Purchase Module

In highly connected and globalised market place, ways of doing business are changing rapidly. Organizations are sourcing materials - raw material, semi finished or traded finished goods – from multiple sources spread across the globe. Selecting a competent vendor and supply source channel are assuming high importance. Technology is helping buyers & suppliers work collaboratively with more transparency, thereby benefiting both organizations. Handling purchase process through Cloud based solutions is becoming more of norm rather than an exception.

Purchase Process:

A typical purchase process consists of all the steps from identifying items requirement, seeking quotations from prospective vendors (suppliers), comparison of quotations, releasing purchase orders / contracts on selected suppliers, receipt of material, and return of material to supplier if it is not acceptable for valid business reasons and making payments to suppliers as per contract terms.
Advance purchase process includes Vendor rating mechanism. The analysis is based on various parameters like timely delivery, adherence to quantity and quality in delivery and percentage of rejection.
Companies that have multiple manufacturing units or distribution warehouses are taking centralized purchase decisions. This allows them to have a better negotiating power with suppliers. Better inventory control can be exercised by moving slow moving items to fast moving locations, thereby helping liquidate stocks and avoid unnecessary purchases resulting in lesser inventory carrying costs and hence improving bottom line.
Some of the major tasks / challenges faced in a typical purchase process are:
Handling purchase side taxes while creating a purchase order
Complex tax structures in some countries require that taxes are defined and applied properly while creating purchase orders Application of wrong tax rate may attract penalties from tax authorities. Definition and association of right tax with right product / supplier by authoritative user can eliminate this issue. During creation of purchase order, purchase executive should be required to select product / supplier and corresponding taxes should be automatically applied, thereby eliminating chances of errors. Proteus ERP has a dynamic taxation module that allows the authoritative user to define taxes as per his business needs. User can add new taxes as when they are required, thereby giving total control & flexibility.
Inventory control
Every incoming material has to be inventoried through Goods Received Note that is generated based on a valid open purchase order. This helps in better inventory control. Further all accounting and taxation related entries should be auto-posted on confirmation of goods receipt. Proteus ERP keeps a track of incoming material through goods receipt note. It has provision to track amendments made to a purchase order and material received against it. Al accounting and taxation entries are posted automatically on confirmation of various transactions like purchase order or goods receipt note.
Payable control
1. Payment should be made only for received & accepted quantity. These supplies should be in conformance with terms and conditions mentioned in purchase order.
2. One invoice should be paid only once.
3. Advances, if paid to suppliers, should be considered while making payment.
Proteus ERP has provision to create purchase as well as expense payables (other payables). Purchase related payables can only be created against valid Goods Receipt Note. This ensures that payments to suppliers are made only for the quantity of goods received. Further Purchase order along with goods receipt note and not supplier’s invoice / other documents are taken as basis for making payments. All the advances made to the supplier at the time of raising purchase orders are considered with priority while making the payment.
Purchase Return
Proteus ERP handles the purchase return process in unique way. It auto posts all relevant accounting entries and creates unconfirmed debit note once purchase return transaction is confirmed. The workflow escalates the debit note to higher authority, thus ensuring control and command of chain.