How does an Invoice consume a PO?

How does an Invoice consume a PO?

Invoice Consumption of PO refers to the process of an invoice referencing and consuming one or more Purchase Orders (POs) during its creation.

Here’s how it works:

  • One Invoice can consume multiple POs: A single invoice can reference and consume multiple POs, depending on the items and quantities specified in each PO.

  • Partial or Full Consumption: An invoice can fully or partially consume a PO. If the invoice amount or quantity differs from the PO, only the corresponding portion of the PO is consumed.

  • Item Categorization:

    • Goods: For items marked as goods in the item master, consumption is tracked based on quantity (e.g., number of units).

Services: For items marked as services, consumption is tracked based on the amount (e.g., cost of service rendered).

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