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PR, backorder, purchase enquiry, purchase order and purchase return
BusinessAhead provides you a complete purchase system which integrates the entire purchase process starting from a Purchase Requisition or a Backorder, going through the process of Purchase Enquiry, receiving and evaluating Purchase Quotes, and creating & releasing Purchase Order. It also handles the receipt of goods through Inspection Note and Goods Receipt Note, and processes vendor payments, deposits and advances. A brief overview of the facilities provided in each stage of the purchase process is given below:
A department may initiate a request for purchase by directly raising a Purchase Requisition. A Purchase Enquiry/Order is released by the purchase department on the basis of a PR. A PR is also auto-generated when Backorder is generated from a sales Delivery Note. A PR that is generated as a backorder, is auto-approved.
A request for purchase may also get triggered automatically by stock levels of items falling below the minimum quantity level. This is raised as an alert and no PR document is created as such. When the request for purchase is automatically triggered, you may begin your purchase process from direct creation of a Purchase Enquiry and skip the PR stage. Multiple items may be combined in a single enquiry to handle their purchasing together through one set of documents, thus reducing your purchasing work load.
BusinessAhead provides you the flexibility to directly create a Purchase Order from one or more PRs and skip the Purchase Enquiry and Purchase Quote stages.
The Purchase Enquiry is the second document generated in the purchase process. The purchase enquiry:
- Records details of items required to be procured.
- Is released to a panel of vendors for inviting quotes.
- Helps the Purchase department to follow-up with vendors to receive quotes.
You may use the information in one or more existing PRs to create a Purchase Enquiry, or you may directly create a purchase enquiry without a PR. The information in the purchase enquiry flows into the purchase quote and from the purchase quote into the purchase order and from the purchase order into the purchase receipt related documents, as and when these documents are generated during the various stages of the purchasing process.
The Purchase Quote is the third document generated in the purchase process. The purchase quote:
- Records details of items required to be purchased along with prices. If a purchase enquiry was released, the purchase quote(s) can be prepared on the basis of the purchase enquiry document.
- Helps the Purchase department to release purchase order based on the quotes received.
You may use the information in an existing Purchase Enquiry along with the quotes received, to create all Purchase Quotes. The information in the purchase quote flows into the purchase order and from the purchase order into the purchase receipt, as and when these documents are generated during the various stages of the purchasing process.
BusinessAhead provides you the flexibility to directly create a Purchase Order and skip the purchase enquiry & quote stages.
Evaluation of Quotes
The Quote evaluation document is the fourth document generated in the purchase process.
You may auto-generate a quote evaluation document, by combining all purchase quotes received against a particular PR. This document can be very helpful in negotiating with vendors on prices and other terms and finalizing your vendor(s) for placing order.
The Purchase Order is the fifth document generated in the purchase process. The purchase order:
- Is created when you decide to place an order on your finalized vendors for products or services.
- Records details of the order placed.
- Helps in materials planning (the quantities on order and their expected delivery dates are considered for calculation of available stock and committing sales orders).
- Also records the committed sales order against which the purchase order has been released.
You may use the information in an existing Purchase Quote to create a Purchase Order, or you may directly create a purchase order without a PQ. The information in the purchase order flows into the Inspection Note, Goods Receipt Note, Invoice and Payment documents, as and when these documents are generated during the various stages of the purchasing process.
You may pay advance money to your Vendors before the execution of an order. Advance money may be paid in general to a vendor on whom you are likely to place one or more orders in future, or it may be paid for a specific order already placed by you. Accordingly you can have advances tagged to a vendor in general as well as advances tagged to a specified order of the vendor.
Advance money paid against a specified order would normally be used to pay for invoices/dues pertaining to the tagged order. When adjusting vendor invoices/dues, BusinessAhead does not differentiate between the two types of advances. It accumulates all advances paid to a vendor and makes it fully available for adjusting all vendor dues.
You can place deposits with your vendor. You can also accept deposits from your vendor. The refund of such deposits are also handled by the system.
A credit memo is raised on a Vendor in the following situations:
- Bank/Processing charges levied on payments made to Vendor and borne by you.
- Finance charges payable to Vendor on account of delayed payment to Vendor.
- Return of received deposit back to Vendor.
A Debit memo can be raised on Vendor in lieu of some unforeseen situations such as LD clause applied due to delayed delivery, etc.
The Purchase Receipt process entails creation of an Inspection Note (IN), a Goods Received Note (GRN), Invoice Verification (IV) and release of payment to vendor.
IN is created when inspection is done; GRN is created when inventoried items are received and taken in inventory; IV is created when vendor invoice is verified and approved for payment; and payment document is created when payment is released. Details of the items received and values of products and services purchased are recorded.
The GRN and payment document are final documents. On the basis of the GRN and payment document the inventory values, vendor balances, stocks and accounts payable are updated. Accounting entries are automatically made when these documents are created.
There are several instances when you would need to make payment to your Vendors. All such instances are listed below:
- Regular Payment: Making payments against receipt of goods and services against a Purchase order.
- Advance Payment: Making an advance payment to a Vendor against an order or making an advance payment in general.
- Deposit Out: Placing deposits with Vendor.
- Payment against Credit Memo.
You may receive refund money from your Vendors under various circumstances, such as:
- Return of defective Goods for refund. Goods are returned to Vendor. Payment was already made hence Vendor returns money paid.
- Return of Deposit Out. You placed a deposit with your Vendor which has to be subsequently returned by the Vendor.
- Return of unutilized Advances.
- Debit memo raised on Vendor in lieu of some unforeseen situations such as LD clause applied due to delayed delivery, etc.
BusinessAhead provides a very simplified method of processing refunds received from vendor. Refunds are always processed against Debit Memos. A debit memo is first raised as the first step to processing receipt of refund money. This debit memo can then be either utilized by you for adjusting against future vendor payments or you can receive refund of money from vendor.