Set up purchase order approval levels

The purchase order (PO) approval levels feature lets you limit PO totals for users. When you enable approval levels, the program adds the PO Estimate field to POs. If a user creates a PO with an estimate that exceeds their approval limit, the PO is placed into Pending status. A user with a qualifying approval level can then approve or reject the PO.

For more information on setting purchasing and approval level options, see Application Options: Purchasing.

Set Require PO Approval Levels to YES

  1. Go to Menu > Setup > Options > Application Options. The Application Options page opens.

  2. In the Category pane, expand Purchasing. The list of Purchasing options opens.

  3. Select Approvals. The Options pane displays a list of options.

  4. Set Require PO Approval Levels to YES.
    Note: This option applies to standard POs only. If you want to apply approval levels to vendor POs, you must set Require VRO/PO Approval Levels to YES. You can set these two options independently.

  5. Select Save.

When you turn on approval levels, all POs in process (that is, that are not complete, closed, or canceled) are set to Approved.

Set Allowed Cost Overage amount

Allowed Cost Overage is a child option under Require PO Approval Levels. The setting defaults to 0%, meaning the program will not allow any overage beyond the approved PO estimate amount. You can enter acceptable cost overage as a percentage.

You must set Require PO Approval Levels to YES before you can set Allowed Cost Overage.

  1. Go to Menu > Setup > Options > Application Options. The Application Options page opens.

  2. In the Category pane, expand Purchasing. The Options pane displays a list of options.

  3. Do one of the following to set an overage percentage:

    • Click in the Allowed Cost Overage field and enter a value. Select the arrows next to the Allowed Cost Overage field to change the value up or down.

  4. Select Save.

For more information, see About Cost Overage warnings.

Set other User and Application Options

Other options can affect PO approvals. This section reviews those options and tells you how to use them.

The options are:

  • Show Pending PO Number when PO Status is Pending
    This setting controls how the system displays the PO number when the PO is in a Pending status:

    • If set to NO, the program does not show the PO number until the PO is approved. The program shows a series of number signs (########) instead of the purchase order number. This is called masking.

    • If set to YES, the system shows the PO number upon order creation.

      Menu path: Setup > Options > Application Options > Purchasing > Show Pending PO Number when PO Status is Pending

  • Allow User to Receive POs
    This setting controls whether the user can receive POs:

    • If set to NO, the user cannot receive POs.

    • If set to YES, the user can receive POs.

      Menu path: Setup > Options > User Options> (Select User) > Purchasing > Receiving > Allow User to Receive POs

  • Allow User to Close POs
    This setting controls whether the user can close POs:

    • If set to NO, the user cannot close POs.

    • If set to YES, the user can close POs.

      Note: Both the Allow User to Receive POs and the Allow User to Close POs options let you structure the separation of duties required by Sarbanes-Oxley.

      Menu path: Setup > Options > User Options> (Select User) > Purchasing > Receiving > Allow User to Close POs

About Cost Overage warnings

After you turn on Allowed Cost Overage, a warning appears when users change the PO estimate through adding lines to the PO. The warning text changes based on the overage total. For example, if the new estimate total is:

  • Below your approval level amount but above the allowed cost overage amount: The window shows the warning, "New Order Total is above the Estimated Amount. Do you want to update the Estimated Amount?" Selecting YES will update the PO Estimate amount to a total that includes the addition of the new line. Since the PO total is still below your approval level, the PO will remain in Approved status.

  • Above your approval level amount and above the allowed cost overage amount: The window shows the warning, "New Order Total is above the Estimated Amount. Do you want to update the Estimated Amount?" Selecting YES will update the PO Estimate amount to a total that includes the addition of the new line. The order will be moved to Needs Approval status and will require approval again by a user with a higher approval level.

  • Above your approval level amount but below the allowed cost overage amount: No warning is displayed and lines may be added and received at a value within the allowed cost overage amount of the approved PO estimate.

Review these two examples to see how these options work.

Example 1:

  • Require PO Approval Levels is set to YES.

  • Approved Cost Overage is set to 10%.

  • Your approval level amount is $200.

  • The PO’s approved estimate is $100.

The current PO total is $100. The 10% cost overage setting means the maximum approved amount is $110.

  • Scenario 1:
    You add a $5 tax line. The program lets you save your change because $105 is less than $110.

  • Scenario 2:
    You try to add a $15 freight line. The warning window opens with the message "New Order Total is above the Estimated Amount. Do you want to update the Estimated Amount?" Selecting YES will update the PO Estimate amount to a total that includes the addition of the new line. Since the new PO total of $115 is still below your approval level of $200, the PO will remain in Approved status.

Example 2:

  • Require PO Approval Levels is set to YES.

  • Approved Cost Overage is set to 10%.

  • Your approval level amount is $50.

  • The PO’s approved estimate is $100.

The current PO total is $100. The 10% cost overage setting means the maximum approved amount is $110.

Scenario:
You try to add a $15 freight line. The warning window opens with the message "New Order Total is above the Estimated Amount. Do you want to update the Estimated Amount?" Selecting YES will update the PO Estimate amount to a total that includes the addition of the new line. The order will be moved to Needs Approval status and require approval again by a user with a higher approval level.