(06.24.01-00) Applying a PO Policy

Content was last updated in 06.23.05-00

Multiple PO policies can be defined using different criteria like Site(s), Department, Applicable to.

Depending on — 'Who is creating a PO', 'Where it is being created', and 'of what amount it is', an appropriate policy will be applied to it.

And furthermore, depending on the Approval Policy being applied, each specific PO will have to be approved by a set of assigned approver(s). And some of these approver(s) might be mandatory.

Now that we have learnt that approval on a PO depends on PO Approval policy, let's understand how these are defined.

PO Approval Policy definitions

1. All header parameters are defined

This is the most advanced level of PO definition, where all parameters - 'PO Type', 'Site', 'Department', and 'Applicable To' is specified.

This PO definition implies that this PO Policy will be applicable to a PO of 'Inventory' type, raised from 'Only the mentioned Site', raised by 'Specified Department' and was submitted by 'Shaun Parker'.

2. 'PO Type', 'Site(s)', and 'Department' are defined

Further advancing from the previous PO definition,  In this example, along with PO type, 'Site', even the 'Department' has been defined..

Only the 'Applicable to' filed has been left blank, which implies that this PO Policy will be applicable to purchase order of 'Inventory type', raised from 'Only the mentioned Site', raised by 'Specified Department' and was submitted by 'Any Employee'.

3. 'PO Type' and 'Site(s)' are defined

Advancing from the previous PO definition, In this example, along with PO type, even the 'Site' has been defined..

The fields - 'Department', and 'Applicable to' have been left blank, which implies that this PO policy will be applicable to a 'Inventory type' PO- raised from 'Only the mentioned Site', raised by 'Any Department' and submitted by 'Any Employee'.

Similar to the previous PO rule definition here as well, depending  on the PO amount, the PO approval may have to pass several individual levels of approvals; some of which are mandatory.

4. ONLY 'PO Type' is defined

Now, let's use the above defined PO Policy definitions to analyze a PO and trace 'How would it go through the approval chain".

Approval/ Rejection Case Studies

How a PO gets Successfully Approved?

Let's consider an example of a PO, where all the core parameters have been specified and the PO amount is 18,800

Now when such a PO is submitted for approval, based on the policy definitions the Approval Policy Definition #1 will be applicable.

Because, when the approvals begin, the overall tracking of the 'Approvals' tab in PO window will be as follows, as the first level itself is mandatory, and system won't proceed until first level is cleared.

Once the 'Order PM' has approved the PO, the 'Approvals' tab in PO window will be as follows:

At this point, Let's say, if the 'Sales Manager' provides the approval even before the Employee 'James Dunn' does, system will 'Auto Approve' Level 1 on behalf of Employee 'James Dunn'.

Since a higher level has already been approved, any pending lower level(s) will gets Auto Approved. 

Next, the responses from 'Procurement - Senior Manager' was an Approval.

Now the 'Approvals' tab in PO window will be as follows:

Lastly, the approvals from 'Finance Director' and 'Finance Senior Director' arrive, and the final tally of 'Approvals' tab in PO window will be as follows:

Though approval for Level 5 came earlier, but since Level 4 is a Mandatory level it will NOT get 'Auto Approved' and R2 waits for it and logs it as a usual approval.

Since the last level is approved the final status of PO is 'Approved'.

How a PO gets Rejected?

Let's consider the same example, where all the core parameters have been specified and the PO amount is 18,800

Now when such a PO is submitted for approval, based on the Policy definitions the Approval Policy Definition #1 will be applicable.

When the approvals begin, the overall tracking of the 'Approvals' tab in PO window will be as follows:  

As the first level itself is mandatory, and system won't proceed until first level is cleared.

Once the 'Order PM' has approved the PO, the 'Approvals' tab in PO window will be as follows:

At this point, Let's say, if the 'Sales Manager' Rejects the PO even before the Employee James Dunn' does.

System will log Level 1 as an approval and Level 2 as Rejection.

Now the 'Approvals' tab in PO window will be as follows:

Since the 'Position' Manager rejects the PO, the 'Final Status' of the PO becomes 'Rejected'.

 When a lower level is Rejected, all the subsequent higher levels, irrespective of being Mandatory or Optional will get 'Auto-rejected'.