Glossary
Purchase order (PO)
A purchase order (PO) is the buyer's document that orders goods or services from a supplier. It states the PO number, the buyer, the ship-to address, the line items, the requested dates and the terms.
In short
A purchase order (PO) is the buyer's document that orders goods or services from a supplier.
It names the PO number, the buyer, the ship-to address, the line items (article, quantity, unit and price), the requested dates and the terms.
Without EDI, POs come as PDF by email, via portals or by phone. With EDI they arrive as an X12 850 Purchase Order or as an EDIFACT ORDERS message.
Example
A distributor receives purchase order PO-4711 for 48 pieces, but the lines use the customer's own part numbers, other units of measure and free text. Before a sales order can exist, each line has to be mapped to the distributor's own article. If the customer orders by the box and the distributor counts single pieces, the quantity has to be converted.
Once every line is mapped, the seller creates the sales order in its ERP. The PO number belongs on that sales order. Mapping is the step between the purchase order and the sales order.
What to watch for
Put the PO number on every later document, so that each document can be matched to the order.
Map customer part numbers to your own articles, and check the units: each, box or meter. A wrong unit changes the quantity.
Compare the requested date with the confirmed date.
Track changes to a PO. A changed PO has to be checked against the sales order again.
Not to be confused with
Sales order: the seller's internal record of the same order, created in the seller's ERP from the purchase order. The PO belongs to the buyer.
Request for quotation: a request for prices and terms, sent before any order exists.
Invoice: the bill that follows the order and the delivery. In the seller's process it comes after the sales order. It is a different document with a different purpose.
In Mercura
Mercura reads purchase orders from email and PDF, matches each line to an article in the customer's own catalogue and hands the order to the ERP.
Related terms
Sales order
A sales order is the record a seller keeps of a customer order in its own ERP system. It is created from the customer’s purchase order or from an accepted quote.
Order acknowledgement
An order acknowledgement (Auftragsbestätigung, AB) is the seller's confirmation of a customer's order. It states the items, quantities, prices, delivery dates and terms.
ANSI X12
ANSI X12 (ASC X12) is the EDI standard used mainly in North America. It defines numbered transaction sets for business documents, such as the 850 purchase order and the 855 purchase order acknowledgment.
EDIFACT
EDIFACT (UN/EDIFACT) is the international EDI standard of the United Nations, maintained by UN/CEFACT. Its syntax rules are set out in ISO 9735, and it defines messages such as orders and invoices.
Touchless order processing
Touchless order processing (German: Dunkelverarbeitung) is a business process that runs fully automatically, without anyone touching it. An incoming order is read, checked against master data and created in the ERP without manual work.
Part number cross reference
A part number cross reference is a table that maps one part number to an equivalent one: the product of a competitor to your own, a customer number to your article number, or an old number to its successor.