Vendor Order Rates

Vendor Order Rates This article explains how to use purchase order rates from a vendor in the supply chain management module Josh H

An Order Rate is the rate you purchase the inventory from the vendor. (It should be noted that this part of your reality is something that QuickBooks doesn't represent.)

Vendor Order Rates serve the following purposes:

  1. To reduce complexity when purchasing inventory at a different rate than it's consumed.

  2. To help you determine what the lowest per unit cost is.

  3. To help calculate the Total Cost on Purchase Orders or Bill Item

    • Qty x Unit Cost = Total Cost

  4. Helps determine the Avg Unit Cost for our Inventory Item for Job Costing.

An additional benefit of Order Rates is that they are associated with either a Purchase Order Item or a Bill item, so reporting could be done to see historically what certain Product (Rates) have cost over a period of time.

It should be noted that Order Rates are not required whenever you create PO's or Bills. You can simply select the first option in the list "Don't use Order Rate," which will disable the Order Qty and let you directly enter the Usage Qty manually.

To add a Vendor Order Rate, first navigate to the SCM module on the left, go to Vendors. Open up a Vendor and you will see a Order Rate tab to navigate to.

In the above short GIF you can see the list of inventory items that have order rates associated to them.

To first enter a new inventory item to add order rates onto, search for the inventory at the top, and select it and click the Assign Button

Then you will add your order rates according to the Name of the order rate, order rate amount, price, usage Qty.

You will see how arborgold can tell you the preferred method automatically by whatever has the lowest unit cost.

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