With Laurence Tindall
In this article, we are going to go over the purchase orders module in ServiceNow. So what is a purchase order and why is it important to track and manage them in ServiceNow?
A purchase order (PO) is a document issued to a vendor from a buyer, which lists out all of the assets that the buyer wishes to purchase. A purchase order usually lists out the following information for each individual item:
Purchase orders in ServiceNow can be created either manually in the purchase orders module or they can be created directly from an item request in the sourcing task.
In today's tutorial, we're going to create a purchase order from scratch directly from the purchase orders module. For demo purposes, we'll be creating a purchase order for 10 15-inch Apple MacBook Pro laptops. Please note in order to use the purchase orders module you'll need to have the Procurement plugin installed in your ServiceNow instance, and have the Procurement_admin or Procurement_user role assigned to your user account. Now that we've covered what a purchase order is, let's go into ServiceNow and create a purchase order.
Populating a Purchase Order
Main Fields on the Purchase Order
The first thing you'll want to do is go into the application navigator and type in purchase orders. We will then click on the purchase orders module located under the procurement application, and a list of purchase order records will now be displayed. Click on the new button and a blank purchase order form will now load.
In the first field, number, this is the unique system-generated number for this purchase order. In the next field, due by, this is the date in which the total cost of the purchase order must be paid. For this example, we are going to select a random date next week. Next, we have the vendor field, which is the vendor in which you'll be making the purchase order; for this example, we are going to select Amazon. In the next field, ship to, this is the stockroom where the purchase order will be shipped and delivered to. For this example, we are going to select San Diego South Warehouse.
Next, we have the short description field; this field describes the purchase order. For this example, we are going to enter purchase order for 10 15-inch Apple MacBook Pro laptops. In the next field, PO date, this is the date and time in which the purchase order was created; as you can see, the field has already been auto-populated with the date and time we started creating this purchase order. Next, we have the status field; this field automatically displays the status of the purchase order. The value that is displayed in this field is controlled by the purchase order workflow. Throughout the life cycle of a purchase order, a purchase order can go through any one of the following states: requested, ordered, received, canceled, or suspended.
In the next field, assigned to, this is the individual who is assigned to the purchase order and will manage it throughout its life cycle. For this example, we are going to select Abel Tuter. Finally, we have the bill to field, which allows you to select a location for which this purchase order will be billed to. For this example, we are going to select University Avenue San Diego California.
General and Details Tab in a Purchase Order
Now that we've covered the main fields on the purchase order form. Let’s take a look at the general and details tabs. In the first tab, general, you can select the shipping method, purchase order terms, shipping rate, and the purchase order description. We are going to select next-day ground for shipping, since this is the method that Amazon uses. We are going to select Net 30 Days as the payment terms. the shipping rate, we are going to leave this as zero dollars since we're utilizing our company's Amazon Prime account which offers free shipping. In the description field, we are going to leave this blank as the short description pretty much sums up the purchase order. You'll also notice that we have a read-only total cost field. This field automatically calculates the total purchase order amount based upon the shipping and purchase order line item costs. You'll see later on in this tutorial, the total cost value will increase.
In the details tab, we have additional details around the purchase order. In the first field, initial request, this field is read-only and empty because we're creating the purchase order from scratch. If we were generating this purchase order directly from a request on the portal, then the request number would be displayed in this field. Next, we have the requested by field, this field allows you to select who requested this particular purchase order. For this example, we will enter Abraham Lincoln. In the next field, requested, this is the date and time in which the purchase order was requested. The system has automatically added the date and time when we started creating this purchase order record.
Next, we have the ordered field; this field will be auto-populated with the date and time when the purchase order has been ordered in ServiceNow. This field is populated when we click on the order button. The next field, expected delivery, is the date and time for when we'll be expecting the delivery of the goods included in this purchase order. For demo purposes, we will select a random date two weeks out from now. From there, we have the received field, this field displays the date and time in which we receive the purchase order; this field is automatically populated when we mark the assets as received in ServiceNow.
