Purchasing - Procure to Pay Cycle

Procure to Pay Cycle

Procure to pay systems enable the integration of purchasing department with account payables department. It consists of the following process,

            1.    Requisitions

            2.    Request for Quotation

            3.    Quotation

            4.    Vendor Selection

            5.    Purchase Order

            6.    Goods Receipt

            7.    Invoice

            8.    Payment to Vendors

Requisition

With online requisitions, you can centralize your purchasing department, source your

requisitions with the best suppliers, and ensure that you obtain the appropriate management approval before creating purchase orders from requisitions. you can use Purchasing to create internal requisitions, which are handled as internal sales orders and are sourced from your inventory rather than from outside suppliers like purchase requisitions.

                    

RFQ and Quotation

Purchasing provides you with request for quotation (RFQ), and quotation features to

handle your sourcing needs. You can create an RFQ from requisitions, match supplier

quotations to your RFQ, and automatically copy quotation information to purchase

orders. Purchasing provides complete reporting to control your requests for quotations

and evaluate supplier responses.

Purchase Orders

Purchase Order (PO) is a formal request to a vendor to supply certain materials or services under the certain conditions. Purchasing provides the Purchase Orders window that you can use to enter standard and planned purchase orders as well as blanket and contract purchase agreements.

Receiving

Purchasing lets you control the items you order through receiving, inspection, transfer

and internal delivery. You can use these features to control the quantity, quality, and internal delivery of the items you receive.

Invoice Verification

After Goods Receipt process, next process of procurement to pay is invoice verification. It plays an important role in Purchasing Module, Receiving Module which performs the following tasks

•                     A Vendor Invoice can be created with reference to a Purchase Order, a Goods Receipt,  
•                    Invoice is verified in-terms of Matching Methods,

After verifying all the data, the invoice is posted and the data is saved in the system. The system updates the invoice data in General Ledger Accounting (GL).

Payment to Vendors

The last step in procurement process cycle is payment to vendors and it is also known procure to pay process. Vendors are getting paid as per payment terms. In this fast technology world, companies can pay through many methods to vendors. For example through Net Banking, Wire Transfer, Check Payment.