Order Management
Overview
You can source requisitions to a purchase order. A purchase order is a commercial document and the first official offer issued by a buyer to a seller. Purchase orders indicate types, quantities, and agreed prices for products or services to control the purchasing of products and services from external suppliers.
You can automatically create purchase orders from requisitions by configuring requisition sourcing rules. Alternatively, you can manually source purchase orders from requisitions by using the
Source Requisitions
task.When manually sourcing requisitions to purchase orders, you can also choose to add new requisition lines to an existing purchase order. When added to an approved purchase order, the
Purchase Order Event
business process will restart. If added, the lines are issued to a purchase order, and the purchase order Change Order
business process will initiate.Note
: Use the Find Purchase Orders
report locating requisitions already sourced from a requisition. To change a purchase order, open the purchase order and select Edit from the Related Actions menu.The Buyer, Implementer, and Supplier Contract Specialist roles have the security to create and issue purchase orders. The
Purchase Order Event
business process controls approvals and document routing.Objectives
By the end of this chapter, you will be able to:
- Describe how to process a purchase order in Workday.
- Create and manage a purchase order.
- Configure purchase order acknowledgements.
- Manage purchasing change orders.
Create Purchase Order
To create a purchase order manually, use the
Create Purchase Order
task. Typically, the Buyer, Contract Specialist, and Implementer roles have access to this task. You will need to specify values for:- Company (Organization)
- Supplier
- Currency
- Document Date (to begin the creation of a purchase order)
Then, select your creation option:
- Create a blank purchase order.
- Copy details from existing purchase order.
- Create from supplier contract.
Tip
: The purchase order type is optional and will not display if you did not configure it in the tenant. You will need to create at least one purchase order type if you will be using the Bill Only functionality.When creating a purchase order, Workday marks the required fields with an asterisk (*). All other fields are optional and depend on the configuration based on their procurement procedures and practices. You can restrict most fields that are not system-required by using custom validations. Some of the key fields on a purchase order are:
Summary
- Purchase Order Type: Required for Bill Only functionality but optional for all others.
- Supplier: The supplier for the purchase order.
- Order-From Connection: Defaults from supplier and is only available if configured on the selected supplier.
- Currency: The currency used for the purchase order.
- Tax Amount: Display only if you configure Workday to calculate taxes automatically.
- Freight Amount: Allocated to the lines where spend categories allow freight charges.
- Acknowledgment Expected: Defaults from supplier to indicate that you are expecting a purchase order acknowledgment. You can also manually select this field.
Terms and
Taxes
- Payment Terms: Defaults from supplier.
- Due Date: Optional, but assists in determining when an order is late.
- Shipping Terms: Defaults from supplier.
- Shipping Method: Defaults from supplier.
- Shipping Instructions: Defaults from supplier.
- Supplier Contract: Specify a valid contract associated to the items purchased.
- Tax Option: Defaults from the company procurement options.
- Default Tax Code: Defaults based on ship-to address.
Contact Information
- Issue Option (defaults from supplier)
- Buyer
- Bill-To Contact Detail
- Bill-To Address
- Ship-To Contact Detail
Goods Line Tab
- Item
- Description
- UOM
- Ship-to Address (Required)
- Deliver-to Address (Recommended)
- Worktags
Services Line Tab
- Item
- Description
- Amount
- Ship-to Address
- Worktags
Creation of an invoice, as well as receiving goods, requires an issued purchase order.
The
Purchase Order Issue Event
business process initiates purchase order routing.Workday sends email notifications to suppliers with printable purchase order versions (PDF) upon approval of purchase order events.
When you submit XML auto-purchase orders, the
Purchase Order XML Issue
business process issues purchase orders automatically. Configure the PO Issue Option to XML Auto. The Supplier needs to be on the list in Maintain Supplier Links. In addition, there needs to be an integration with the Supplier.Once issued, Workday updates the purchase order status to Issued.
Purchase Order Acknowledgement
After issuance of a purchase order, you might receive an acknowledgment from the supplier indicating that the supplier has received the purchase order. Purchase order acknowledgments (POAs) typically confirm product availability, pricing, UOM, and shipment dates. The use of POAs increases the visibility of product availability, assists in early resolution of order exceptions, and helps to reduce errors typically found during the invoicing process.
You can manually record a POA against an issued purchase order or load POAs using a delivered web service. This functionality supports the recording of verbal or email correspondence with a supplier.
Workday supports electronic POA meeting Electronic Data Interchange (EDI) 855 standards by providing a delivered integration template. You do not need to customize the template when using the delivered web service.
The delivered roles of Buyer, Implementer, and Supplier Contract Specialist all have access to create purchase order acknowledgments.
The
Purchase Order Acknowledgment Event
business process controls approvals and document routing.This functionality is optional and you must enable it at the tenant level, define a sequence generator, and create the business process.
