Difference Between PO on sales order and PO created by converting Pureq

[former_member906762]

Hello Gurus,

Can any one please explain what is the difference between the PO number on the sales order and the Purchase order that we create by converting Pur Req into Purchase Order (PO).

Regards,

Nick

[Former Member]

This message was moderated.

[Former Member]

Hi Nick,

Here are some of my Thoughts.

Purchase Order on Sales Order.

PO is an order confirmation given to the supplier/vendor when we want something to buy. Its an agreement between us and the Buyer which will have the information on what we want to buy, when we need it, where we need it, what qty, Price & Terms and conditions.

PO will be raised by the Buyer (Company,Purchasing Organization, Purchasing Group) based on the business need.PO is the confirmed order what we send to our Supplier.

For the supplier to whom we send the PO, Our PO is the SO for them.

What ever we buy will fall on their sales side (Sales Organization, Channel, Division etc). we are the customer for our Suppliers.

SO strictly on a firm PO is mostly applicable for industries other than "Make to Stock" type because they'll start planning for the fulfillment only after they receive the SO.

PO on Purchase Requisition

Its hard to watch out demand of every single product closely in large scale industry, If we are running a small shop of 10 products then you'll have clear idea on demands of 10 products, so you'll raise PO's directly for the replenishment of those products which are in demand. Consider there are billions of products involved in your business, in this case its hard to create firm PO's directly (which is impossible) so we ask the system to suggest on replenishment whenever  we run out of inventory based on the demands and that system proposal is PR, so PR should be confirmed to PO after review.

PR -->PO is mostly applicable for industries like "Make to Stock" "Procure to Stock" etc type because they'll start planning for the future fulfillment based on the forecast which system will generate by considering the past sales history. Business/SCM is very volatile and customer may need the product anytime like FMCG, Retail, Automative Spare Parts Planning etc.

Regards

Vinoth

[RahulHanda]

Hi Nick,

The PO number mentioned in sales order is purchase order of the customer. This means when your customer ask for any material with some quantity, it's because of demand in their system which generated a PR which was converted to PO. For this PO you being the source of supply, they send you this PO. Now in your system you will create a sales order against this PO from your customer. For trace-ability we put this PO number in sales order. You can check in VA05n the sales order w.r.t. PO (customer PO number).

Now the PR which is converted into PO is for your supplier. The logic would apply to your supplier. When you send this PO to your supplier they will create a sales order in their system and put this PO number as reference in their sales order (considering that your customer, supplier & you are using SAP).

I hope this clarifies your query. If yes please follow

else let us know your concern.

Regards

Rahul