Standard Operating Procedure (SOP)
1. Objective
To establish a standardized, transparent, and efficient procurement process for acquiring
goods and services (equipment, software, licenses, consumables, and services) required
for ISP operations, and to integrate the same into the ERP system.
2. Scope
Applies to all departments of the ISP (Operations, Technical, Admin, Finance, Projects,
Branch Offices) and covers both capital expenditure (CAPEX) and operational
expenditure (OPEX).
3. Roles & Responsibilities
Requester/Department Head: Initiates purchase requisition (PR).
Procurement Team: Manages RFQ, vendor selection, and PO issuance.
Finance: Budget check, payment processing.
Warehouse/Operations: Goods receipt, inspection, GRN.
Management/Board: Approves high-value procurements.
Process Steps
Step 1: Purchase Requisition (PR)
Initiated by requesting department via ERP.
Must include: item description, quantity, specification, justification, required
delivery date.
Approval route: Department Head → Finance → Management (if above
threshold).
Step 2: Approval Workflow
Approval hierarchy configured in ERP (value-based thresholds).
ERP auto-notifies approvers.
Step 3: Request for Quotation (RFQ)
Procurement team sends RFQs to minimum 3 vendors (unless single source
justified).
Vendors submit quotations in ERP portal/email.
Step 4: Quotation Comparison & Vendor Selection
ERP generates comparison sheet (price, delivery, compliance, vendor rating).
Best vendor selected based on weighted criteria.
Approval obtained before PO issue.
Step 5: Purchase Order (PO)
ERP generates PO (auto-numbering).
Includes vendor, pricing, delivery, payment terms.
Sent electronically to vendor + Finance notified.
Step 6: Goods/Service Receipt
Warehouse/receiving location or Respective Department or Individual verifies
items.
ERP generates Goods Receipt Note (GRN) / Service Acceptance Note (SAN).
Non-conformities recorded for vendor dispute.
Step 7: Invoice Processing
Vendor submits invoice.
ERP performs 3-way match: PO + GRN/SAN + Invoice.
If matched → moves to payment stage.
Step 8: Payment Processing
Finance processes payment as per terms (advance, credit, LC).
ERP updates vendor ledger & payment status.
Step 9: Asset & Inventory Update
Capital items → auto-tagged in Fixed Asset Register.
Consumables → added to Inventory Register
Step 10: Reporting & Compliance
ERP generates:
o Procurement summary reports
o Vendor performance analysis
o Budget vs. Actual expenditure
o Expiry alerts (licenses, AMCs, contracts)
Full audit trail maintained in ERP.
Procurement Process Workflow
1. Purchase Requisition (PR)
Raised by: Technical/Operations/Branch/Admin/ Department Wise
Details captured in ERP:
o Department & requester
o Item/service required (equipment, fuel, software license, etc.)
o Quantity & specification
o Purpose (e.g., tower setup, branch expansion, maintenance)
o Required delivery timeline
o Estimated Cost (as per requestor)
Workflow: Goes for line manager’s approval → Finance team
2. Approval Workflow
Levels of approval based on value:
o Rs.10,000: Department Manager
Above Rs. 10,000: CEO
ERP should allow multi-level approval matrix (value-based thresholds).
3. Request for Quotation (RFQ)
Procurement team issues RFQs to approved vendors from ERP.
Vendors submit quotations via ERP vendor portal/email.
ERP records:
o Vendor details
o Pricing
o Payment terms
o Delivery timelines
o Warranty/support terms
4. Quotation Comparison (QC)
ERP auto-generates Comparison Sheet:
o Price
o Delivery time
o Vendor rating/history
o Compliance with technical specifications
Recommended vendor selected → sent for approval.
5. Purchase Order (PO) Creation
ERP generates PO with:
o Vendor details
o Items, quantity, specs
o Payment terms (credit/advance, LC, etc.)
o Delivery location (branch, warehouse, tower site)
PO auto-sent to vendor & finance notified.
6. Goods/Service Receipt
At delivery location/warehouse:
o Goods Receipt Note (GRN) created in ERP.
o Items inspected & verified (quantity, damage, quality).
o For services (e.g., tower maintenance), a Service Acceptance Note
logged.
ERP updates inventory module (Assets or Consumables Segregate) (if stock
item like routers, fiber, spares).
7. Vendor Invoice Submission
Vendor uploads invoice to ERP (or via Accounts).
ERP matches invoice against:
o PO
o GRN/Service Acceptance Note
If 3-way match → forwarded to Accounts for payment.
8. Payment Process
Accounts schedules payment based on:
o Contract terms
o Credit period
o Vendor priority
ERP updates vendor ledger.
Payment methods: Bank transfer, LC, cheque.
ERP tracks location-based inventory (head office, branch, tower site).
Procurement Workflow Diagram
┌───────────────────┐
│ Purchase Requisition
└─────────┬─────────┘
│
▼
┌───────────────────┐
│ Approval Workflow │
└─────────┬─────────┘
│
▼
┌───────────────────┐
│ RFQ to Vendors
└─────────┬─────────┘
│
▼
┌───────────────────┐
│ Quotation Analysis│
└─────────┬─────────┘
│
▼
┌───────────────────┐
│ PO Generation
└─────────┬─────────┘
│
▼
┌───────────────────┐
│ Goods Receipt Note
│ (GRN)
└─────────┬─────────┘
│
▼
┌───────────────────┐
│ Invoice & 3-Way
│ Matching │
└─────────┬─────────┘
│
▼
┌───────────────────┐
│ Payment Process
└─────────┬─────────┘
│
▼
┌───────────────────┐
│ Asset/Inventory │
│ Update │
└─────────┬─────────┘
│
▼
┌───────────────────┐
│ Reporting & Audit │
└───────────────────┘
