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Purchase Module

Complete procurement workflow from requisition to payment.

📊 Overview​

The Purchase Module manages:

  • Purchase Requisitions (PR) - Request for purchase
  • Purchase Orders (PO) - Formal orders to suppliers
  • Goods Receipt Note (GRN) - Receiving documentation
  • Purchase Invoices - Supplier billing
  • Supplier Management - Vendor relationships
  • Payment Terms - Credit management

📋 Purchase Request (PR)​

Access: Purchase → Purchase Request

Creating Purchase Request​

Who Creates: Store Supervisor, Department Manager

Step 1: New Request

  1. Click New Purchase Request
  2. Fill header:
    • Request Date: Today
    • Required By: Deadline
    • Request By: Auto (your name)
    • Location: Requesting branch
    • Priority: Normal/Urgent
    • Purpose: Reason for purchase

Step 2: Add Items

  1. Click Add Item
  2. Search product
  3. Enter:
    • Quantity needed
    • Unit
    • Preferred supplier (optional)
    • Notes/specifications
  4. Add more items

Step 3: Justification

  • For Stock Items:

    • Current stock level
    • Minimum level
    • Usage forecast
    • Lead time consideration

  • For New Items:

    • Purpose
    • Expected usage
    • Alternative options considered

Step 4: Submit

  1. Review all items
  2. Click Submit Request
  3. Status: Pending Approval
  4. Manager notified

Approval Workflow​

Manager Review:

  1. Receives notification
  2. Reviews request
  3. Checks:
    • Budget availability
    • Stock levels (really needed?)
    • Quantity justified
    • Pricing reasonable
  4. Options:
    • ✅ Approve → Becomes draft PO
    • ❌ Reject → Returns with reason
    • ✏️ Request Changes → Sent back for revision

📦 Purchase Order (PO)​

Access: Purchase → Purchase Order

Creating Purchase Order​

From Approved PR:

  1. PR auto-converts to draft PO
  2. Or manually: PO → New PO
  3. Select PR to reference

Manual PO (Without PR):

Step 1: PO Header

PO Number: Auto-generated
PO Date: Today
Supplier: *required* (Select from list)
Delivery Location: *required*
Expected Delivery: Date
Payment Terms: Net 30 / Net 15 / COD

Step 2: Add Items

  1. Click Add Item
  2. Select product or enter description
  3. Enter:
    • Quantity
    • Unit
    • Unit Price
    • Tax Rate
    • Discount (if any)
  4. Subtotal auto-calculates
  5. Add more items

Step 3: Calculate Totals

Subtotal: (Sum of all items)
Discount: (If applicable)
Tax (VAT): (Calculated)
Shipping: (If applicable)
Grand Total: (Final amount)

Step 4: Terms & Conditions

  • Select from templates
  • Or enter custom terms
  • Delivery instructions
  • Quality requirements
  • Return policy

Step 5: Review & Submit

  1. Verify all details
  2. Click Create PO
  3. Status: Open
  4. Options:
    • Print PO: For fax/mail
    • Email PO: Send to supplier
    • Download PDF: Save copy

PO Status Workflow​

DRAFT → OPEN → PARTIALLY RECEIVED → CLOSED
              ↓
           CANCELLED
  • Draft: Being prepared
  • Open: Sent to supplier, awaiting delivery
  • Partially Received: Some items received
  • Closed: All items received
  • Cancelled: Cancelled before receipt

📥 Goods Receipt Note (GRN)​

Access: Purchase → Goods Receipt

Receiving Goods​

When Supplier Delivers:

Step 1: Find PO

  1. Go to Receive Goods
  2. Search for PO by:
    • PO number
    • Supplier name
    • Date range
  3. Click PO to open

Step 2: Physical Verification

Check Delivery:

  • ✅ Right items?
  • ✅ Right quantities?
  • ✅ Good condition?
  • ✅ Correct specifications?
  • ✅ Not expired?
  • ✅ Packaging intact?

