Six Things a Purchase Order can Help you Achieve
One critical step in retail management is making a Purchase Order. It is an important document in retail or wholesale business that is issued by a buyer to a supplier. It specifies the types of products and their quantities needed by the retailer/wholesaler. Preparing a purchase order doesn’t take much time, but some retailers skip this step either because it involves some extra work, or because they think they don’t need it. However, a purchase order can help you keep tabs on your inventory in a number of ways. In this article we will show how a purchase order can help your business and what features in Candela Inventory Software can be used to further enhance its functionality.
Streamline Inventory Replenishment Process
Retailers and wholesalers who purchase items in the open market may think they don’t need a purchase order because they don’t have to issue orders to a particular supplier(s). But even if you don’t need to prepare purchase orders for your suppliers, this document can serve another important function. It can serve as an ongoing inventory replenishment list. This is how:
Sales and inventory reports give you regular updates about your inventory position and can help you make projections about your future stock replenishment. Based on such forecasts you can begin making a purchase order and keep adding items to it along with their needed quantities. To do this simply save a purchase order, open it in update mode and add more inventory. Keep adding items on a daily or weekly basis.
Once the purchase order is complete you can take a printout and go shopping. Later you can record which items in the purchase order were not available. By making an ongoing purchase order you will not have to get a detailed overview of your inventory position before buying stock.
This will save time.
Create a Reliable checklist for Received inventory
If you have bought or received stock against a purchase order, you can use it as an item checklist. While entering stock you can load the purchase order and enter inventory against it. This will also help you keep track of the items that were not available, or are received more or less than the ordered amount.
Stock replenishment based on Sales of a particular period
In Candela retail software, the purchase order can be used to prepare a list of inventory items based on the sales during a certain period. For example, if a certain month shows good business you can simply generate a PO based on the quantity sold during that month. This how: Load products in the purchase order and from Inventory Level and Sale radio buttons select Sale. Sale criteria screen will pop up. You can select the date range and the system will calculate the quantity sold during that period and set the order quantity accordingly when you click Generate Order button.
You can do a number of things on the sale criteria screen:
- Select the date range to generate order according to the sales of that period.
- Select a Day to generate order according to the sales on the selected day within the selected time period. For example, if you select ‘Wednesday’ the system will consider sales of all Wednesday that fall within the selected date range.
- You can choose to Increase or decrease order quantity by a certain percentage of the sales within the selected time range.
Stock Replenishment Based on Inventory Levels
If you have set inventory levels for products on Product Re-Order Quantity screen, the system can automatically check the current inventory and order the quantity according to the selected inventory level. Consider this example: you have set a minimum inventory level for a particular product as 200 and the current inventory in your system is 90. Now you want to make a purchase order for this product based on minimum inventory level. You will select the radio button ‘Min’ and click Generate Order button. In the Order Quantity column, the system will automatically enter 110 pieces to bring the inventory level to min i.e. 200. Moreover, If some inventory is in transit, the system will automatically adjust ordered quantity by taking into account in-transit stock.
Stock Replenishment based on Customer orders
You can also prepare purchase orders against the customer orders taken on Sales and return screen. This is the how: Select the radio button Special Order; On the pop-up screen, give the date range and click the Search button. All customer orders prepared within the selected date range will load in the grid. select the one you want to load for the purchase order, and click OK. Now click Generate Order button and the Order will load in the Purchase Order grid. The system will automatically load products with customer order quantity, if you want to you can change the quantity in the Qty column, select supplier, and click Save.
Stock Replenishment Security Against Theft and Error
Purchaser orders can also provide a check against quantity discrepancies while entering the stock. There is a feature in Candela that makes it possible to limit your system to enter stock only against a purchase order. To use this feature, go to System Configuration/purchase tab and mark the checkbox “Enable PO Based GRN.”
Moreover, you can make doubly sure that only those products of the PO are entered in the GRN that are actually received. Go to: Security>GroupRights. Select Purchase from ‘Form Categories’; expand Purchase; Expand GRN. Check the flags “Enable Product Entry on PO Load” and “Restrict Excess Qty in GRN than PO.’ Save.
Now on the GRN screen, when you load a PO, it will be loaded in the grid with zero quantity. As you scan the received products, they will appear in the grid with the received and scanned quality. And the system will not allow you to enter more than the quantity of the selected Purchase Order.