5. PROCUREMENT TO PAYMENT CYCLE | DIFFERENCE BETWEEN PROCUREMENT AND PURCHASE








PURCHASE REQUISITION
Purchase requisition is a request that is made to purchasing organization to procure certain list of material. Purchase requisition is an internal document, specifically it remains within the organization.
IDENTIFY SOURCE
Finding the possible sources of supply for the request materials. If we have already bought that material, than we can access the existing PO & conditions in the system.

REQUEST FOR QUOTATION (RFQ)
With the identification of sources of supply, we can send quotation request to sources. Once we have received the quotations, then we go proceed with next step vendor selection.

VENDOR SELECTION
 We can select a particular supplier based on various criteria like delivery time, price, etc. We reject the other quotations. In SAP system, we can compare quotations automatically once we key-in the RFQs.

PURCHASE ORDER
Once we select a vendor, PO can be created by key-in the required data.

PURCHASE ORDER MONITORING
The buyer can monitor the processing status of the purchase order and can determine whether goods or an invoice have been received for the relevant purchase order item. The system also supports reminder procedures.

GOODS RECEIPT
Comparison of the goods receipt quantity with the purchase order quantity and check the quality of the product whether it’s damaged or received safe.  

INVOICE VERIFICATION
 Vendor invoices are checked for accuracy of prices and other contents.

PAYMENT PROCESSING
Once the invoice is verified by P.Org, it is sent to accounts team for payment.

5.1 DIFFERENCE BETWEEN PROCUREMENT AND PURCHASE
Purchasing is a subset of Procurement. In purchasing they directly ask the vendor to supply the product. But procurement is the process starts from identifying the source, request for quotation,cost analysis and so on



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