To process purchase activities for commodity items, identify your vendors as commodity vendors. The commodity settings assigned to a vendor determine how purchased commodities are received and invoiced.
Commodity vendor types
Specify vendor commodity settings on the Receiving FastTab of the vendor card. To identify a vendor as a commodity vendor, assign one of the options in the Commodity Vendor Type field. There are three commodity vendor types:
Producers are vendors from whom you buy commodities. When you set up a commodity manifest to receive commodities, indicate the producers whose goods are included in the manifest, along with the quantity purchased from each producer. When a purchase order is created from a commodity manifest, the producer is entered as the buy-from vendor. If no broker is specified on the commodity manifest, the producer is also entered as the pay-to vendor.
Brokers are vendors who facilitate purchases between you and commodity producers. When a purchase order is created from a commodity manifest with an assigned broker, the broker is entered as the pay-to vendor.
Haulers are freight vendors who deliver commodities from producer locations to your company facilities. When a commodity manifest with an assigned hauler is posted, a purchase order is generated for that hauler. The lines on this purchase order are the delivery charges calculated for each purchase on the manifest.
When you work with commodity features such as commodity manifests and the Suggest Commodity Advance Payments batch job, you can only enter vendors that have an assigned commodity vendor type. You cannot process commodity transactions for a vendor not identified as a commodity vendor.
Assigning a commodity vendor type to a vendor does not prevent you from using that vendor in activities unrelated to commodities. For example, you can create standard purchase orders or enter payment journal lines for commodity vendors.
Invoicing frequencies
Indicate the frequency with which a commodity vendor is invoiced in the Commodity Invoicing Frequency field. The selection in this field determines how the program creates new purchase orders from a posted commodity manifest. There are three commodity invoicing frequencies:
Manual: a new purchase order is created on your instruction. If a commodity manifest is posted for a vendor with a manual frequency and no commodity purchase order currently exists for that vendor, the program creates a new order. When subsequent commodity manifests are posted for the vendor, additional purchase lines are added to the existing order. This continues until you instruct the program to stop adding lines to the existing order by opening the purchase order and selecting the Commodity Receiving Complete field on the Commodities FastTab.
Manifest: a new purchase order is created with every commodity manifest. If a commodity manifest is posted for a vendor with a manifest frequency, the program creates a new order, regardless of whether additional commodity purchase orders already exist for the vendor.
Monthly: a new purchase order is created for every month in which a commodity manifest is posted. If a commodity manifest is posted for a vendor with a monthly frequency and no commodity purchase order currently exists for that vendor in that month, the program creates a new order. When subsequent commodity manifests are posted for the vendor in the same month, additional purchase lines are added to the existing order. When a commodity manifest is posted for the vendor in a new month, a new purchase order is created.
Advance payments
The cost of a purchased commodity is often not known at the time of receipt. Commodity costs are typically determined by an outside agency and fluctuate on a periodic basis. A company may not obtain the value at which a commodity should be costed during one period until after that period ends. For example, it may not be until the middle of a month that a company receives the published costs that apply to commodity activity from the previous month.
Because the period between receipt and payment for a commodity can be significant, a commodity vendor may request an advance payment for purchases. Indicate that a vendor is eligible for advance payments by selecting an option in the Commodity Advance Payment field. A vendor's advance payment can be either a flat amount that remains fixed from period to period or a calculated quantity determined from the most recent cost data in the system. Leave this field blank if you do not want the program to suggest advance payments for the vendor.