> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tetherdata.io/llms.txt
> Use this file to discover all available pages before exploring further.
# Transaction Types
> Understanding purchase orders, transfers, and production orders
# Transaction Types
Tether supports three main transaction types, each serving a different purpose in your supply chain.
## Purchase Orders
Purchase orders are orders placed with external suppliers.
### When to Use
* Buying products from suppliers
* Replenishing inventory from external sources
* Ordering raw materials for production
### Key Information
| Field | Description |
| ------------------------- | ---------------------------- |
| **Supplier** | Who you're ordering from |
| **Destination Warehouse** | Where items will be received |
| **Line Items** | SKUs and quantities to order |
| **Unit Cost** | Price per unit |
| **Lead Time** | Expected delivery time |
### Purchase Order Workflow
When a purchase order is submitted, Tether creates a **Purchase step** to track the supplier fulfillment, followed by a **Shipment step** when a Shipping Plan is created to move goods to your warehouse.
```
Draft → In Progress (Purchase Step: In Process → Completed Purchase)
→ Shipment Step: In Transit → Completed Shipment
→ Completed
```
### Steps in a Purchase Order
| Step Type | Inventory States | What Happens |
| ------------ | ------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Purchase** | In Process → Completed Purchase | Tracks supplier order progress. No warehouse inventory changes until shipment. When completed, inventory is added to sellable at the supplier's linked warehouse. |
| **Shipment** | In Transit → Completed Shipment | Created when a Shipping Plan artifact is submitted. Subtracts inventory from source, adds to "Awaiting In-Transit" at destination. On completion, moves to sellable at destination. |
### Cost Tracking
Purchase orders track costs through artifacts:
* Unit costs per SKU (on line items)
* Shipping and freight costs (artifact-level cost items)
* Duties, tariffs, and taxes (artifact-level cost items)
* Total order value
The **Analysis** tab shows planned vs. reported cost variance once the transaction is in progress.
## Transfer Orders
Transfer orders move inventory between your warehouses.
### When to Use
* Rebalancing inventory across locations
* Sending stock to fulfill demand elsewhere
* Consolidating inventory
* Moving to a different storage location
### Key Information
| Field | Description |
| ------------------------- | ------------------------------- |
| **Source Warehouse** | Where items are coming from |
| **Destination Warehouse** | Where items are going |
| **Line Items** | SKUs and quantities to transfer |
| **Lead Time** | Transit time between locations |
### Transfer Order Workflow
When a transfer order is submitted, Tether automatically creates a **Shipping Plan** artifact and a **Shipment step**. All inventory immediately enters the "In Transit" state—there are no intermediate picking steps.
```
Draft → Submitted (auto-creates Shipping Plan + Shipment Step)
→ In Progress (Shipment Step: In Transit → Completed Shipment)
→ Completed
```
Unlike purchase orders, transfer orders create a Shipping Plan automatically on submission. The full quantity immediately enters "In Transit" status.
### Steps in a Transfer Order
| Step Type | Inventory States | What Happens |
| ------------ | ------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Shipment** | In Transit → Completed Shipment | The only step type for transfers. On creation, subtracts inventory from source warehouse sellable and adds to "Awaiting In-Transit" at destination. On completion, moves to sellable at destination. |
### Inventory Impact
Transfer orders affect inventory at both locations immediately on submission:
**Source Warehouse:**
* Sellable inventory subtracted when submitted (enters In Transit)
**Destination Warehouse:**
* Added to "Awaiting In-Transit" when submitted
* Moved to sellable when shipment is completed
If the source warehouse does not have sufficient sellable inventory at submission time, the submission is blocked with an error.
## Production Orders
Production orders are for internal manufacturing.
