This presentation gives you the step by step guide for procurement internal control.

1. Non Trade
Procurement
procedure

2. Contents.
1. Raising Material Requisition Note (MRN)
2. Raising Purchase Requisition (PR)
3. Raising Purchase Order (PO)
4. Advance Payment
5. Goods Receiving by the Warehouse
6. Raising Goods Receive Note (GRN)
7. Final Payment

3. 1. Raising Material Requisition Note
(MRN)
1.1 Relevant departments establish their necessity of goods and
material required, and quantify the items through Material
Requisition Note (MRN). With the consent of Head of the
department / Location head.
1.2 Further requisition for goods and materials uploaded to the logistic
inventory , Should be made through the system.
1.3 When a particular item is not listed in the system such items
could be ordered through Manual Material Requisition
Note.
1.4 The Manual Material Requisition Note will be signed by the
Preparer, Checker and then approved by the Location /
Department Head.
1.5 Then the manual MRN will be handed over to the Logistics
Warehouse.

4. 1. Raising Material Requisition Note
(MRN) Contd..
1.6 System generated MRN will be automatically transferred to the
Supervisor or In charge of the logistic warehouse.
1.7 Logistic Supervisor / In charge review the MRN and give the
approval via system by clicking “Save” Button.
1.8 Manual MRN will be reviewed by the Logistic In charge than he
will place his signature to authorize the delivery of goods and
material . In his absence authorization will be given by Logistic
Supervisor.
1.9 Upon receiving the approved MRN Logistics Warehouse
Department arranges the items to deliver to Branches,
Locations, Departments or Project Sites if items are available
in the Inventory.
1.10 Than the process of deliver goods through system Logistics TOG
Note or manual Dispatch Note will be proceeded.

5. 2.Raising Purchase Requisition (PR)
2.1 If items are not available in Logistics Warehouse, they will place a
Purchase Requisition to the Logistics Purchasing Department.
2.2 The Purchase Requisition should be prepared by the Logistics
Warehouse Clerk/ Supervisor. Then it should be approved by the
Logistics Warehouse In-Charge. In his absence Logistics
Warehouse Executive can approve the Purchase Requisition.
2.3 Upon receiving the approved Purchase Requisition Logistics
Purchasing Department will proceed purchases according to the
Purchase Requisition.

6. 3.Raising Purchase Order (PO)
3.1 If the Supplier is already selected and prices are agreed, Logistic
Purchasing Department will raise the Purchase Order (PO) and
carry out the normal purchasing procedure.
3.2 If the Supplier is not decided and the amount is material, Then
Supplier Price Quotation Request will be prepared & signed by
Logistics Purchasing Manager or in his absence Assistant Manager
and will be E-Mailed/ Faxed to three or four suppliers.
3.3 When the Supplier sends their Price Quotation to Logistics
Purchasing Department, Logistics Purchasing Executive will
prepare the Supplier price quotation Comparison Sheet and
pass it to the team (GM, AGM or Logistics Manager) to decide the
Supplier who can supply quality products at reasonable rates.

7. 3.Purchase Order (PO) Contd..
3.4 Quotations, for greater than Rs.25,000/= (For each product) or
cumulative balance of more than 100,000/= should be approved by
GM/ AGM. The Logistics Purchasing Manager has the authority to
approve the Quotations which amounts to lower than Rs.25,000/=
(For each product) or cumulative balance of less than 100,000/=
3.5 A copy of quotation comparison sheet approved by AGM should be
handed over to Accounts for the references of payment approval.
3.6 After quotation process, Purchase Order (PO) will be raised and
will be signed by the Preparer (Logistics Purchase Order Clerk)
and by the Checker (Logistics Purchasing Supervisor) and by the
authorizing staff (Head of Logistics Purchasing Department). In
the absence of the authorizing staff, GM/ AGM need to sign the
Purchase Order.
3.7 The approved PO will be send to the Supplier via E-mail, fax, hand
Delivery or any other possible media.

8. 4.Advance Payment
4.1 Advance payment should be made only after receiving the
approved original invoice from the supplier
4.2 The supplier should indicate the total amount due and the
advance payment required as agreed with the company and the
balance due.
4.3 Than invoice will be delivered to the relevant department head.
4.4 Department head will check the correspondence Agreement,
Quotation and the necessary supporting documents to verify the
adequacy of the invoice and the accuracy of advance
requisition.
4.5 If any variation noted than the supplier will be requested to
provide the correct invoice.

