Creating PO for Outside Services

  • 4 April 2024
  • 4 replies

We are in the middle of implementation and I am writing a workflow for issuing Purchase Orders to Outside Process vendors for metal finishing (Ie: Powdercoating, Plating, etc),  however I am not certain that I am totally clear on the correct process. 

We have setup non-stock items to represent the outside processes.  These have been defined as a service, They have vendor(s) associated with them on the vendors tab and the default price as been set to $1.00.   

On the manufactured (stock) item I have defined a BOM and on the operation step for the outside service I have added the Non-Stock item (Powdercoat) to the BOM as a material.  The qty required has been set to the per-piece cost that I was quoted,  the Unit cost remains at $1.00, The material type has been set to “Sub Contract” and the Subcontract Source has been set to “Purchase”.  On the Outside processes tab I have also checked the “Outside Process” box and have selected the preferred vendor for this operation.  

I have then opened a production order for this manufactured (Stock) item and use the Create Purchase Orders Action fromt he ,  the system is not recognizing/honoring the vendor that is specfied in the production order menu,  however when the Create PO form opens, the system is not honoring the vendor that was previously defined on “Outsource Tab” of the BOM.      It appears the system is only looking at the “default” vendor defined on the Non-Stock item,  or it is leaving the field blank if the Non-Stock item does not have a vendor designated as default.  

This leaves me a with few questions:

  1. What is the purpose of defining the preferred vendor on the outside process tab of the BOM if the system doesn’t honor it.  
  2. Is my workflow for issuing PO’s for outside processes correct?  Is there a document that fully defines this process?  I have found documents that address parts of this process, but I am not certain that I have found something that covers the process start to finish…

Any help on this matter would be appricated. 

4 replies

Userlevel 7
Badge +2

@MattWSM - I have a couple of quick videos that I could send you. Send me an email. 

@Debbie Baldwin   Just sent you a email.



Thank you for sharing those videos,  that was very helpful.   I do have a few more comments/questions that I want to confirm my understanding:

  1. When the goods are being returned from the vendor it appears that there is no need for a Vendor Shipment Return.  If I understand correctly, the only transaction that is needed to get the goods back into the system is a “Move Transaction” from the Outside Processing Operation to the next Operation on the routing.  Is that correct?  Does creating a Vendor Shipment Return offer anything in this case? 
  2. When the PO is receipt is generated,  the receipt qty needs to be a $ amount, not the qty of goods being received.  This seems like this would be confusing to the receiving clerk as the packing list coming from the vendor would typically only have qty of goods being returned on it,  not $$.  Do you know how companies are handling this out in the wild?

I am trying to simplify the workflow related to outside services as much as possible, and cut down on the number of transactions our shipping/receiving team needs to make.   Any feedback on how others are handling this would be much appricated.  

Userlevel 7
Badge +2


  1. No need for Vendor shipment Return - it has no play in this process flow. You just need to do a move transaction. I’m not sure of your process but if materials are not backflushed you may also need to issue some materials at that operation. 
  2. PO receiving is not changed. I only set mine up that way so that I could issue the correct $$ to the production order. Maybe someone else can comment how they get the actual cost to the production order? 


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