### When to Use
* Manufacturing finished goods from components
* Assembling kits or bundles
* Converting raw materials
* Any internal production process
### Key Information
| Field | Description |
| ---------------- | --------------------------------- |
| **Produced SKU** | What you're making |
| **Components** | Raw materials/parts needed |
| **Quantity** | How many to produce |
| **Warehouse** | Where production occurs |
| **BOM** | Bill of Materials defining inputs |
### Production Order Workflow
When a production order is submitted, Tether creates a **Production step** that tracks both the finished goods being produced and the components being consumed.
```
Draft → In Progress (Production Step: In Production → Completed Production)
→ Completed
```
### Steps in a Production Order
| Step Type | Inventory States | What Happens |
| -------------- | ------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Production** | In Production → Completed Production | Tracks manufacturing progress. Components are committed (subtracted from sellable) and consumed during production. Finished goods are added to sellable at the source warehouse on completion. |
**Component inventory states** (tracked within the production step):
| State | Description |
| --------------- | ---------------------------------------------------------------------- |
| **Committed** | Components reserved—subtracted from sellable at the supplier warehouse |
| **Consumed** | Components actually used in production |
| **Backordered** | Components that could not be committed due to insufficient inventory |
### Inventory Impact
Production orders affect multiple SKUs:
**Components (at supplier warehouse):**
* Subtracted from sellable and moved to Committed when production starts
* Moved from Committed to Consumed during production
* Marked as Backordered if insufficient inventory is available
**Finished Goods (produced):**
* Added to sellable at the source warehouse when production completes
### Bill of Materials (BOM)
Production uses BOM to determine components:
```
Finished Good: T-Shirt Bundle (3-pack)
├── Blue T-Shirt M × 1
├── Blue T-Shirt L × 1
├── Blue T-Shirt XL × 1
└── Poly Bag × 1 (Component)
```
## Comparing Transaction Types
| Aspect | Purchase Order | Transfer Order | Production Order |
| ---------------------- | -------------------------------- | ------------------- | --------------------- |
| **External/Internal** | External (supplier) | Internal | Internal |
| **Cost Tracking** | Yes (supplier cost) | No (internal) | Yes (component cost) |
| **Source** | Supplier (resolved to warehouse) | Warehouse | Supplier |
| **Destination** | Warehouse | Warehouse | Warehouse |
| **Step Types** | Purchase + Shipment | Shipment only | Production |
| **Lead Time** | Supplier + shipping | Transit time | Production time |
| **Auto Shipping Plan** | No (created manually) | Yes (on submission) | No (created manually) |
## Choosing the Right Type
### Use Purchase Order When:
* Inventory comes from outside your organization
* You're paying an external supplier
* Items don't exist in your inventory yet
### Use Transfer Order When:
* Inventory already exists in your warehouses
* You need to move stock between locations
* No external purchase is needed
### Use Production Order When:
* You manufacture or assemble products
* Finished goods are made from components
* You need to track production costs
## Transaction Type Details
### Purchase Order Specifics
When creating a PO:
* Choose from configured suppliers
* System shows supplier's lead time and costs
* Can have multiple suppliers for same SKU
Purchase orders include:
* Unit cost per SKU
* Shipping estimates
* Currency handling
* Volume discounts
When PO arrives:
* Can receive partial quantities
* Log discrepancies
* Update actual costs if different
### Transfer Order Specifics
When creating a transfer:
* System verifies source has sufficient sellable inventory
* Shows available quantities at source
* Blocks submission if insufficient stock
Transit time depends on:
* Configured warehouse lead times
* Distance between locations
* Shipping method
Unlike purchase orders:
* A Shipping Plan is created automatically on submission
* All inventory immediately enters "In Transit"
* No additional shipments can be created since everything is already shipped
### Production Order Specifics
Before production:
* Verify BOM is configured
* Check component availability
* Reserve components
During production:
* Track actual vs. planned output
* Log waste or scrap
* Calculate yield rates
Production costing includes:
* Component costs
* Labor (if tracked)
* Overhead allocation
## Next Steps
Step-by-step transaction creation
Navigate transaction pages
Understand the transaction lifecycle
Configure supplier information