Lesson 3 of 6
Creating and changing purchase orders
9 min
The purchase order is Contoso's legal commitment to Lakeside Components. It is created with ME21N, changed with ME22N and displayed with ME23N, or in the Manage Purchase Orders app and its create flow. Whether it came from a requisition or was entered directly, a PO has the same structure.
Conditions: how the price is built
The net price on a PO item is calculated from conditions: a gross price (usually from the info record or contract), plus or minus discounts and surcharges, plus freight. The conditions tab on the item shows each step. Contoso's rotor PO shows a gross price of $42.00, no discount and a freight surcharge of $0.20 per unit, which matters at invoice time because freight can be invoiced separately.
| Condition | Source | Value |
|---|---|---|
| Gross price | Contract or info record | $42.00 per unit |
| Discount | Info record or contract | 0% |
| Freight | Info record | $0.20 per unit |
| Net price | Calculated | $42.00 (freight posted separately) |
The rotor PO's price build-up.
Delivery dates and schedules
Each item has a delivery date. If Lakeside delivers in several drops, the delivery schedule holds several lines (for example, 300 on the 18th and 200 on the 22nd). MRP sees each schedule line as incoming supply, so accurate dates matter for planning, not just for the warehouse.
Confirmations
A supplier confirmation (order acknowledgment or shipping notification) tells Contoso what the supplier will actually deliver and when. The item's confirmation control key decides which confirmations are expected and whether they are relevant to MRP and to goods receipt. If Lakeside confirms only 450 rotors for the 18th, the buyer and MRP should see it before the dock does.
- Day 0PO created and sent500 rotors due on day 10
- Day 1Order acknowledgmentLakeside confirms 450 on day 10, 50 on day 14
- Day 9Shipping notificationInbound delivery for 450 created
- Day 10Goods receipt450 received against the inbound delivery
- Day 14Second receipt50 received; item fully delivered
Changing a PO
POs change: quantities go up, dates move, prices are renegotiated. Change the PO in ME22N or the Manage Purchase Orders app. Each change is logged in the change documents. If the PO was already sent, a change usually triggers a new output so the supplier receives the update. If approval applies, a significant change (such as a higher value) can restart the approval. Once goods are received or invoiced, some fields can no longer be changed freely; the PO history explains why.
What would you do?
Lakeside confirms only 450 of 500 rotors for the 18th. Production needs all 500 that week. What should the buyer do first?
Purchase orders can also be subject to approval, separately from requisitions. Contoso approves POs above $25,000 through flexible workflow, and a PO waiting for approval cannot be output to the supplier. Testers should check both sides: an approved PO is sent, and an unapproved PO is held back. When the PO is created from an approved requisition, many companies skip PO approval below a threshold, because the spend was already approved at requisition level.
- POs have a header, items and item details; create with ME21N, change with ME22N.
- The net price is built from conditions such as gross price, discounts and freight.
- Delivery schedules and confirmations drive planning and receiving.
- Changes are logged, may trigger new output and re-approval; check PO history first.
Check your understanding · not graded
Lesson check
1. Which transaction changes an existing purchase order?
2. Where do you see how a PO item's net price is calculated?
3. What does a supplier confirmation tell Contoso?
4. What often happens when a PO already sent to the supplier is changed?