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Procurement: Pre-purchase and Purchase Order processing Module.

Purchase in ERP.

Purchase Function is said to be window of an organization, through which information about Products, Technological Developments in the Market and New Products Developments flows into any organization.

Purchase function not only develops new suppliers to cater needs of the organization but also supports in Cost Savings initiatives, Inventory Reduction Drives of an organization on a continuous basis.

ERP is designed to cater to these needs of Industry.  ERP is based on understanding of Purchase Management and supporting their initiatives of making organization more competitive by way of releasing Capital blocked in Inventories, reducing Lead-time from Suppliers, and ultimately improving Customer Satisfaction.

 

Concept: There are THREE kinds of Creditors (suppliers):

1.         Supplier for raw material, bought-out items, etc.  This is to be entered in the Supplier Master.

2.         Service Provider.  For example, consultant or auditor.  Where inventory is not affected. This is to be entered in the Supplier Master.

3.         Sub-Contractor or Third Party.  This is to be entered in Address Master.  This entity is supplier as well as INVENTORY LOCATION.

        1.1.          Purchase Master

 

1.1.1.   Supplier Type Master

 

Purpose: There are many types of supplier (vendor).  This menu is used to create various “Supplier Type.” 

For Example:

 

CONSUMABLES

HARDWARE

I. T.

DOMESTIC SUPPLIER

SERVICE PROVIDER

TRANSPORT SERVICE

PRINTING & STATIONARY

MACHINE MAINTENANCE

RM GENERAL

PACKING MATERIAL

TOOLS

GAUGES

LUBRICANT

FURNITURE & FIXTURE

MACHINE PARTS

PLANT & MACHINERY

 

1.1.2.   Supplier Master

 

Purpose: Enter Supplier (vendor) details such as Name, address etc.  This is used while preparing purchase related transactions such as purchase order, etc.

 

          Some of the major fields are to be entered:

 

Organization name

Supplier type

Contact person name

Telephone number

Address (two lines)

City

State

Country

CST Number (Central Sales Tax)

ECC Number (Excise Registration)

Range / Division (Excise)

 

User must enter the ECC number, Excise Range / Division, State Sales Tax (SST) number, Central Sales Tax Number (CST), of the Supplier.

  

Payment terms drop down is used to define the number of days

after which the payment will be made.  45 days is by default, but user can change the same.   This is used while making the Purchase Order.  The term gets defaulted automatically.  Here also in PO user can change the term for that PO if required.

 

1.1.3.   Address Master

 Used for Third Party name and addresses.  (See Subcontractor Module)

1.1.4.   Address Type Master

          Third Party

1.2.          Purchase Transactions

 

1.2.1.   Purchase Order

Purpose:  This transaction is used to raise a PO for an approved Supplier.  Information such as Supplier name, item to be procured, item quantity, rate, etc. is entered.  The PO is used to procure Raw material, packing material, bought out items, etc.

 

Note: Purchase order raised on subcontractor is called Job Order.  See the Subcontractor module for more details.

 

Name of such third party is entered in Address Master (and not Supplier master).   FAQ:  What is the difference between Supplier and Third Party?  Ans:  TP is BOTH creditor, supplier as well as inventory location.  When the name of TP is saved in Address master, DNS will automatically created a new inventory location in the sub-location master.

 

The material is received in the store based on the PO only.  Stores can receive no material if PO is not raised.  User in Stores does not have authority to enter item or rate.  PO is a parent document against which the Goods Inward or Purchase Voucher is made.  PO is a passive document, as it does not affect the inventory or accounts.

 

DNS ERP also prints name of the person who has login to prepare the transaction, and prints date on the PO.  The item, quantity, and Rate is at the ‘item level’.  All relevant additional amount is entered (at document level) such as Discount, Excise, Cess, Sales tax, Insurance, etc. 

 

PO Amendment:  Click on PO Amendment button to amend the PO.  First, open the existing PO, which you want to change by entering PO number.  Change the rate and save, the PO is now saved with a prefix A, after the number.

 

 

When you save the PO and then want void or terminate the PO then open the existing PO.  The void button will nullify the effects to ‘0’ and that PO will be seen in register will nullify effects.

The terminate button will terminate the PO totally.  It will not be seen in register.

