Sales order-Purchase order

Question

Dear Friends,
Can any1 explain me the process or the cycle so that which triggers sales order and purchase order?.....the reason for this question is in one of the threads I read that purchase order will take reference as purchase requisition and purchase requisition will take SO as reference....then why in SO we declare PO no in the header?........probably there sud b a subtle reason which I cud not interpret.....Thanks in advance

Answer 1

Dear Saravanakumar
Think of this scenario
You are running a company  Your plant manufactures some products and sells to  your customer
Your customer X is ordering a product which you manufacture
For  customer X it is purchase and he places a PO with us to get the product
For Us it is a sales
That is why in our sales order for this customer X we mention his purchase order no for reference which is what you had asked?
Suppose if the customer X ask for a product which is not manufactured by us and even then we  can process this sales we procure these items from a third party vendor and sell to our customer
In this case upon receiving sales order from our customer system generates a PR and after some process PR is getting converted to  PO to our vendor to process this sales
Hope it is getting clear to you now
Third party means we are not manufacturing the product we procure from a vendor who is actually a third person (logically) and sells
In Third party sales we receive the order from our customer
In Normal third party process vendor will supply goods to our customer and he will give us the invoice then we will bill our customer
In between us and our customer we are involving a vendor(third person) here to complete the sales process hence it is called third party sales
Regards
Raja