Managing a Contract Purchase Order with Multiple Vendors

Overview

Organizations may have a single contract with a total approved value that will ultimately be paid to multiple vendors. For example, an organization may have a $2 million contract but receive invoices from several different vendors throughout the life of the contract.

Microix can accommodate this by creating a single purchase order using the Unassigned vendor and then issuing invoices to the actual vendors as payments are required.

The appropriate process depends on whether your organization uses the MIP Encumbrance module.

Option 1 – Using the MIP Encumbrance Module

If your organization uses MIP Encumbrance to encumber contract obligations, create a purchase order for the full contract value and break down the amount using the appropriate expense coding.

Use Unassigned as the vendor on the purchase order. This allows the purchase order to represent the overall contract obligation rather than an obligation to one specific vendor.

The purchase order is then transferred to MIP to establish the encumbrance.

As invoices are received:

1. Create the invoice in Microix for the actual vendor being paid using the "Encumbrance Button" to find the open encumbrance and create a payment request (Invoice)
2. Process the invoice for the applicable amount and assign the correct vendor
3. Continue this process as additional invoices are received from the same or different vendors. NOTE: Invoices can be issued to different vendors while still being linked to the same original encumbered purchase order.

Each invoice/payment reduces the remaining value of the purchase order and its associated encumbrance until the contract obligation has been fully depleted.

Example

A purchase order is created for a $2 million contract using the Unassigned vendor.

Invoices may then be processed as follows:

• Vendor A – $250,000
• Vendor B – $175,000
• Vendor C – $300,000
• Additional vendors/payments – remaining contract balance

Each invoice is issued to the appropriate vendor but linked back to the original $2 million purchase order.

Option 2 – Without the MIP Encumbrance Module

If your organization does not use MIP Encumbrance, you can still use a single Microix purchase order to manage and track the approved contract value.

Create a Microix purchase order for the full contract value, broken down by the appropriate expense coding, and use Unassigned as the vendor.

The purchase order remains in Microix until invoices are received for payment.

As vendors submit invoices:

1. AP or the requester opens the original purchase order.
2. Use the Partial Payment process to create an invoice for the amount being paid.
3. Assign the invoice to the actual vendor being paid.
4. Process the partial payment against the original purchase order.
5. Repeat the process as invoices are received from additional vendors.

Each partial payment draws down the remaining approved value of the purchase order. The invoices associated with the purchase order can be issued to different vendors.

Once the purchase order value has been fully depleted, Microix will close out the purchase order.