The next field is contract, which allows you to select a contract that is associated with this purchase order. Since there aren’t contracts already in the system, we are not going to select one, but you did have a purchasing agreement contract with one of your vendors, you'd be able to select it in this field. We now have the department field, which allows you to select the department which is responsible for the payment. For this example, we are going to select IT.
In the next field, budget number, this is the budget number which the purchase order will be going against, typically in large organizations, this number will usually be found in an enterprise resource planning tool like SAP, or some other accounting system. For demo purposes, we are going to enter 1234599. The final field, vendor account, is the account number that we have with the specific vendor. For this example, we will enter our Amazon Prime Account Number, which is 8877321. Now that we've completed populating the purchase order form, right-click on the form header to save it.
Creating the Purchase Order Line Items
You'll now see that we have three new related lists towards the bottom of the form. In the first one, purchase order line items, this related list is used for creating the purchase order line items that will be included in this PO. In the next related list, assets, this related list will display the assets that have been received and created in the system upon receiving them through this PO. The final related list, receiving slips, will display all of the receiving slip records that have been generated for this purchase order. A receiving slip is basically a record that documents when and who received the assets relating to this purchase order; typically you'll have one receiving slip for a purchase order, but if the goods are delivered over multiple shipments then you'll have multiple receiving slips.
Now that we've covered these three related lists, let's go ahead and create the purchase order line items for this PO. We start by clicking on the new button, and a blank purchase order line items form will now load. In the vendor field, we are going to enter Amazon and in the product model field, we are going to enter Apple 15-inch MacBook Pro. You'll notice that when we selected the vendor and the product model that the list price and cost fields were auto-populated with values. The reason for this is that for the hardware model module, you have vendor catalog items, and for this particular model, there is a vendor catalog item created for Amazon with the list price and cost defined. This feature is pretty nifty, because it will always populate the form when ordering an item from a vendor where a vendor catalog item is defined.
In the next field, product catalog, this field allows you to select the product catalog which this purchase order line item relates to. For demo purposes, we are going to leave it blank. Next, we have the part number field; here you can define the exact part number of the product you're ordering from the vendor. For this example, we are going to enter MV912LL/A. In the next field, request line, this field allows you to select the requested item record in which this purchase order derived from; since we are creating this PO from scratch, we are going to leave this field blank. Next, we have the expected delivery field; in this field, we are going to select a date during next week. Now that we've completed filling in this purchase order line items form click on the submit button to create this record.
Ordering a Purchase Order
The purchase order is now ready to be ordered; click on the order button. You'll notice that the status of the purchase order has changed to ordered. Now we have an option under the related links section for creating the hardware assets prior to delivery. Some organizations like to create the assets included in a purchase order before they're delivered so they have visibility in the system; whereas some organizations like to wait until they have the assets in hand. For demo purposes, we are going to wait until we receive the purchase order to create the assets.
Receiving the Assets and Making Changes
The next step in the purchase order process is to receive the assets; to do this click on the receive button. You'll now be navigated to a receive purchase order screen. From this screen, you can see the assets you are receiving, the remaining quantity, the unit cost, the receiving quantity, the receiving stockroom, and you also have the option to reserve the asset for an individual if needed. For today's demo, we are happy with all of the values that have been pre-populated in these fields, but if anything did change between submitting the PO and now, you can make those changes. A good example of this could be if the ordered quantity was increased or the receiving stock room was changed.
You'll also notice there is an icon next to the receiving quantity field; clicking this icon will display the capture asset tags modal, and from here you can enter an asset tag, serial number, and a user that this particular asset is reserved for. For demo purposes, we are going to enter some random values into these fields; if this was a real-world scenario this would be the perfect time to scan the asset and capture these values into ServiceNow. Now that we have entered these values, click on the done button, and click on the submit button. You'll now see that the status of the purchase order has changed to received and all of the fields are read-only. In the assets-related list, you can see the asset was automatically created for this purchase order.
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