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Procurement · Guide 10

Purchase Agreements

Purchase agreements define longer-term pricing, quantities, and spending ceilings with a supplier.

  • Purchasing and finance teams
  • Updated

In this guide

Workflow

Draft -> Active -> Released to draft POs
      -> Closed / Expired / Cancelled

Creating an Agreement

  1. Go to Agreements -> Create.
  2. Select supplier, title, terms, validity dates, currency, and an optional ceiling.
  3. Choose whether the ceiling is including tax (gross) or before tax (net). The release is blocked before saving if it would exceed the remaining ceiling.
  4. Select the agreement tax group, then add line descriptions, committed quantities, and tax-exclusive unit prices. A line may use another tax group or have no tax.
  5. Review the estimated subtotal, tax, and total. These use current rates; final tax is calculated when each release creates a PO.
  6. Save as Draft, or activate once the terms have been reviewed.

Activating and Releasing

  1. Activate the agreement when it is ready for operational use.
  2. Open the agreement and click Release to PO.
  3. Select lines and quantities. Prices, descriptions, currency, and tax terms come from the saved agreement; change them through an agreement amendment first.
  4. SikaBooks creates a draft PO linked to the agreement release and records the agreement revision, subtotal, tax, and total.
  5. The PO still requires approval before it can be sent or received.

Draft agreements may be edited directly. Active agreements require an amendment reason and keep a before/after revision record. Issued POs retain their original terms; later revisions affect future releases only. After the first release, supplier, currency, and ceiling basis cannot change. A supplier invoice with different tax treatment or amount is flagged for matching review rather than silently accepted.

Draft or Active agreements can issue releases while capacity remains. The recommended operating control is to activate the agreement before routine releases, but the current workspace allows a draft agreement to release if the user has release permission and the agreement still has remaining quantity or ceiling capacity.