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How to Create Purchase Order in Business Central

Create Purchase Order in Business Central:

(1) A purchase order (PO) is a document that represents an agreement with a vendor to buy goods or services. The document also helps keep track of product receipts that are made toward the order and, later, the accounting of vendor invoices that the vendor bills toward the order.

(2) In this blog as per Microsoft, we will see the creation of a Purchase Order. It’s more typical for purchase orders to be created automatically as a result of master planning, direct delivery, and other processes. Purchase orders are typically created by a purchasing agent.

(3) Purchase orders include several status fields that indicate the progress of the order. All these fields are visible in the Header view of the order, and a few of them are also visible in the grid overview of all orders.

  • Open order– Orders have been created, and quantities are on order.
  • Received– Some of the quantities have been received, but they haven’t been invoiced yet.
  • Invoiced– The full quantity on the order has been invoiced. Note: If an order has been partially invoiced, neither Received status nor Invoiced status is appropriate. Therefore, the order will still have a status of Open order.
  • Canceled– An order was confirmed but later canceled. Therefore, this status indicates that there are no longer any open quantities on order.

(4) Open D365 BC and type “Purchase Order” in the search box, as shown.

Search Purchase Orders in Business Central

(5) After that, the Purchase Order list opens and press the “New” button, as shown.

select new button in purchase order list

(6) Now enter the information in each tab i.e.

