information for product with at least minimum and increment quantities and latest supplier cost (for a given quantity). Buyer may also record more detailed agreement information.

Buyer creates Purchase Order for a single Supplier based on existing re-order Requirements or on manual/external planning. Buyer specifies ship before date (aka "cancel if not shipped by" date) and "cancel all back orders after" date. Buyer may specify a PO#, otherwise it is generated automatically. Buyer approves purchase order. When recording PO, Company automatically sets price as "last price" on Supplier-Product record.

Buyer places an order with the given Supplier by sending Supplier order as a printed document, email, OAGIS or UBL XML message, or by phone. Supplier tells Buyer one or more estimated ship dates and Buyer records those dates.

If the payment term is pay in advance Buyer notifies Accountant who immediately sends payment to Supplier.

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1 Comment

  1. David:
    In your story, is the Buyer acting on behalf of the Company? If so, does the Buyer create the purchase order? Isn't the purchase order usually created in advance by the supplier and then the Buyer/Customer creates a purchase request or sales order asking to be billed against the purchase order?

    Could you comment on my understanding of this process?

    And how about the reverse of this? OFBiz is the supplier. Shouldn't it be OFBiz that creates the purchase order (with all the terms and conditions or "agreements") and then Buyers from other Party(s) make sales order requests against outstanding purchase orders that OFBiz holds?