Close a purchase order

You might want to close purchase orders because they will not be filled. A purchase order might have expired, or you partially converted a purchase order and realize you'll never use the remaining quantity of the items in the purchase order.

The best practice to close out obsolete purchase orders is to create and use a workflow where the purchase order can be converted into a close-out purchase order. The workflow completes the processing of the purchase order, leaves an audit trail, and prevents it from potentially being reopened and converted.

1. Set up a close-out purchase order workflow

The close-out purchase order transaction definition needs to be created only by conversion from the source purchase order and configured to reverse any inventory or posting effect of the source purchase order.

While the following steps describe the close-out workflow in terms of partially converted purchase orders, the steps are also applicable to purchase orders that have yet to be converted but have expired.

  1. Create a close-out purchase order transaction definition with the following settings.

    Close-out sales order transaction definition field values Close-out purchase order transaction definition field values
    Field Required value
    Template name

    Specify a name that will make it apparent to your users that this purchase order is for closing out purchase orders that will no longer be used.
    Template type Order
    Inventory totals

    If Inventory totals are specified on the source purchase order, define the opposite inventory total effect here. For example, if the source purchase order increases ONORDER quantity, define this transaction definition to subtract ONORDER quantity.
    Transaction posting

    Select the same posting option as the source purchase order.
    Transaction conversion: Can be created from

    Select the source purchase order here.
    Posting configuration

    If the source sales order has the transaction posting set to either General Ledger or Accounts Payable, define the opposite account mapping here. For example, if the source transaction was set up to debit Account X and credit Account Y, define this transaction definition to credit Account X and debit Account Y.

    Security configuration: Create policy Convert only
  2. Set other transaction definition settings as applicable and save the transaction definition.
    Do not edit any other transaction definitions to allow them to be converted from the close-out purchase order. The close-out purchase order needs to be the last document in its workflow so that its state can be set to Closed.
  3. If the close-out purchase order affects inventory quantity, value, or both or posts directly to the GL, specify the same journals as the source purchase order in the Document configuration tab of the Configure Purchasing page.

2. Use a close-out purchase order

  1. In the applicable purchase order list, select Convert next to the purchase order to close out.

    A pop-up window appears and displays links to all transactions to which this transaction can be converted.

  2. Select the close-out purchase order.

    The close-out purchase order appears and displays all the data from the source purchase order.

  3. Do one of the following:

    • To close out the entire remaining purchase order, do not change any Quantity values.
    • To close one or more line items but leave some line items open, set the Quantity of the line items that you want to remain open to 0.
  4. Optional. If the close-out purchase order affects inventory quantities, has GL posting, or both, consider whether you need to change the transaction date, which will be the GL posting date.
  5. Select Post.

    The close-out purchase order list appears and displays the close-out purchase order with its state as Closed.