How Do I Control Back Orders?

If you raise a purchase order for 10 units and you receive only 6 units, what do you do with the other 4 units? This depends on your practices and those of your supplier. Your two options are:

1. As you are receiving the goods, you indicate that more items are to come. This means that you don't have to raise another purchase order and that the stock will turn up sooner or later. When it does, you simply match against the original purchase order. This is back ordering.

2. As you receive the goods, you indicate that the stock is fully received and you raise a new purchase order for the outstanding quantity.

Back ordering is the default option in the system but you can control back ordering by location and supplier. If you don't want to do back ordering, you can turn the Back Order option off in the Inventory Options menu in Locations. This will mean that NO back ordering can occur for the location at all. Alternatively, you may want to use back ordering where possible, but some of your suppliers don't support back orders. In this case, find the supplier in Suppliers and check off the Back Order option. This means you can use back orders for those suppliers that support it.

What is the effect of these options? When you receive items in either Goods Receipt or Invoice Matching, the system does a check when you enter the received quantity. If the received quantity is less than the ordered quantity, the system will check the back order options for the location and the supplier. If BOTH support back ordering, the received status of the item is set to 'More To Come'. If back ordering is checked off for either location OR supplier, the received status is set to 'Received'.

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