2. 2
VENDOR MASTER MAINTENANCE
Process Flow Map
Request for procure
Vendor selection
Raising order
Receiving of Goods
Receiving of invoice
Payment
3. 3
RAISING ORDER TO SUPPLIER
The purchase department after receiving the approved requisition raises a purchase
order (PO) on the vendor from whom the purchases are to be sourced from
The PO forms the contract which is a legal agreement when there is no formal
agreement in place
Each POs has its own unique number
4. 4
PURCHASE ORDER
The critical information on a purchase order is:
Unit Price and Quantity ordered
Description of goods/services
Terms of payment
Invoicing address
Delivery schedule
Contact details (Accounts payable and requestor)
Critical information
5. 5
TYPES OF PURCHASE ORDERS
Standard Purchase Orders
Standard purchase orders for one-time purchase of various items. It is created when the
details of the goods or services you require, estimated costs, quantities, delivery schedules
is known
Blanket Purchase Agreements
Blanket purchase agreements is prepared when detail of the goods or services you plan to
buy from a specific supplier in a period is known, but delivery schedule is not known
Limit Purchase Order
Limit purchase order is prepared where the spending limit is know for a specific vendor or
product
6. 6
PURCHASE ORDER
Process Flow Map
ProcurementPurchase Requisition
Vendors
Bid Evaluation Summary
Issue Purchase Order
Procurement Committee
7. 7
IMPORTANCE OF PURCHASE ORDERS
Purchase order is one of the most critical document in order to get an invoice paid
Purchase orders help to plan and control the business spends
PO based purchases also helps entity to take advantage of negotiated rates and
economies of scales
PO is used as a base document in case of any dispute with a vendor in future
