Commodity Vendors

In order to process purchase activities for commodity items, you must identify your vendors as commodity vendors. The commodity settings that are assigned to a vendor determine how purchased commodities are received and invoiced.

Commodity Vendor Types

Vendor commodity settings are specified on the Receiving FastTab on the vendor card. To identify a vendor as a commodity vendor, you assign one of the options in theCommodity Vendor Type field. There are 3 commodity vendor types:

• Producers are vendors from whom you buy commodities. When you set up a commodity manifest to receive commodities, you indicate the producers whose goods are included in the manifest, along with the quantity you 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 has been 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 that have been 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 can not process commodity transactions for a vendor that has not been identified as a commodity vendor.

Assigning a commodity vendor type to a vendor does not prevent you from using that vendor in activities that are not specific to commodities. For example, you could create standard purchase orders or enter payment journal lines for commodity vendors.

Invoicing Frequencies

You indicate the frequency with which a commodity vendor is invoiced in the Commodity Invoicing Frequency field. The selection in this field determines the manner in which the program will create new purchase orders from a posted commodity manifest. There are 3 commodity invoicing frequencies:

• Manual - a new purchase order is created upon the user's 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 will create a new order. When subsequent commodity manifests are posted for the vendor, additional purchase lines will be entered on the existing order. This will continue until the user instructs the program to stop adding lines to the existing order by opening the purchase order and placing a check mark in 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 will create 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 will create a new order. When subsequent commodity manifests are posted for the vendor in the same month, additional purchase lines will be entered on the existing order. When a commodity manifest is posted for the vendor in a new month, a new purchase order will be created.

Advance Payments

Oftentimes that the cost of a purchased commodity is not known at the time of receipt. Typically, commodity costs are determined by an outside agency. These costs also fluctuate on a periodic basis. As a result, a company may not obtain the value at which a commodity should be costed during one period until after that period has ended. For example, it may not be until the middle of a month that a company receives the published costs that should be applied to commodity activity from the previous month.

Because the period of time between the receipt and payment for a commodity can be significant, a commodity vendor may request an advance payment for purchases. You can 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 which is determined from the most recent cost data in the system. You can also leave this field blank if you do not want the program to suggest advance payments for the vendor.