Oracle Complex Purchase Orders – Milestone – It is recommended to read the Complex Purchase Order overview document here prior to reading this document.
Business Scenario: A Milestone based complex purchase order may be used to procure a complex service or goods where the purchasing organization prefers to pay the supplier at the completion of each milestone instead of completion of the whole project. Let’s use the typical ERP Implementation project as an example of a Milestone based complex purchase order. The phases – Requirements, Analysis, Design, Build, and Test may be considered as each milestone a project needs to complete and the total activity being outsourced to a Consulting Vendor. So the Milestone based complex purchase order will have each phases mentioned above as Milestone Pay Items.
How to create a Complex Milestone Purchase Order:
Responsibility: PO Superuser or similar
Navigation: Buyer Work Centre -> Orders
Select the “Complex Purchase Order” document style in the “Create” field and click on the “Go” button.
Enter all the required information in the Header section.
Popular Oraappsguide Video: Oracle Complex Purchase Order Overview
Now go to Lines tab and enter the PO lines.
Select the line type – The value basis of the line type should be Quantity or Fixed Price.
Following fields may be entered for a “Quantity” Value Basis line type:
Optionally enter the Item information.
Enter the description, category, quantity, price and need-by-date information.
Optionally enter the Supplier Item information.
You need to use this line type if goods being procured on a Milestone basis.
Following fields may be entered for a Fixed Price Value Basis line type:
Enter the Description, Category, Price and Need-by-Date.
You won’t be able to enter the Item, Quantity, Unit information, as this kind of line type used to procure Fixed Price services only. For example: Cleaning services to be procured at a fixed cost of $200; hence no quantity involved in the PO line.
Next go to the “Pay Items” tab and you will see there is only one pay item displayed by default. Pay item type “Milestone” will be defaulted for the “Quantity” value basis line types and this can’t be changed while all three pay items types – Milestone, Lumpsum and Rate will be available for selection for the “Fixed Price” value basis line types. Select “Milestone” pay item type.
You need to split the pay item for a particular line to multiple milestones if it is applicable and then update the Milestone value, need-by-date accordingly.
Enter the distribution information as appropriate and finally save and submit the PO for approval.
The content posted above is based on author’s own experience and opinion. The details mentioned above may differ in various versions and scenarios of Oracle e-Business suite. You need to have required licenses from Oracle to enable mentioned functionalities.