Purchase - To Be Flow:
Purchase Process:
The Purchase Department is responsible for procuring the Project
related items, Stationery Items, Spares, Consumables, Fixed Assets and
Preparation of Other Services.
Input
o Purchase or Service Request (for vehicle renting).
o Purchase Quotation from various suppliers.
To be Process
Purchase Request:
On receiving the Purchase or Service Requisition from site, Plant
and maintenance Department Users, Purchase Department will
check for the availability of Stock in the warehouse in case of
non-availability the procurement Process will be started.
The Purchase Request Enables Users in the Organization to
initiate a Purchasing Process by submitting their needs for
certain goods or Services. The Purchase Request will be copied
to Purchase Quotation or Purchase Order for further Processing.
End User should choose the required Items or fill in the details of
the required Services. It’s recommended to have the field
“Required Date” as mandatory in each line. If the Purchase
Request is for Items, you must enter the Required Quantity.
Purchase Request Document is subject to the Approval Process
based on Purchase Approval Matrix.
Purchase Enquiry and Quotation:
In Purchasing, End User will find the best offer for goods or
Services that is required.
To do so, User will send a Purchase invitation to a number of
Vendors to indicate their terms and conditions, such as Price or
Delivery Date for the Items or provision of Service, by submitting
a Quotation.
In this Purchase Quotation, the Items or Service details, for
example, Quantity, Required Date and Vendor Information, are
specified.
User should compare the Quotations received and determine the
Vendor that which wins the order by using SAP Business One
screen of Purchase Quotation Comparison available inside
Purchase Quotation screen.
Purchase Order:
The Purchase Department will create the PO (Purchase Order) to
the selected supplier and list Required Items by using Purchase
Order screen of SAP Business One based on approved Quotation.
The Purchase Order is a Document used to Request Items or
Services from a Vendor at an agreed upon terms and condition
along with financials.
When you enter a Purchase Order in SAP Business One, no value-
based changes are posted in the Accounting System. However,
the orders Quantities are listed in Inventory management.
Based on the approval matrix purchase order will approved
The Purchase Department will follow-up with suppliers against
Delivery Date provided by the supplier based on Document wise
or item wise.
Good Receipt Note:
Store keeper will create this Document, once receive goods from
the Vendor by using the Goods Receipt PO screen of SAP
Business One System.
When end User creates a Goods Receipt PO, SAP Business One
receives the goods into the warehouse, updates the Quantities,
and creates an Accounting Journal Entry.
When importing goods, companies incur certain additional costs,
such as Customs, Transport and Insurance Fees, or Taxes. These
Additional costs will be allocated to the imported Items and
reflected in the Accounting System using the Landed
Costs function in SAP Business One.
To update an item’s cost price, which is required for calculating
the Inventory valuation, gross profit, or any other Inventory-
related calculation, User should use this Landed Costs Document.
On this Document, User record the costs incurred when
importing goods and distribute the costs among the individual
goods according to pre-determine factors, for example, Quantity,
Weight or Volume, Value of Invoice and Item specific
Specify the G/L Account for clearing non-customs expenditures
(reposted through the Landed Costs Document) between the A/P
Invoice (Service type) and the Landed Costs Document.
To complete the Accounting Transaction of the import Process,
create an A/P Invoice (item type) based on the Goods Receipt PO
as soon as User receives the Vendor’s Invoice. Create the A/P
Invoice the same way that User would create an A/P Invoice sent
from custom duty Vendors.
Goods Return:
The goods Return Document is used to Return delivered goods to
Vendors or to reverse a Purchasing Transaction for an item
completely or partially.
Due to legal stipulations, User cannot delete or make any
Accounting-relevant changes to these Documents. However, to
return unwanted or faulty goods, or to correct errors made when
entering the above-mentioned Documents, User will create a
goods Return with approval.
When User creates goods Return, the goods are returned to the
warehouse after approval and Quantities are updated.
AP Down Payment Invoice:
Businesses require Advance Payments to Supplier.
In SAP Business One, User can map this business practice by
issuing an A/P Down Payment Request or A/P Down Payment
Invoice.
After User paid to the supplier, User should deduct the Down
Payment amount from the final Invoice.
After User creates the Payment Document, a Journal Entry is
recorded in the corresponding Control Account.
User will generate the Down Payment Invoices and the regular
Invoices in the same Payment Document (Outgoing Payment).
The Down Payment Documents are labeled as Document type DT
in the Payment Document.
Later supplier actual Purchase Invoice and Payment should
reconcile with advance Payment entry in SAP System to knock of
the supplier Account balance.
AP Invoice:
The A/P Invoice is a Request for Payment. It also records the cost
in the Profit and Loss Statement
User should create an A/P Invoice from multiple Purchase Orders
and Goods Receipt POs’. User cannot change any Accounting-
relevant data on an A/P Invoice since it is the legal Accounting
Document that generates entries in the general ledger.
When End User receives an A/P Invoice, SAP Business One posts
the related Accounts for the Vendor in the Accounting System.
Validations:
Purchase Quotation Screen - Quantity should be greater than 0
always.
Purchase Order Screen Quantity should be greater than 0 always.
Alerts and Approvals
Approvals:
o Purchase Request Approval based on line manager (stage
wise).
o Purchase Order - Approval Stage wise.
o Purchase Return - Approval Stage wise.
Purchase Module - Formats and Reports:
Format
Purchase Request / Service Request.
Purchase Order.
GRN.
AP Invoice
Goods Return
A/P Credit Memo
Reports:
Compare Quotation based on enquiry no
Purchase Request Register Report: Parameter based on Date,
PR No, Item and User wise.
PO Register Report: Parameter based on Project, Date, Item, PR
and Supplier wise.
PO Analysis: Item Wise Monthly, Quarterly, Annually rate
variations.
PO Analysis: Supplier Wise Monthly, Quarterly, Annually.
PO Analysis: Item Group Monthly, Quarterly, Annually.
GRN Register: Item, Date, Branch, and Supplier wise.
Goods Return Register: Item, Date, Branch, and Supplier wise
Pending PO for GRN: Supplier, Item and Date wise.
Pending GRN for Invoice
Purchase order value against the budget amount.
Stock Register.
Stock ageing report.
Non-moving items as per project.
Inventory counting variations.
Minimum quantity deviation report.
Goods issue, Transfer, Receipt register.