Step 3: Create GRN

  1. Click Create GRN
  2. Enter:
    • GRN Date: Today
    • Delivery Note #: From supplier
    • Received By: Your name
    • Vehicle #: Delivery vehicle (optional)

Step 4: Enter Received Quantities

For each item:

  • Ordered Qty: From PO
  • Received Qty: Enter actual
  • Accepted Qty: After quality check
  • Rejected Qty: If any
  • Reason: If rejected/short

Step 5: Quality Inspection

  • Check quality standards
  • Mark pass/fail
  • Note any defects
  • Take photos (if required)

Step 6: Complete GRN

  1. Review all items
  2. Add general notes
  3. Click Save GRN
  4. Print GRN (3 copies):
    • One for supplier's driver
    • One for accounts
    • One for warehouse

System Actions:

  • Stock updated (received quantities added)
  • PO status updated
  • If all items received: PO closes
  • If partial: PO remains open
  • GRN ready for invoice matching

Handling Discrepancies​

Short Delivery (Less than ordered):

  • Enter actual quantity
  • Note reason
  • PO remains open for balance
  • Follow up with supplier

Over Delivery (More than ordered):

  • Accept if within tolerance
  • Reject excess if not agreed
  • Contact manager for approval

Wrong Items:

  • Reject items
  • Don't add to stock
  • Request replacement
  • Document with photos

Damaged Items:

  • Reject damaged items
  • Note in GRN
  • Request credit note
  • Inform supplier immediately

🧾 Purchase Invoice​

Access: Purchase → Purchase Invoice

Invoice Matching​

When Supplier Invoice Arrives:

Step 1: Find GRN

  1. Go to Purchase Invoice
  2. Click Create from GRN
  3. Select pending GRN

Step 2: Enter Invoice Details

Supplier Invoice #: *required*
Invoice Date: From supplier invoice
Due Date: Based on payment terms
Currency: Default or select

Step 3: Verify 3-Way Match

System compares:

  1. Purchase Order (What was ordered)
  2. GRN (What was received)
  3. Invoice (What supplier is charging)

Check Match:

  • ✅ Items match
  • ✅ Quantities match (received qty)
  • ✅ Prices match PO
  • ✅ Calculations correct
  • ✅ Taxes applied correctly

If Discrepancies:

  • Price difference: Contact supplier
  • Quantity mismatch: Check GRN
  • Extra charges: Verify with PO
  • Resolve before proceeding

Step 4: Additional Costs

Add if applicable:

  • Freight/Shipping
  • Insurance
  • Customs duty
  • Handling charges
  • Other fees

Step 5: Review Totals

Subtotal: (Items total)
Additional Costs: (Freight, etc.)
Tax (VAT): (Calculated)
Total Amount: (Final)
Amount Due: (If credit note applied)

Step 6: Post Invoice

  1. All verified ✅
  2. Click Post Invoice
  3. System creates accounting entry:
    • Debit: Inventory/Expense
    • Debit: Input Tax (VAT)
    • Credit: Accounts Payable (Supplier)
  4. Status: Posted
  5. Moves to accounts payable

💰 Payment Terms​

Access: Purchase → Payment Terms

Managing Terms​

Default Terms:

  • Cash: Immediate payment
  • COD: Cash on Delivery
  • Net 7: Pay within 7 days
  • Net 15: Pay within 15 days
  • Net 30: Pay within 30 days
  • Net 60: Pay within 60 days
  • Advance: Pay before delivery

Creating Custom Terms​

Step 1: Add Term

  1. Click Add Payment Term
  2. Enter:
    • Term Name
    • Days Until Due
    • Description
    • Discount (if early payment)

Example - 2/10 Net 30:

Name: 2/10 Net 30
Days: 30
Discount: 2% if paid within 10 days

Step 2: Assign to Suppliers

  • Edit supplier
  • Select default payment term
  • Applied to all POs for that supplier
  • Can override per PO

👥 Supplier Management​

Access: Purchase → Suppliers

Supplier List​

View Suppliers:

  • Supplier name
  • Contact person
  • Phone, email
  • Outstanding balance
  • Last purchase date
  • Status

Adding Supplier​

Step 1: Basic Info

Supplier Name: *required*
Supplier Code: Auto or manual
Contact Person: Name
Phone: Contact number
Email: For PO/correspondence
Website: URL

