If there is any release process (Approval Process) for a Purchase order, we need to get the approvals first before issuing PO to the vendor. This kind of information we can find in the Purchase order. The purchase order will be raised by Purchasing Department to the vendor with the agreed price, materials/services, quantity, delivery terms, and payment terms.
The Purchasing department will negotiate the required materials/services with the external vendors, and they will finalize the vendor. The store’s department simply enters the required material and quantity in the purchase requisition.
If the stock is not available in the warehouse, then the store’s department will raise the purchase requisition to the purchasing department. If the stock is available in the warehouse, then the store’s department will send the stock to the production department. Generally, In the organization, the production department team checks with the store’s department team for the required stock/materials. Purchase Requisition is raised by the stores department to the Purchase department internally. We will understand the master data activities like a material master, purchase Info record, source list, and transaction activities like Purchase Requisition, Purchase Order, Goods Receipt, and Invoice Posting. I have explained few popular scenarios in this blog post. It deals with procuring materials, services, different contracts associated with procurement. Hence this process is popular with the word ‘P2P’ Process. The procurement process starts from purchase requisition and ends with payment to the vendor.
In this document, I would like to explain the different scenarios in the procurement process.
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