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Purchase Order Definitions

Back to Browse Topics - > Purchase Order

Cancelling a PO Line

Once a Purchase Order is approved and submitted to the Supplier, there may be a legitimate business reason to Cancel one or more Lines of the Approved Purchase Order. Below are the authorized procedures to process a Purchase Order Line Cancellation. For more information see: http://www.purchasing.upenn.edu/buytools/po-cancellation-procedure.php

Note: Purchase Order Lines (s) can only be Cancelled if:

  • Purchase Order has been Approved
  • Purchase Order Line(s) have not been Receipted OR Invoiced

Possible reason(s) for Cancelling a Purchase Order Line are:

  • Product or service no longer needed
  • Duplicate purchase order created for item
  • Supplier notified item discontinued

1. If the product(s) has not been shipped:
The PO Manager must inform the Supplier that the product(s) is not required, that they are not to ship the product(s), and that a formal Purchase Order Cancellation will be issued and transmitted to the Supplier. It is recommended that details related to the call to the supplier be documented in the "Notes" section of the PO (reason for cancellation, date of call, supplier contact name, etc.) for future reference.

2. If the product(s) has been shipped:
A Purchase Order Line cancellation is not allowed. In this case, resolution must be addressed via a Return Goods Authorization (RGA) and supplier credit memo. The invoice for the shipment must be paid and the supplier credit will offset the invoice that was issued upon shipment of the product(s) by the supplier.

3. If the supplier receives POs via EDI:
A Purchase Order Line cancellation is not allowed. In all cases, resolution must be addressed via a Return Goods Authorization (RGA) and supplier credit memo. The invoice for the shipment must be paid and the supplier credit will offset the invoice that was issued upon shipment of the product(s) by the supplier. Because the order entry and processing is immediate on the supplier side when using EDI, there is no viable way to prevent a shipment from being queued. Additionally, many of our EDI suppliers ship overnight and the speed with which the order filled and packaged for shipment makes them virtually impossible to intercept for cancellation. Please follow link below for EDI Supplier List:

http://www.purchasing.upenn.edu/buytools/edi.php

To Cancel a Purchase Order Line(s), go into PO Manager responsibility:

  • Select Purchase Orders> View/ Control PO
  • Enter the PO#
  • Select FIND
  • Click on LINES
  • Place your cursor on the line you would like to cancel
  • Select Tools> Control from the menu bar
  • Select Cancel PO Line from the Actions box
  • Enter the reason the cancellation is required and a note to the supplier
  • Click OK

The issuance of a formal Purchase Order Cancellation will terminate the legal obligation to the supplier for the product(s) on the purchase order

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