Step 2: Address

Address Line 1, 2
City
State/Province
Postal Code
Country

Step 3: Financial

Payment Terms: Default term
Credit Limit: Maximum outstanding
Tax ID: For tax purposes
Bank Account: For payments

Step 4: Categories

  • Supplier Type (Food/Beverage/Equipment/Service)
  • Products supplied
  • Preferred for (categories)
  • Rating/Performance

Step 5: Contacts

  • Add multiple contacts
  • Sales rep
  • Accounts person
  • Delivery coordinator

Supplier Performance​

Track Metrics:

  • On-time delivery rate
  • Quality acceptance rate
  • Price competitiveness
  • Response time
  • Issue resolution

Supplier Rating:

  • Excellent (★★★★★)
  • Good (★★★★)
  • Average (★★★)
  • Poor (★★)
  • Blacklist (★)

🔄 Purchase Returns​

Access: Purchase → Purchase Return

Returning Items to Supplier​

When to Return:

  • Wrong items delivered
  • Damaged goods
  • Quality not acceptable
  • Expired or near expiry
  • Over-supply (not ordered)

Process:

Step 1: Create Return

  1. Click New Purchase Return
  2. Select original PO/GRN
  3. Select invoice (if already posted)

Step 2: Add Return Items

  1. Select items to return
  2. Enter return quantity
  3. Select reason:
    • Damaged
    • Wrong item
    • Quality issue
    • Expiry issue
    • Over-supply
    • Other (specify)
  4. Add photos/evidence

Step 3: Return Authorization

  • Contact supplier
  • Get RMA (Return Merchandise Authorization) number
  • Confirm return accepted
  • Shipping arrangements

Step 4: Process Return

  1. Enter RMA number
  2. Pack items
  3. Attach return note
  4. Ship to supplier
  5. Get proof of delivery

Step 5: Credit Note

  • Wait for supplier credit note
  • Match credit note to return
  • Apply to outstanding invoice
  • Or request refund

System Impact:

  • Stock reduced (returned qty)
  • Accounts payable reduced (credit)
  • Original invoice adjusted

📊 Purchase Reports​

Access: Reports → Purchase

Key Reports​

Purchase Summary:

  • Total purchases by period
  • By supplier
  • By category
  • By location

Purchase by Supplier:

  • Volume per supplier
  • Amount spent
  • Number of POs
  • Average order value

Outstanding PO:

  • Open purchase orders
  • Expected delivery dates
  • Value pending receipt

Outstanding Invoices:

  • Unpaid supplier invoices
  • Due dates
  • Overdue amounts
  • Payment priority

GRN Pending Invoice:

  • Goods received
  • Not yet invoiced
  • Supplier follow-up list

Price Analysis:

  • Price trends by product
  • Supplier price comparison
  • Best price indicators

🎯 Best Practices​

Purchase Planning​

✅ DO:

  • Forecast demand accurately
  • Order in economic quantities
  • Consider lead times
  • Compare supplier prices
  • Negotiate payment terms
  • Build supplier relationships

Quality Control​

✅ DO:

  • Inspect all deliveries
  • Document issues immediately
  • Reject substandard items
  • Maintain quality standards
  • Communicate with suppliers

Cost Management​

Control Costs:

  • Bulk ordering discounts
  • Seasonal purchasing
  • Multi-supplier quotes
  • Annual contracts
  • Early payment discounts

🔍 Troubleshooting​

GRN Not Creating Stock​

Check:

  • Items marked as "Accepted" (not rejected)
  • Quantities entered correctly
  • Location selected
  • Product set to "Manage Stock"
  • No pending approvals

Invoice Not Matching PO​

Common Issues:

  • Price differences: Check PO terms
  • Quantity mismatch: Verify GRN
  • Extra charges: Not in PO
  • Tax calculation: Different rates

Solution:

  • Contact supplier for clarification
  • Get approval for variances
  • Create debit/credit note if needed

Efficient purchasing keeps your business supplied and costs controlled! 🛒✨