Purchase Orders
Last updated
Last updated
Creating and Managing Purchase Orders
A purchase order (PO) is a formal request sent to a supplier to provide goods or services under specified conditions. It is a vital document in the purchasing process as it outlines what is being purchased, the quantities, agreed prices, and delivery terms.
Key Elements of a Purchase Order:
Item Descriptions: Clear details about the products or services being ordered.
Quantities and Prices: The number of units and agreed price per unit.
Tax and VAT Handling: Ensuring the correct tax amounts are applied based on jurisdiction.
Approval Workflows: POs often need to be approved before being sent to the supplier, particularly for high-value orders.
Receiving Goods
Once the supplier delivers the goods, it is crucial to verify that the items received match the purchase order. The receiving process involves checking the quality and quantity of the goods and logging the receipt in the ERP system to update inventory levels.
Goods Receiving Process:
Match the PO with Goods Received: Ensure the quantities and descriptions match the original order.
Quality Control: Inspect for any defects or issues before accepting the goods.
Updating Inventory: After confirming the goods, the inventory levels are automatically updated in the ERP system.
Handling Discrepancies: Any differences between the ordered and received quantities should be flagged for review.
