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As a Customer What would do to keep your ERP Implementation intact
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  #1  
Old 10th March 2008, 12:16
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PO Approval Problem
Baan: Baan IVc4

Dear All Guru's

We want to add one more step in the Maintain Purchase Order Steps, Maintain Approval for Quality Checking. Our PPC Deptt. wants that if any qty. rejected by the Quality Person, then that qty. direct in the rejection warehouse automatically. And commercial person Invoice that qty in favour of Supplier.

But, in our system when we make approval the qty goes on to the back order quantity.

1. How, we invoice that material which was at the stage of Back Order.
2. Are we use step Maintain Cenvat Receipt before Maintain Approval.

Please suggest how we solve this problem and use another step in our Purchase Order Process.

Thanks in advance

Dksharma
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  #2  
Old 11th March 2008, 07:37
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Dinesh,
Just to understand the business process behind this, Do you accept the rejected quantities of an item or you return it to the supplier?

sk
  #3  
Old 11th March 2008, 08:20
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Hi SK,

Actually rejected material sent back to the supplier through Invoice. As per Excise Rule when we accepted the Material or Material inside our Factory in that position we invoiced that Rejected material to the supplier.

In present scenerio, we accept all material. If, found any rejection qty in that we invoiced that to supplier.

But we wants to add a new step (Quality Approval) in the Maintain Purchase Order Steps. in This situation the system create a Back order and only ok material shall be add in the warehouse inventory.

The Problem is how we sent back the material to supplier. I think there are two way for this

1. Invoicing

2. Subcontracting or Jobwork

But in both conditions we require rejected material in any warehouse.

Please suggest, is it possible and How.

Thanks in advance

Regards

Dksharma
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  #4  
Old 11th March 2008, 11:10
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tdpur4121m000

Dear Mr.Dinash,

Please make a rejection code at the time of rejection in session tdpur4121m000 and print return note session tdpur4411m000.Rejection qty.have showing as a back order qty only.

We hope r u cleared.

thanks

S.K.Gupta
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  #5  
Old 11th March 2008, 12:49
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Hi,
I am not aware of any process (standard) that automatically transfers the back order quantity to a warehouse. You would have to comit an inventory transfer from the receiving warehouse to the rejection warehouse to move the rejected stock. Using a Rejection Code would give a meaning to the rejection but the quantity is not moved anywhere to my knowledge.

If you want to invoice the supplier as well as deliver the quantity from the rejection warehouse to the supplier, then you could create a sales order in the name of your Supplier (a customer code needs to be created in their name and linked to the Supplier's supplier code).

thats what i could think of..

sk
  #6  
Old 12th March 2008, 04:23
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Hi SK,

If we make a Sales Order, is it possible that the back order qty. attached to the Sales order. I think it is not possible. If warehouse have no inventory for that item, how we make delivery.

Sir, Please suggest any work around for that.

Thanks

Dksharma
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  #7  
Old 12th March 2008, 06:57
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Dinesh,
I guess you didnt read my post completely.. So here it is again..
After receiving the goods into your standard warehouse, you create a transaction in Warehouse Inventory with transaction type "Inventory Transfer" (with probably a reason code that would help explain to finance why such a transfer) and transfer the rejected goods from your standard warehouse to the rejection warehouse. Once this is done, you could create a sales order with the rejected quantity against the suppliers name (a customer code can be created and linked to the supplier code) and then invoice the order.

This way proper documentation is done and your transaction would show rejected goods delivered from your rejection warehouse...

sk
  #8  
Old 12th March 2008, 07:48
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Sir,

I understand what you says, but our PPC deptt wants to if consignment is came it is also approved by the quality department in the ERP system.

Problem is that if QA Person is Approved Fifty persent of Consignment qty. in that situation the approved Qty is added in the main warehouse and not approved qty. is gone in BackOrder Qty.

Eg. if consignment is 1000 kgs. We receipt the 1000 kgs, but at the stage of QA approval, they approve only 600 qty. This 600 kgs is addd in our inventory and balance 400 is shows in backorder qty. We Consume 600 Kgs issued to the Production Deptt. Here the system inventory is ZERO, but Physical stock is 400 kgs.