  • General Tab: In this tab, Vendor Detail and Purchase Order information, as shown.
Purchase Order General Tab
Field NameField DescriptionImportance
No.Specifies the number of the involved entry or record, according to the specified number series. If the no. series relation defined, then “No.” field is visible at the time of creating “Purchase Order”.Mandatory
Vendor No.Specifies the number of the vendor who delivers the products. Select from the lookup list.Mandatory
AddressSpecifies the vendor’s buy-from address. Auto update as per the Vendor Master. But you change as per the business requirement.Mandatory
Address 2Specifies an additional part of the vendor’s buy-from address. Auto update as per the Vendor Master.Mandatory
CitySpecifies the city of the vendor on the purchase document. Auto update as per the Vendor Master.Mandatory
Post CodeSpecifies the postal code. Auto update as per the Vendor Master.Mandatory
Country/RegionSpecifies the country or region of the address. Auto update as per the Vendor Master.Mandatory
Contact No.Specifies the number of contact person of the vendor’s buy-from.Optional
Phone No.Specifies the telephone number of the vendor contact person.Optional
ContactSpecifies the name of the person to contact about an order from this vendor.Optional
Document DateSpecifies the date when the related document was.Mandatory
Posting DateSpecifies the posting date of the record.Mandatory
Due DateSpecifies when the related purchase invoice must be paid.Mandatory
Vendor Invoice No.Specifies the document number of the original document you received from the vendor. You can require the document number for posting, or let it be optional. By default, it’s required, so that this document references the original. Making document numbers optional removes a step from the posting process. For example, if you attach the original invoice as a PDF, you might not need to enter the document number. To specify whether document numbers are required, in the Purchases & Payables Setup window, select or clear the Ext. Doc. No. Mandatory field.Mandatory (at the time of posting Purchase Invoice)
Purchaser CodeSpecifies which purchaser is assigned to the vendor.Optional
No. of Archived VersionsSpecifies the number of archived versions for this document.Based on Setup
Order DateSpecifies the date the order was created. The order date is also used to determine the prices and discounts on the document.Mandatory
Vendor Order No.Specifies the vendor’s order number.Optional
Alternate Vendor Address CodeSpecifies the order address of the related vendor.Optional
Responsibility CenterSpecifies the code of the responsibility center, such as a distribution hub, that is associated with the involved user, company, customer, or vendor.Based on Setup
Assigned User IDSpecifies the ID of the user who is responsible for the document.Optional
StatusSpecifies whether the record is open, waiting to be approved, invoiced for prepayment, or released to the next stage of processing.Informative
Include GST in TDS BaseSelect this field to include the GST value in the TDS Base.As per requirement
  • Line Tab: In this tab, Line Detail information, as shown.
po line tab business central
Field NameField DescriptionImportance
TypeSpecifies the type of transaction that will be posted with the document line. If you select Comment, then you can enter any text in the Description field, such as a message to a customer.Mandatory
No.Specifies the number of a general ledger account, item, additional cost, or fixed asset, depending on what you selected in the Type field.Mandatory
DescriptionSpecifies a description of the entry of the product to be purchased. To add a non-transactional text line, fill in the Description field only.As per requirement
Location CodeSpecifies a code for the location where you want the items to be placed when they are received.Mandatory/Auto update as per the header information.
Bin CodeSpecifies the bin where the items are picked or put away.As per requirement
QuantitySpecifies the number of units of the item specified on the line.Mandatory
Unit of Measure CodeSpecifies how each unit of the item or resource is measured, such as in pieces or hours. By default, the value in the Base Unit of Measure field on the item or resource card is inserted.Mandatory
Direct Unit Cost Excl. VATSpecifies the cost of one unit of the selected item or resourceMandatory
Qty. to ReceiveSpecifies the quantity of items that remains to be received.Mandatory at the time of receiving the items.
Quantity ReceivedSpecifies how many units of the item on the line have been posted as received.Auto updated
Qty. to InvoiceSpecifies the quantity that remains to be invoiced. It is calculated as Quantity – Qty. InvoicedMandatory at the time of invoicing the items.
Quantity InvoicedSpecifies how many units of the item on the line have been posted as invoiced.Auto updated
  • Invoice Detail Tab: In this tab, Invoice/Billing Detail information, as shown.
Business Central Invoice Detail Tab
Field NameField DescriptionImportance
Currency CodeSpecifies the currency of amounts on the purchase document.As per requirement
Expected Receipt DateSpecifies the date you expect the items to be available in your warehouse. If you leave the field blank, it will be calculated as follows: Planned Receipt Date + Safety Lead Time + Inbound Warehouse Handling Time = Expected Receipt Date.As per requirement
Prices Including VATSpecifies if the Unit Price and Line Amount fields on document lines should be shown with or without VAT.As per requirement
VAT Bus. Posting GroupSpecifies the VAT specification of the involved customer or vendor to link transactions made for this record with the appropriate general ledger account according to the VAT posting setup.Mandatory (country specific)
Payment Terms CodeSpecifies a formula that calculates the payment due date, payment discount date, and payment discount amount.Optional
Department CodeSpecifies the code for Shortcut Dimension 1, which is one of two global dimension codes that you set up in the General Ledger Setup window.Optional
Project CodeSpecifies the code for Shortcut Dimension 2, which is one of two global dimension codes that you set up in the General Ledger Setup window.Optional
Payment Discount %Specifies the payment discount per cent granted if payment is made on or before the date in the Pmt. Discount Date field.Optional
Shipment Method CodeSpecifies the delivery conditions of the related shipment, such as free on board (FOB).Optional
Payment ReferenceSpecifies the payment of the purchase invoice.Optional
Creditor NoSpecifies the number of the vendor.Optional
On HoldSpecifies that the related entry represents an unpaid invoice for which either a payment suggestion, a reminder, or a finance charge memo exists.Optional
