Purchase Management

Purchasing is the function of buying goods and services from external sources in an organization. The Purchase department initiates the function as and when required. Purchase Management is a process that tries to streamline the purchase function of an organization by defining a workflow.

The purchase module is closely integrated with the inventory. One can configure the vendors and their products along with the prices. The purchase process starts with a purchase request and ends when the item is purchased or reaches the requester. The various statuses and steps involved in a purchase process (Purchase Workflow) are:

1. Generate PO: The purchase process begins with requisition. Requisitions are the requests from users for purchasing items. These requests (new Purchase Orders) are created with “Generated” status.
2. Approve: The requests are sent for approval to the appropriate authorities.  Once sent, an approval request for the Purchase Order (PO) is generated. If the requests are approved, the purchase order can be moved to the “Approved” status.
3. Rejected: If the approval requests are rejected, the purchase order gets moved to the “Rejected” status.
4. Ordered: Once an approval is received, the Purchase Orders are sent to Vendors for the purchase of the required items. The Purchase Order status will be updated to “Ordered”. Details related to the advance payments made or received invoices can be updated into the system.
5. Cancelled: In case the request cannot be fulfilled due to any reason, the purchase order can be marked as “Cancelled”.
6. Partially Received: In case the vendor makes a partial delivery of the ordered items, then on receiving them the purchase order can be marked as “Partially Received”. Details of the received items are uploaded against the order. In case, some of the items are damaged or not up to the mark, such details are also updated. These items can be sent for replacement through the route of Return Orders.
7. Received: Once the ordered items are received, the purchase order can be moved to the “Received” status. All the item details are updated in the purchase order. The received items are updated in the CMDB. Hardware assets such as workstations, Routers, etc., go through the Reconciliation Process as they are also added in the CMDB via discovery process.
8. Closed: On completion of the procurement of related items, the purchase order can be “Closed”.

The objectives of Purchase Management are:

• Proper maintenance of records of all the transactions.
• Avoid stock out situations.
• Follow financial prudence.
• Reduction in inventory cost.
• Development of good relation with the existing vendors.
• Management of the departmental expenses of an organization.