Creating a Purchase Agreement

You can create a purchase agreement from the Purchase Agreements tab as follows:

  1. Click New.
  2. The Purchase Agreement record type is selected by default. Click Next.
  3. Select the Supplier Site.
  4. Enter the Start Date.
  5. Enter the End Date. You can leave this field blank if you wish the agreement to continue indefinitely, or if you have not yet determined when the purchase agreement must end.
  6. Enter the Maximum Amount to Order. If you want the purchase agreement to have an unlimited amount, leave this field blank.
  7. Enter the Maximum Quantity to Order. If you want the purchase agreement to have an unlimited quantity, leave this field blank.
  8. Complete the remaining fields as required. For more information, see Purchase Agreement Fields.
  9. Click Save.
Warning: If you leave the Maximum Amount to Order blank, the purchase agreement will have an unlimited amount. If you leave the Maximum Quantity to Order blank, the purchase agreement will have an unlimited quantity.

Considerations for Creating Purchase Agreements

Creating a purchase agreement is a quick and easy process. Several validations and restrictions have been applied to ensure certain perquisites for the purchase agreement are met. This reduces the chances of human data entry errors and guarantees a consistent workflow.

You cannot create a new purchase agreement with status of "Active", "Approved", "Canceled", "Complete", or "Expired". In the same way, you cannot update an existing purchase agreement if it has any of those statuses. To have a status of "Submitted for Approval" or "Approved", purchase agreements must contain at least one purchase agreement line. Once a purchase agreement has a status of "Approved" or "Active", it cannot be deleted.

Purchase agreements are automatically set to a status of "Complete" when:

  • The amount in the Amount on Order field reaches the amount specified in the Maximum Amount To Order field of the purchase agreement.
  • The quantity in the Quantity on Order field reaches the quantity specified in the Maximum Quantity to Order field of the purchase agreement.
  • The status of all its purchase agreement lines is "Complete".

The Supplier Site lookup lists only active supplier sites. If you don't see the supplier site you wish to associate with your purchase agreement, check that the supplier site is active. Once a supplier site is associated with a purchase agreement, it can only be deactivated if the purchase agreement header has a status of "Canceled", "Complete" or "Expired".

The Supplier Contact lookup lists only active supplier contacts. If you don't see the supplier contact you wish to specify for your purchase agreement, check that the supplier contact is active. Once a supplier is associated with a purchase agreement, it can only be deactivated if the purchase agreement header has a status of "Canceled", "Complete" or "Expired".

The end date is the date that you specify that the agreement will run until. You can leave the end date field blank when you create the purchase agreement if you wish the agreement to continue indefinitely, or if you have not yet determined when the purchase agreement must end. If you enter a purchase agreement end date, it must occur after the purchase agreement start date. Purchase agreements are automatically set to a status of "Expired" when they reach their end date.

Note:

The automatic expiration of purchase agreements and purchase agreement lines is enabled through the Purchase Agreements Scheduled Process Feature Console feature. Contact your administrator if you want to have this feature enabled.

You can specify the maximum amount and quantity that can be ordered for a purchase agreement. You can also create a purchase agreement with an unlimited amount or quantity by leaving these fields blank.

We recommend that you do not specify a maximum quantity for your agreement if any of its agreement lines is reflecting subscriptions for intangible items such as software licenses.

The Ship to Warehouse lookup lists all the warehouses that are available for you to ship the purchase agreement items to. All of the warehouses listed are active. If you don't see the warehouse you wish to specify for a purchase agreement in the lookup, check that the warehouse is active. Once a warehouse is associated with a purchase agreement, it can only be deactivated if the purchase agreement header has a status of "Canceled", "Complete" or "Expired".