Purchasing is the process of ensuring that a steady stream of required materials is on the way to your company when and where you need them.
SAP Business One, Web client helps you:
- Run the end-to-end purchasing process.
- Identify potential shortages before they happen through the real-time view.
- Monitor which vendors are consistently reliable by collecting precise historical information.
In this lesson, you will learn about the basic steps and key data of the purchasing process.
Most of the documents in the purchasing process resemble the structure and the working methods in the sales process. However, in the purchasing process, you document the interaction with your vendors rather than with your customers.
The following graphic shows the main steps involved for ordering, receiving, and paying for goods or services.
- Purchase Request
A purchase request is a document generated internally and can be used as a preliminary step in the purchasing process. For example, when an employee wants to order supplies, they use a purchase request to alert the purchasing department about their needs. The document specifies the quantities and timeframe for the requested items or services.
- Purchase Quotation
If the items in the purchase request aren’t available in-house, the purchasing department will buy the items. The purchase quotation is the document for requesting pricing and delivery information from your vendors before the purchase order.
First, you send the purchase quotation to the vendor, and after receiving the vendor feedback, update the document. The information tracked in the quotation enables you to pick the right vendor for the purchase. A purchase quotation report allows you to compare offers and pick the best vendor for your purchase scenario. Then you can create the purchase order from the selected quotation.
- Purchase Order (PO)
The purchase order is a document that you provide to the vendor, specifying the items or services that you want to purchase, including the agreed quantities and prices. It represents your commitment to the vendor to purchase the items.
- Goods Receipt PO
A Goods Receipt PO is a document that states the goods or services have been delivered to your company from the vendor. It is used to update your inventory quantities and values.
- A/P Invoice
An A/P Invoice is a document for your Accounts Payable department to enter the vendor’s invoice information, indicating that a payment should be made to the vendor.
- Outgoing Payment
An Outgoing Payment is a document that initiates a payment to the vendor account. There are generally four ways to send outgoing payments: cash, checks, credit cards, and bank transfers. There are also some additional country/region-specific payment methods.
You can choose which documents to include in your process steps depending on the business needs.