9. 4.Advance Payment Contd..
4.6 If the invoice is correct and accurate than the relevant
department head will write the amount in the invoice as “Pay
Advance” and he/she will place their name, signature and date
than request the Accounts to proceed the advance payment.
4.7 When handing over the supplier invoice to the Accounts, The
department head must ensure that all supporting documents are
attached to it as follows:
1. Supplier Invoice (Original).
2. Quotation comparison sheet with approved quotation.
3. Purchase order and Purchase Requisition.
4. Supplier Agreements if any.
5. job completion stage report of the location head.
6. Any other documents.

10. 4.Advance Payment Contd..
4.8 Accounts department should not make any payment based on the
quotation. They should get the supplier invoice indicating the Total
amount, Advance payment and the Balance due.
4.9 Accounts Department will verify the supplier invoice against the
documents by cross checking the Purchase order, Supplier advance
request, Approved quotation and the necessary supporting's.
4.10Accounts Department will process the payment and they will make
the payments ready.
4.11Then the Logistics Purchasing Supervisor/ Relevant
department head will coordinate with supplier regarding the
payment collection and they will fix a date to collect the payments.

11. 5.Goods Receiving by the Warehouse
5.1 When items coming in to Logistics warehouse PO & Original
Supplier Invoice should be shown to the security at the gate. Then
the vehicle will be allowed in to the company premises.
5.2 Unloading of goods and verification of goods against PO & Original
Supplier Invoice to be done by Logistics Clerk with the presence of
a Security Person.
5.3 When there are any shortages observed during Unloading,
Logistics Clerk will mark those on the invoice. And raise the GRN
only for the received quantity, Until supplier deliver the
remaining quantity Logistic department will not handover the
invoice to the Accounts.
5.4 Security will observe the process and he will place his signature
and “Inbound Checked” seal on the original supplier invoice.

12. 6.Raising Goods Receive Note (GRN)
6.1 Then the Logistic GRN Clerk will prepare the Goods Received Note
(GRN) and he will sign as the preparer. Then the Logistics
Warehouse Executive will sign as the Checker. Logistics
warehouse in charge will sign as Authorizer.
6.2 When the PO is raised through the system then the GRN will be
generated via the system by the Logistic Clerk, He will sign as the
preparer then the Logistics Warehouse Executive will sign
as the Checker. Logistics warehouse in charge will sign as
Authorizer.
6.3 Goods Receive Notes (GRN) cannot be signed by Logistics
Purchase Order Clerk or by Logistics Purchasing Supervisor in
any situations.
6.4 During this receiving procedure, Logistics Clerk should up-date the
bin- cards according to the Manual Goods Receiving Notes for
inventory control. At the mean time system GRN will
automatically update the stock balance.

13. 7.Final Payment
7.1 Then Logistic warehouse executive will prepare the manual payment
voucher by indicate the Supplier name, Mode of payment,
Amount and other details and he will sign as the issued by person.
In his absence, Logistics Senior Executive will sign as issued by
Person.
7.1 When the payment is due Logistic Warehouse will hand over the
Manual payment voucher, Quotation, Purchase Order copy,
Original Supplier Invoice and the Original GRN to the
Accounts Department for processing the payment and
accounting before 10.30 a.m. on a daily basis.
7.2 Then the Logistics Executive will send an E- mail to Accounts
Department including Supplier name, Invoice number and other
important details, and he will copy the E- mail to Logistics
Purchasing Supervisor and to the Logistics Manager.

14. 7.Final Payment Contd…
7.3 After that Accounts Department will verify the documents by cross
checking PO against approved quotation and PR. Further PO will
be compared with supplier invoice and GRN. Than the statement
of account of supplier, Budget/ Project Bill of Quantity Report
and any other necessary documents will checked to confirm
the due amount (Advance deduction, Retention adjustment
etc.)
7.4 Payment voucher will be raised by the Accounts Assistant/ Junior
Accounts Executive and approved Based on the authorization
matrix.
7.6 Accounts Department will process the payment and they will
make ready the payments on the following day.
7.7 Then the Logistics Purchasing Supervisor will coordinate with
supplier regarding the payment collection and they will fix a date
to collect the payments.