To create a new purchasing agreement for a supplier

The procedure to create a new purchasing agreement for a supplier is as follows:

1. Navigate to Quick Menu > Purchasing > Configuration > Supplier Agreements. The Supplier Agreement window is displayed.
2. Click on New Agreement 1. All fields are activated ready for data entry.
3. Specify the supplier record to which the purchase agreement relates, entering the first few characters of their business name into the dynamic Primary supplier name search field provided, before selecting the corresponding entry from the filtered Supplier Search Results list. Alternatively, to conduct a more detailed search: (a) Use the spy-glass icon () to launch the Supplier Search window - The Supplier Search window is displayed; (b) Enter sufficient details into the supplier fields provided and click on Search - The Select Supplier window is displayed, returning all possible matches; (c) Double-click on the row containing the exact record match or use Refine Search to enter alternative criteria - The name of the supplier is displayed in the corresponding Primary supplier name field along with their unique Primary supplier code identifier.
4. Enter the Agreement name into the field provided 2 1.
5. Using the Agreement type drop-down field, select a parameter value to categorise the framework of the purchasing agreement i.e. Ad hoc, Primary or Special.
6. Using the Agreement status drop-down field, select the Active status for the new purchasing agreement 3.
7. Use the Comments fields to add contextual information pertinent to the purchasing arrangements with this supplier.
8. Choose an Effective from date for this purchasing agreement i.e. the date on which it came into effect 4.
9. Choose an Effective to date if the purchasing agreement is to be reviewed on a specific date or to capture a change of circumstances; a blank field means it will never expire.
10. Where Purchase orders need approval over a set amount, enter the threshold value into the field provided. The Up and Down arrows are available to increment or decrement the value, as required.
11. Where a ceiling value is to restrict the submission of purchase orders under the new agreement, enter the threshold amount into the Cap with total order value limit field provided; use the Behaviour if exceeded drop-down field to define the resulting action from any detected breach i.e. Cannot Raise Order, No Restrictions or Order Authorisation Required.
12. Enter the Minimum order value and Maximum order value operating boundaries for the purchasing agreement into the corresponding fields provided.
13. Enter the Allowed variation without approval (%) percentage value into the field provided to control the additions that can be applied to purchase orders under this agreement without authorisation being required.
14. Enter the Maximum open order value into the field provided i.e. the total permitted value of concurrent orders currently in progress that can be issued to the supplier, based on the actual cost of each order.
15. Enter the Maximum open order number into the field provided i.e. the total permitted number of concurrent orders currently in progress with the supplier at any one time.
16. Enter the Second level invoice variation value into the field provided i.e. the maximum variation by value permitted for a supplier invoice compared to the purchased catalogue prices.
17. Enter the Second level invoice variation % value into the field provided i.e. the maximum variation by percentage permitted for a supplier invoice compared to the purchased catalogue prices.
18. Enter the Second level invoice authorisation amount into the field provided i.e. the invoiced value above which permission must be granted before payment can be processed.
19. Activate the Invoice PO costs tick box provided to denote that only invoiced totals equalling the original purchase order values are permitted.
20. Activate the Invoice received quantities tick box provided to denote that only invoiced quantities matching the original purchase order details are permitted.
21. Click on Save. A unique system-generated reference number is assigned to the new record and the entry is displayed in the hierarchical list, underneath the nested Agreement type and Primary supplier name headings 5.

Tip

1 To aid in identification purposes, it is good practice to devise and uphold a consistent naming convention for all purchasing agreements.

Note

1 Upon first access, all fields are automatically activated ready for data entry; hence the New Agreement button is inactive.

2 System validation rules ensure that the name entered for each purchase agreement is unique for the effective period.

3 Where a current purchasing agreement is to be temporarily suspended or cancelled completely, the alternative status progression values of Inactive or Closed are also available for selection.

4 The Effective from date defaults to the current system date and cannot be left blank.

5 Steered entirely by the end user, a reference number convention must be predefined for the Supplier Agreement Reference entity.

See related topics...

Purchasing supply chain maintenance overview

To create a new purchasing definition for a supplier

To create a new supplier record

To define a reference number syntax