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Purchase Order Cancellation Procedure

After an approved purchase order is transmitted to the supplier, there may be a legitimate business reason to cancel one or more lines of an approved purchase order or the entire order. The authorized procedures for canceling a purchase order and terminating the legal obligation to the supplier are listed below. (see EDI supplier exceptions listed below)

The University purchase order is a legal binding contract between the University and supplier. The University is obligated for the cost of the product(s) listed on the purchase order until such time as the purchase order has been canceled and the official notification has been sent to the supplier. Prior to canceling the purchase order or any portion thereof, the supplier must be contacted by the ordering department to determine if the product(s) has been shipped by the supplier to the University.

  1. If the product(s) has not been shipped, the purchaser 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, cancellation is disallowed. 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, 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. In some rare instances, it may be appropriate to cancel an EDI purchase order, but this should only be done with the permission of the supplier for such reasons as discontinuation of product. (see EDI Supplier List)

    All returns are subject to the supplier's formal return policy and may be subject to a nominal restocking charge. The supplier may refuse to issue a RGA and credit if the product(s) ordered is a special order or non-stock product(s).

    It is the responsibility of the purchaser to request the RGA, arrange for the pickup or shipment of product(s) back to the supplier, and track the credit to ensure receipt of credit in Accounts Payable to offset the supplier invoice.

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