 

  

Payment term in PO is defaulted as “45 Days………”, however, user can change the same.  Delivery date in PO is selected from the date picker. (or vendor delivery schedule can be created)

 

 

Sales tax:  Select either VAT or CST as required from the drop down.

 

1.2.2.   Purchase Voucher and GIIR or PV (Goods Receipt cum inspection)

 

 

Purpose:  This transaction is used when material is received in the stores.  PO is a parent document to make a PV.  User will select Supplier name.  All pending PO will default automatically.  User will enter Quantity information and savethe PV.  This document is active document.  In ERP, user does not have to enter documents twice. 

 

In legacy parlance, this transaction was known as Goods Inward Note.  In DNS the GIN is prepared for material received from the Third Part.  DNS ERP distinguishes the material received from Supplier and Third Party, because TP material is actually our own item received in a new shape and size, after processing (or assembly).

 

Purchase Voucher cum Goods Inward transactions does the following:

 

(1)   PVwill add material into stock (Hold location or material under inspection location).

(2)   Credit the Supplier (supplier)

(3)   QCinspector / Quality Assurance can reopen PVand enter accepted quantity – this will automatically add item into main stores and if item is rejected, add into Rejection Location.

(4)   Prepares short quantity debit note based on Challan quantity and received quantity.

 

In PV and GIIR field for Test Certificate Number (TC no and date) is been provided.  The user has to enter the number and select date from the drop down menu.

 

 

Note: This PV and GIIR option can be seen under the Inventory menu -> Inventory Transaction sub menu.  The PV is a unique transaction that is integrated with purchase order, inventory as well as creditor account.

 

When material is received by the stores person & quality control person has not checked the material then the status of GIN remains QC pending.  It will be transferred in stores only when QC person will open the same GIN and accept the material.  Then the status will change from QC pending to QC Done.

 

 

After QC person accepts the material by double clicking on the item and entering the accepted quantity.

 

  

***Note: Before QC procedure the accepted quantity and rejected quantity columns should remain blank.

 

Mostly purchase section (or production department) also uses the following menu options.

1.2.3.   Job Order

This is PO for the Third Party.

 

1.3.          Purchase Reports

 

 

1.3.1.   Supplier Master Printout

 

List of Supplier.  Supplier details such as Name, Address, Phone number, etc.

 

1.3.2.   PV(GIN – R/M Bought Out) Register

 

List of Purchase Voucher or the Goods inward transactions.  Material Received in stores.  (See under Inventory module)

 

1.3.3.   PO Register

 

List of Purchase Orders raised during a given period.

 

User can select various filters to select a particular Supplier or a particular item to get the PO details.  User can double-click on the row to see the actual PO transaction.  All registers in DNS provide document level list (the first view by default) and item level view.  Drilldown button gives item wise details.

 

In select type of PO: PO History is given where it will display those POs whose amendments are also done.  The user will select from the drop down menu the option of PO History.

 

 

                            

1.3.4.   PO Status Report

 

User can find status of Purchase Order raised for a given period.  User can also filter on Supplier, Item category, etc.  Incase the material is received against a PO then the corresponding PV number (Goods Inward) is shown.

 

1.3.5.   Job OrderRegister

 

List of Job Order raised to the Third Party, during a given period.

 

User can double-click on the row to see the actual transaction.  All registers in DNS provide document level list (the first view by default) and item level view.  Drilldown button gives item wise details.

 

1.3.6.   Purchase Return Register

 

List of RTV prepared in a given period.

 

-----end of purchase module details-----


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Home Parent Page Account Bill of Materials Cost sheet CRM module Excise Export Helpdesk Material Management ERP ISO 9000 Payroll Plant maintenance PPC Production Purchase Sales Security SMS using ERP ERP helps job working Subcontractor module Supply Chain VAT Warranty Module

Home About ERP Backup Campus ERP Crossword Puzzle 1 Crossword Puzzle 2 CXO DNS ERP DNS Source Doctor ERP ERP Audit trail ERP Modules list 1 of 2 ERP Modules list 2 of 2 ERP Book excerpt eManufacturing ERP Library ERP Testimony ERP CASE STUDIES ERP flow diagram ERP levels IMPLEMENT ERP Mobile Apps MIS News eCommerce ERP Paperless Office RFID SAP Year Ending

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