Purchase Process

Although purchasing can take many forms, every purchase follows approximately the same established pattern, from looking for goods or services to buy to making payment for them to a vendor. The pattern suggested by Codejig ERP is a typical and widely recognized purchase process which involves 4 distinct steps from issuing a purchase quotation to creating a purchase order to receiving goods or services to receiving a purchase invoice from a vendor for goods or services bought. Each stage in the process is represented by a separate purchase document, such as a purchase quotation or a purchase order. In the Codejig ERP purchase process, the suggested document flow is the following:

 
Purchase quotation ⇒ Purchase order ⇒ Goods and Services receipt ⇒ Purchase invoice.

It is easy to move along the purchase process as Codejig ERP can copy and transfer all the appropriate information from one purchase document to the next document in the flow.

However, it is not obligatory to take each step in a sequential order. If necessary, you can create a purchase invoice directly in response to a purchase order to your vendor without creating the preceding three purchase documents before that. Or, you can skip certain documents in the purchase process and, for example, create a receipt document based on a purchase quotation without creating a purchase order prior to that. 

Note: Purchase process is a one-way process. You cannot create a higher-level document, and then create a document preceding it. You can only create higher-level documents based on lower-level documents. For example, you cannot create a purchase invoice, and after that create a receipt document for the purchase invoice. However, if you have created a purchase quotation and a purchase invoice based on it skipping a purchase order and a receipt, you can return to the skipped documents and create them from the purchase quotation but not from the purchase invoice.

In Codejig ERP, the purchase process is conveniently visualized with the help of the Documents flow line located at the top of each purchase process document. The line also enhances the creation of purchase documents based on the preceding documents in the flow as well as facilitates the management of and navigation through created purchase process documents. For more information about the Documents flow line an, see Documents flow line. 

Note: You can tailor the Codejig ERP purchase process to fit your company’s business needs. Although the purchase documents occupy fixed positions in the sequential purchase process, they are relatively independent documents, and you can start implementing your purchase model with any of them. Also, you can modify the purchase document created from other purchase documents. You can change data in any fields, add new items, delete transferred items or alter item details. Documents from which you have created the subsequent purchase documents can be modified or deleted as well without distorting the purchase process or causing any errors in the system.

 

Purchase Process Documents

The following documents comprise the purchase process in Codejig ERP:

  1. Purchase quotation

A purchase quotation is a document that offers to purchase goods or services from a vendor at a certain price and under specified conditions. It allows your company as a customer to review prices and other details before making a purchase. The document and its postings do not have any inventory or accounting impact.

2. Purchase order

A purchase order is a document that confirms the purchase of certain items or provision of specific services at approved prices, quantities and dates. The document results in a posting that affects the Inventory journal.

3. Goods and services receipt

A goods receipt document indicates that goods have been delivered to your company as a customer or services have been received. It does not regulate or oversee the transportation of goods. It just reflects the fact that you have received the goods and/or services. The goods receipt cancels the goods reservation in Inventory journal with the status “Expected”, alters the total quantity of items in stock by the number of goods received and indicates that the goods were received from a vendor without a purchase invoice. It also impacts the transaction journal and inventory journal.


4. Purchase invoice

A purchase invoice is a document sent by a seller to a customer indicating the costs and quantities of the products or services provided by the seller. The purchase invoice is the request for payment from the vendor. It affects the transaction journal, inventory journal, the vendors journal and the VAT journal.

Note: In the purchase process, it is only compulsory to create the purchase invoice. You do not have to first create the three preceding documents.

 
Document Creation Approaches

There are three approaches how to create purchase process documents. 

  • You can manually create a purchase document as a standalone document. 

For information about the manual approach to the creation of purchase documents, see Create Purchase Process Documents.

Note: When you create a purchase document as a standalone document that is not based on any other documents, it commences a new purchase process. 

  • You can create purchase process documents based on the preceding purchase documents using the standard copying functions in Codejig ERP.

For more details on this approach, see Copy Purchase Documents.

Note: Through the use of the standard copying functions, you can create multiple documents based on one purchase process document. However, only the first document created will continue the original purchase process following the document with reference to which it was created. All other documents, will not explicitly refer to the base document and will form other purchase process flows in which they will be treated as the base documents commencing the process. 

  • You can create purchase process documents based on the preceding documents in the purchase flow using the Document flow line.

For information about the Document flow line, see Document flow line.

Note: Even if you create documents using the standard copying functions and not the Document flow line, such documents will also be displayed in the line representing the flow formed for a specific base document. However, the line will not display all documents created based on specific purchase process document. Only the first higher-level document created will be shown in the line.  


Purchase-related Documents

Besides the documents that constitute the described purchase process, there are the following purchase-related documents in Codejig ERP:

  • Make payment - used for recording purchase invoice payments made to a vendor. The document results in a posting that closes the open purchase invoice which was paid. The document belongs to the Codejig ERP Banking module.
  • Debit note - is issued by a seller to reduce the amount that a customer owes from a previously issued purchase invoice. It is created in the event of a product return, a purchase invoice error, damaged products, and so on. It affects Transaction journal, Vendors, VAT and Inventory journals.

 

Purchase-related Directories

The purchase module includes the following directories:

  • Purchase order generator - enables you to check the stock for minimal and sufficient quantities of goods and to repurchase positions which have amounts below the minimal recommended quantity by generating the purchase orders.
  • Purchase invoice import - allows you to convert e-invoices received from your forwarding service provider into Codejig ERP purchase invoices in the XML and PDF formats.
  • Vendor - allows you to add new vendor and keep track of all your existing and top vendors as well as spendings associated with them. 

 

More information