As a prerequisite, correct master data are required, particularly the vendor and the product data (from which the order takes default values).
For purchased services and non-inventoried commodities, it is possible to use procurement categories instead.
The purchasing process includes the steps below:
- Planned order and purchase requisitions (for material requirements)
- Planned orders are generated automatically in operations planning (master planning)
- Purchase requisitions are internal documents, entered manually, by the person who needs the material. Runs through an approval workflow
- Request for quotation (for detailed information click here)
- Sent to vendors to require information about the prices and delivery dates
- Purchase order (for detailed information click here)
- Consists of header – line format. If not approved the status is Draft. If approved or if change management is not active (no need for approval) the status is Approved
- Optionally you can post a purchase inquiry to vendors for validation purposes
- Posting a purchase order confirmation means to save it. All PO confirmations are saved with its original info even after the order maybe subject to changes
- The PO status is indicated by order status and document status?
- Product receipt (for detailed information click here)
- Reduces the open quantity in PO and increases the the physical quantity in inventory
- The order status becomes Received
- Invoice receipt (for detailed information click here)
- Register the invoice in the pending vendor invoice form which is usually matched with the PO and product receipt, or otherwise manually in invoice journal
- The order status becomes Invoiced
- Vendor payment (for detailed information click here)
- Record the payment manually or as a result of payment proposal
- Generates an open vendor transaction , waiting for payment