You can manually record a POA against an issued purchase order or load POAs using a delivered web service. Use the
Find Purchase Order
report and select the purchase order you would like to acknowledge. From the purchase order's Related Actions, select Acknowledge. You can then enter a supplier acknowledgment number and select an acknowledgment option.When selecting a purchase order acknowledgment option, you can select a status of Accept in full, Reject in full, or Partially Accepted. When the status is Fully Accept or Fully Reject, the lines are set to either Accepted or Rejected and are not editable. A Partially Accepted status sets all lines to Unacknowledged status and allows you to select the status and edit the line elements. If there are any changes to the original purchase order, select the Partially Accepted status.
Once in the POA, review each line and update the acknowledgment status to reflect the information provided by the supplier. Also review the quantity, price, and backorder quantity.
You can automate updates to purchase orders to take account of approved changes from the purchase order acknowledgment (POA). You can also automate closing rejected purchase order lines when suppliers reject the purchase orders in the POA process. When you update purchase orders with change orders, you can also view changes your suppliers make to the purchase orders.
Customize the
Acknowledged Purchase Order Lines with Changes
delivered report to filter on specific criteria for the automatic process to pick up the changes. For example, you want to create change orders automatically when the line has a quantity or unit of measure but not a price. Create a custom report to filter unit cost changes. Select the report as an input for scheduling the task to automate quantity and unit of measure changes.You will need to configure the Enable Automatic Updates from Purchase Order Acknowledgement service step on the
Purchase Order Acknowledgement Event
business process. You can only add this service step after the business process completion step. When you configure the service step, you can choose if you would like to:- Create a change order.
- Close a purchase order line on rejection.
Supplier Backorders
Suppliers notify customers of product shortages or backorders verbally, by email, or electronically using an EDI 855 purchase order acknowledgment (POA). Product shortages frequently cause the customer to source the product from another supplier, or order a similar product to replace the product that is unavailable.
The Supplier Backorders Work Area is where Workday provides you with the necessary functionality to detect, track, and manage backorders from suppliers. It provides more visibility into supplier backorders, allowing better informed decisions when addressing item backorders.
To enable the Supplier Backorders Work Area in a tenant, add a POA sequence generator and create the
Backorder Event
business process. Then, assign roles to the Backorder Event security policy, and use the Activate Pending Security Policy Changes
task to activate your security policy changes.For purchase orders to display in the Supplier Backorder Work Area, you must enter a purchase order acknowledgment either manually or electronically. For purchase orders without a POA, you can choose to manage supplier backorders from the purchase order's Related Actions.
The filters available to select purchase order line data include the following:
- Company
- Supplier
- Purchase Order
- Buyer
- Document Date
- Item
- Spend Category
- Acknowledgment Status
- Due Date
- Follow-Up Date
The Supplier Backorder Work Area compares purchase order line information to POA line information. Once complete, you can select and update individual purchase order lines or source new items. The Supplier Backorder Work Area allows for:
- The cancellation or changes to quantities and due dates on backordered purchase order lines, and creates a purchase order change order.
- The creation of a new purchase order from the same supplier with a replacement item.
- The creation of a new purchase order from a different supplier with the original item ordered.
- Linking to new purchase orders created for backorders to the original source document.
- Buyers to add a note and follow-up date to document their review.
Change Orders
After you issue a purchase order, changes can frequently happen for various reasons, including:
- Shortages
- Out of stock
- Pricing
- Change to a delivery date
Suppliers notify their customers of these changes verbally, by email, or electronically using an EDI 855 POA.
A change order in Workday is a revised version of the original purchase order document. It allows changes and communication back to the supplier. The change order maintains the original document information. Notice the series of version numbers on the original purchase order document.
The delivered Buyer, Implementer, and Supplier Contract Specialist roles have access to create change orders. The Change Order business process controls approvals and document routing.
You can initiate change orders from the Related Actions of the purchase order you would like to modify. You can only perform change orders on a purchase order with an Issued status. Have all information available for a change order before you initiate it to minimize the time it is in an In-Process status before reissue. You can only perform receiving against a purchase order not in an Issued status.
Configure the Change Order Issue Option field to the Purchase Order Options section of the Procurement Setup tab on the Contracts and Purchase Orders tab, when configuring suppliers. This field enables you to select an alternative default issue option for change orders when creating, editing, or changing a supplier.
You can make minor changes on your purchase orders without creating change orders. Workday delivers the
Edit Without Change Order
task (secured to the Process: Purchase Order Create/Edit domain) that you can access from the Related Actions menu of approved and issued purchase orders. This task saves time by enabling you to update non-monetary fields on purchase orders without the need to:- Create change orders.
- Resubmit purchase orders for approval.
On the
Configure Optional Fields
task, you can specify which fields to display and hide on the Edit Without Change Order
task.Note
: When you trigger existing custom validations on purchase orders, Workday also displays them on the task.Workday also has a Purchase Order - Prevent Edit Without Change Order condition rule on the
Maintain Procurement Conditional Rules
task. You can use this condition rule to prevent users from making minor edits on specific purchase order types.Example
: You can prevent users from making minor edits on purchase orders that you import into Workday using third-party systems.