In this article, we’ll look at the purchase requisitions and the purchase order process. First, it’s necessary to define these terms.
A Purchase Requisition is a document generated by employees to notify the purchasing department of specific needs. It contains the goods, supplies or services with a unit of measure and requirement date. In most cases, purchase requisition approval is required by management before the order is sent to the supplier. This process ensures transparency and internal control.
With semilimes, the Purchase Requisition key fields are: Employee (requestor), Supply date (expected delivery date), Currency (currency used for the requisition), Warehouse (where the shipment will be made), Supplier, Product, Quantity, Unit of measure, and Unit price.
Note that only Employee and Quantity are required fields, as the supplier name, supply date, or warehouse may not be known at the time of the order. Likewise, the Product might not yet appear in the semilimes ERP product list.
A Purchase Order (PO) is a commercial document and first official offer issued by a buyer to a seller indicating types, quantities, and agreed upon prices for products or services. It is used to control the purchasing of products and services from external suppliers.
In semilimes, POs are created in the Purchase menu with key fields such as: Party (supplier), Invoice Address (supplier address), Supplier Reference, Purchase Date (date the purchase is made), Payment Term (payment term agreed with suppliers for invoicing purpose), Product Quantity, Unit of Measure, Delivery Date, and Tax.
A Purchhase Request document defines the need to purchase a product. It is linked to a warehouse and possibly a supplier. It contains a purchase date and an expected delivery date. In addition to Purchase Requisition, other processes in semilimes ERP also generate the creation of Purchase Requests (for example; backorder or minimum location product quantity settings).
Once approved, a Purchase Request is converted into the Purchase.
semilimes ERP allows you to create Purchases based on a selection of draft Purchase Requests. Once the Purchases are created, the corresponding Purchase Requests are set to the state Purchased.
Summary of Purchase Requisition to Purchase Order scenario.
How to to create a PR urchase Request and convert it to Purchase:
Create Purchase Requisition:
Navigate to Purchase > Purchase Requisitions section. Click Create New Record “+”.
All fields with an asterisk * are mandatory.
In addition, key information such as warehouse, currency, and supply date can be entered
In this section, the Product, Quantity, Unit price, Unit of measure and supplier Party must be entered. This information helps calculate the total amount of the Purchase. The Purchase Requisition is now in “Wait” state.
Clicking Wait will trigger the requisition approval process and display the approval button. If everything is set, click “Approve”. It will allow this Purchase Requisition to be displayed in the Purchase Requests list.
Convert Purchase Requisitions:
Navigate to the Purchase Requests menu, Drafts section. Approved Purchase Requisitions will be displayed in the Draft section of Purchase Requests. Here the Purchase Requests can be converted to Purchases (Purchase orders). To convert the Purchase Request to Purchase, check the box on the left of the row, click the upper right menu and press “Create Purchase”. This will display the Purchase Requisitions in the Purchase Requests list.
Process Purchase Requests:
Navigate to the Purchases menu, Drafts section. The Purchase Request can be converted to quote stage by clicking the “Quote” button. Once the quotation has been received and supply agreement confirmed, the status Purchase Request status can be changed to “Confirmed”. Pressing “Process” triggers the creation of a Supplier Invoice Line.
As you can see, semilimes ERP can handle the most demanding procurement business flows, from Purchase Request to Purchase Order, Supplier Invoice and Supplier Shipment.
Small businesses, which typically lack separate purchasing departments and procurement processes, can benefit from this workflow by initiating the purchasing process as soon as a Purchase Order is created or a Supplier Invoice is booked.
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