Requested Receipt DateSpecifies the date that you want the vendor to deliver to the ship-to address.Optional
Promised Receipt DateSpecifies the date that the vendor has promised to deliver the order.Optional
  • Shipping and Payment Tab: In this tab, Shipping Detail information is entered, as shown.
PO Shipping and Payment Tab in d365 BC
Field NameField DescriptionImportance
Ship-toSpecifies the address that the products on the purchase document are shipped to. Default (Company Address): The same as the company address specified in the Company Information window. Location: One of the company’s location addresses. Customer Address: Used in connection with drop shipment. Custom Address: Any ship-to address that you specify in the fields below.Mandatory
Location CodeSpecifies a code for the location where you want the items to be placed when they are received.Mandatory
Bill to-Location(POS)Specifies the Bill to Location Code which is considered as Place of Supply.As per requirement
Pay-toSpecifies the vendor that the purchase document will be paid to. Default (Vendor): The same as the vendor on the purchase document. Another Vendor: Any vendor that you specify in the fields below.As per requirement
  • Foreign Trade Tab: In this tab, Foreign Trade information is entered, as shown.
Foreign Trade Tab Business Central
Field NameField DescriptionImportance
Transaction SpecificationSpecifies a specification of the document’s transaction, for the purpose of reporting to INTRASTAT.As per requirement
Transaction TypeSpecifies the type of transaction that the document represents, for the purpose of reporting to INTRASTAT.As per requirement
Transport MethodSpecifies the transport method, for the purpose of reporting to INTRASTATAs per requirement
Entry PointSpecifies the code of the port of entry where the items pass into your country/region, for reporting to Intrastat.As per requirement
AreaSpecifies the destination country or region for the purpose of Intrastat reporting.As per requirement
  • Application Tab: In this tab, Application information is entered, as shown.
PO application tab bc d365
Field NameField DescriptionImportance
Applies-to Doc. TypeSpecifies the type of the posted document that this document line will be applied toAs per requirement
Applies-to Doc. No.Specifies the number of the posted document that this document line will be applied to.As per requirement
Applies-to IDSpecifies the ID of the entries that will be applied to when you choose the Apply entries Action.As per requirement
  • Tax Information Tab: In this tab, Tax information is entered, as shown.
PO Tax Information Tab in Business Central
Field NameField DescriptionImportance
GST Vendor TypeSpecifies the vendor type for GST transaction. Auto update from the Vendor master for calculation GST Amount.Mandatory in case of GST
Bill of Entry DateSpecifies the entry date defined in bill of entry document.Mandatory in case of Custom duty
Bill of Entry No.Specifies the bill of entry number. It is a document number which is submitted to the customs department.Mandatory in case of Custom duty
Without Bill Of EntrySpecifies whether the invoice is with or without bill of entry Another Vendor: Any vendor that you specify in the fields below.Mandatory in case of Custom duty
Bill of Entry ValueSpecifies the values as mentioned in bill of entry document.Mandatory in case of Custom duty
Invoice TypeSpecifies the Invoice type as per GST law.As per GST Requirement.
GST InvoiceSpecifies if GST is applicable.Mandatory in case of GST
POS Out Of IndiaSpecifies if the place of supply of invoice is out of India.As per requirement
Associated EnterprisesSpecifies that an import transaction of services from companies Associates Vendor.Optional
Location State CodeSpecifies the state code mentioned in location used in the transaction.Mandatory in case of GST
Location GST Reg. No.Specifies the GST Registration number of the Location specified on the journal line.Mandatory in case of GST
Vendor GST Reg. No.Specifies the GST registration number of the Vendor specified on the journal line.Mandatory in case of GST
Order Address GST Reg. No.Specifies the GST registration number of the mentioned order address in the transaction.Mandatory in case of GST
GST Order Address StateSpecifies the state code of the mentioned order address in the transaction.Mandatory in case of GST
Nature of SupplySpecifies the nature of GST transactions. For example, B2B/B2C.Mandatory in case of GST
Vehicle No.Specifies the vehicle number on the sales document.Optional
Vehicle TypeSpecifies the vehicle type on the sales document. For example, Regular/ODC.Optional
Distance (Km)Specifies the distance on the purchase document.Optional
Shipping Agent CodeSpecifies the shipping agent code. For example, DHL, FedEx etc.Optional
Rate Change ApplicableSpecifies if the rate change is applicable on the sales document.Optional
Supply Finish DateSpecifies the supply finish date. For example, Before rate change/After rate change.Optional
Payment DateSpecifies the payment date.Optional
  • Subcontracting Tab: In this tab, Subcontracting information is entered, as shown.
Subcontracting Tab D365 BC
Field NameField DescriptionImportance
SubcontractingSpecifies the order is subcontractingAs per requirement
Subcontracting Order NoSpecifies the subcontracting order no.As per requirement
Subcontracting Order Line NoSpecifies the subcontracting order line noAs per requirement
Subcontracting Post Line NoSpecified subcontracting post line noAs per requirement
  • Prepayment Tab: In this tab, Prepayment information is entered, as shown.
po Prepayment Tab in d365 bc
Field NameField DescriptionImportance
Prepayment %Specifies the prepayment percentage to use to calculate the prepayment for sales..As per requirement
Compress PrepaymentSpecifies that prepayments on the purchase order are combined if they have the same general ledger account for prepayments or the same dimensions.As per requirement
Prepmt. Payment Terms CodeSpecifies the code that represents the payment terms for prepayment invoices related to the purchase document.As per requirement
Prepayment Due DateSpecifies when the prepayment invoice for this purchase order is due.As per requirement
Prepmt. Payment Discount %Specifies the payment discount percent granted on the prepayment if the vendor pays on or before the date entered in the Prepmt. Pmt. Discount Date field. 
Prepmt. Pmt. Discount DateSpecifies the last date the vendor can pay the prepayment invoice and still receive a payment discount on the prepayment amount. 
Vendor Cr. Memo No.Specifies the number that the vendor uses for the purchase order. 

(7) After doing the above steps post the Purchase Order document. For posting refer to this blog, How to Receive and Invoice Purchase Document in D365 BC.


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