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
  • 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
  • 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

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