Purchasing Module

1. Module Overview

The Purchasing Module manages the entire procurement and sourcing lifecycle. It handles internal purchase requests, Request for Quotation (RFQ) competitive bidding, purchase orders, goods receipt, and supplier invoice verification. Enforcing budget controls and automated workflow routing, the module optimizes corporate spending, ensures strategic vendor compliance, and links directly to Financial Accounting and Inventory.

Business Value:

• Controlled Spending: Enforce strict delegation of authority limits through multi-level approval hierarchies.
• Three-Way Matching: Prevent overpayment by validating that Purchase Orders, GRNs, and Supplier Invoices match in quantities and prices.
• Strategic Sourcing: Compare supplier bids, track vendor performance KPIs, and manage contracts to lower Total Cost of Ownership (TCO).
• Reduced Admin Costs: Streamline recurring purchases through Blanket Purchase Orders and automated replenishment triggers.

Core Capabilities

• Purchase-to-Pay Lifecycle: Full coordination of requisitions, quotations, orders, warehouse receipts, invoice checking, and payment vouchers.
• Supplier Relationship Management (SRM): Track supplier onboarding checklists, manage certifications, and audit compliance metrics.
• Spend & Procurement Analytics: Aggregate category spending, review pricing history trends, and track cost savings dashboards.
• Cost Management & Optimization: Deploy should-cost modeling, lifecycle cost analysis, and value engineering to optimize vendor pricing.

Compliance & Governance

• Delegation of Authority (DoA): Lock purchasing limits by role or department to prevent unauthorized buying.
• Ethical & Sustainable Sourcing: Track supplier social, environmental, and anti-corruption compliance records.
• Global Trade Compliance: Verify import/export paperwork and coordinate multi-currency supplier pricebooks.

2. Key Concepts & Terminology

3. Included Applets

Strategic Sourcing & Supplier Admin

Procurement Lifecycle

Goods Receipt & Returns

Financial Adjustments & Reports

4. Standard Business Workflows

Workflow 1: Purchase-to-Pay (Standard Procurement)

┌──────────────┐    ┌──────────────┐    ┌──────────────┐    ┌──────────────┐    ┌──────────────┐
│  Purchase    │───▶│  Purchase    │───▶│   Goods      │───▶│  Purchase    │───▶│   Payment    │
│  Requisition │    │   Order      │    │   Receipt    │    │   Invoice    │    │   Voucher    │
└──────────────┘    └──────────────┘    └──────────────┘    └──────────────┘    └──────────────┘

Steps:

1. Requester raises a Purchase Requisition in the PR Applet with item details and budget center.
2. After approval, the PR is converted to a Purchase Order and sent to the supplier.
3. When goods arrive, the warehouse confirms receipt via the Purchase GRN Applet (three-way match check).
4. The supplier invoice is matched against the PO and GRN. Discrepancies are flagged.
5. Once matched, finance processes the Payment Voucher in the Financial Accounting module.

Workflow 2: Strategic Sourcing (Competitive RFQ Bidding)

Define Requirement ──▶ RFQ Created ──▶ Send to Suppliers ──▶ Compare Quotes ──▶ Select Supplier ──▶ Award PO

Steps:

1. Sourcing team identifies a strategic need or high-value purchase requirement.
2. Sourcing officer creates an RFQ document outlining specifications and delivery windows.
3. RFQ is sent to qualified suppliers in Supplier Maintenance.
4. Quotations are received and logged in the Internal Purchase Quotation Applet.
5. System matches and compares unit prices, lead times, and terms.
6. The winning bid is selected, and a PO is automatically awarded.

Workflow 3: Supplier Onboarding & Qualification

Discover Supplier ──▶ Send Qualification Check ──▶ Assess Compliance ──▶ Approve ──▶ Setup Master Data

Steps:

1. Procurement identifies a potential supplier.
2. Compliance checks are sent request certificate uploads (ISO, Tax Registration).
3. Sourcing officer assesses financial stability, operational capacity, and ethical certifications.
4. Approval committee reviews the qualification score.
5. Supplier is added as an active vendor in Supplier Maintenance Applet and mapped to relevant categories.

Workflow 4: Supplier Return & Balance Adjustment

QC Rejection ──▶ Purchase Return ──▶ GIN (Stock Out) ──▶ Supplier Credit Note ──▶ Balance Adjusted

Steps:

1. QC rejects a batch of materials. Warehouse raises a Purchase Return.
2. Goods are packed and sent back to the supplier, accompanied by an Internal Purchase GIN.
3. Sourcing team registers the return and requests a refund or Credit Note.
4. Supplier’s Credit Note is entered via Purchase Credit Note Applet, adjusting the accounts payable ledger.

5. Roles & Permissions

6. Prerequisites / Initial Setup

Before going live with the Purchasing Module, ensure:

• Core Module — Organisation structure, branches, and cost locations are configured
• Supplier Maintenance — Vendor profiles populated with credit terms and bank accounts
• Chart of Accounts — Mapped accounts for purchase assets, AP ledger, and tax inputs
• Workflow Design Applet — Configured authorization routing matrices and budget thresholds
• Mapped default JRXML print templates for outgoing RFQs, POs, and Returns

Implementation Phasing

• Phase 1: Foundation Setup: Map buyer roles, define item purchasing classifications (categories), and import supplier listings.
• Phase 2: Operational Flow: Set up requisition workflows, PO generation rules, receiving policies, and three-way match tolerances.
• Phase 3: Sourcing & Analytics: Roll out blanket PO agreements, supplier performance scorecards, and cost savings dashboards.

7. FAQs & Troubleshooting

Q: The GRN quantity doesn’t match the PO. Can I still receive the goods? A: Yes, partial receipts are supported. The system will track the remaining balance on the PO, allowing future GRNs against the same order.

Q: How do I handle a supplier price increase after the PO was issued? A: Create a Purchase Debit Note to adjust the pricing for already-received goods, or amend the PO (if the workflow allows) for future deliveries.

Q: Can a Purchase Requisition bypass the approval workflow? A: No. If an approval workflow is configured, all PRs must complete the approval chain before conversion to a PO. This enforces budgetary controls.

Q: How do I track spending by supplier over time? A: Use the Purchase Report Applet and filter by supplier to view historical spend, order volumes, and trends.

Troubleshooting Common Issues

• Approval Workflow Delays: Check if the assigned approver is active in Tenant Admin. Review escalation timers and temporary delegate settings if the approver is out of office.
• Supplier Performance Shortfalls: Review the delivery and quality KPIs in the Purchase Report Applet. Verify that receipt variances are logged correctly on the GRN to ensure accurate metrics.
• Three-Way Match Discrepancies: Investigate pricing mismatches. If the invoice price differs from the PO price within accepted tolerance limits, process the invoice; otherwise, flag it for buyer review.