If we wants to invoicing the 400 kgs to supplier, then there was no sufficient inventory in the warehouse of REJECTED MATERIAL for invoicing.

Before QA Approval the qty is showed at the position on Inventory On Hold. Only QA approved qty is added in the inventory and balance transfered to the BACK ORDER QTY.

Am I right or wrong. Please guide.

Thanks

Dksharma
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  #9  
Old 12th March 2008, 09:15
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Citing your example,
The 400kgs that gets rejected will go and sit in your back order as you said untill some action is taken on it. The action involves either writing it off or recieving them. You can treat the back order like an interim warehouse that sits between you and your supplier. Its not yet yours to use. So unless you receive them (into your warehouse), how can you invoice them? At this stage the only thing you can send the supplier is the Return Notes for the 400kgs.

Hope i am clear..

sk
  #10  
Old 13th March 2008, 05:13
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Hi SK,

Thanks for your quick response.

Yes, I understatnd. But a little problem is that the material is exciseable. If we return to the supplier we must be charged the excise duty for returnable goods. Because the material is in our premises.

Due to Excise claim, the invoicing is necessary for removal of goods from one premises to other. As per my knowledge there is only two document for return the material
1. Invoice
2. 57F(4)

if, we issue a debit/ Rejection note to spplier for rejected material. In that situation he is not authorised to claim the Excise Duty.

As per your suggestion
At this stage the only thing you can send the supplier is the Return Notes for the 400kgs.

As per excise rules he can't claim the excise duty on the basis of RETURN NOTES.

Dksharma
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  #11  
Old 13th March 2008, 05:41
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Hi Dinesh,
I am not much familiar with Excise rules, but I think excise claim is permitted for purchase returns.
If you are using location control/ lot control, approve the all recieved qty as per system, but when you r posting to inventory post separately for accepted lot & rejected lot. (accepted location / reject location) may be in the same warehouse.
Create a Purchase return order, where i think you can do the excise claim. I think you can raise a Excise Invoice also for this (I am not sure). I hope this can be a work around for you.

Regards,
  #12  
Old 13th March 2008, 06:39
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Hi Dear,

We have not been using the Lot control & Location control. But for invoicing, it will be required a sales order, Delivery. If rejected material is not goes to any warehouse how we delivered the material.

Quality Deptt is not approved all qty. in that position how we return the material to the supplier.

regards

dksharma
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  #13  
Old 13th March 2008, 07:25
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Baan: Baan 4c, Infor LN 10.4 - DB: Oracle 12c, SQL Server 2000, 2008, 2012 - OS: RHEL 6, Windows 2003, 2008
Dinesh,
The need of the hour is to invoice the supplier. What you have is your rejected items that sits in your back order quantity field. In Baan, i dont think you can invoice back orders. I am not familiar with the excise law but then i hope they dont interfere with internal transactions within the company. So then keeping all that in mind, to invoice the supplier, i can think of the following two ways..
So the two ways are...
If the QA wants to reject the material in Baan...
1) You write off the back order quantity.. (After rejecting, put the back order qty to 0 in Maintain Receipts)
2) Carry out an Inventory Adjustment with a reason code that hits one of your pre-defined ledger account for rejected materials. When you do this, do the adjustment in Rejected Warehouse. (This brings the rejected items into your rejected warehouse)
3) Invoice the supplier using a sales order by delivering the rejected items from the rejected warehouse.

If the QA agrees it wont do the rejection of the material in Baan
1) Receive all the quantity (even the rejected items)
2) Carry out an inventory adjustment (recommended...as you could use a reason code) or an inventory transfer to transfer the materials from standard warehouse to rejected one.
3) Invoice the supplier using a sales order by delivering the rejected items from the rejected warehouse.

Hope this helps..

sk
  #14  
Old 13th March 2008, 07:53
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DineshSharma DineshSharma is offline
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Hi SK,

Thanks, you are right. We use this process in our system.

Regards

Dksharma
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