Purchasing software: the process, flow by flow

Raises a request with the item or a description, quantity, estimated unit price, need-by date, reason and budget line.

• All six fields are required. A request tied to a sales order or a job carries its reference and takes the need-by date from it.
• For a stock item with a reorder point, the form shows on hand, on order and any open PO, and asks for a reason, because the daily reorder check already covers normal demand.

Groups the request with the same requester's requests in the same category over the last 7 days.

• If two or more requests in that window together cross a matrix threshold (S$1,000, S$5,000 or S$20,000), each one is routed at the combined value, so splitting a purchase does not lower the approver.

Checks the budget line before anyone is asked to approve.

• Remaining = budget for the period, minus bills posted, minus commitments (approved requests not yet on a PO, plus open PO value not yet billed). All figures before GST.
• Over budget: the approver must enter a reason. An overrun above S$1,000 adds the finance manager to the route.

Builds the approval route from the matrix.

• Every request goes to the requester's department head first, who approves the need and the budget line.
• Above S$1,000 it then goes to the approver for that amount: operations manager up to S$5,000, finance manager above S$5,000 and up to S$20,000, director above S$20,000.
• Category rules add a reviewer where the client wants one, for example the finance manager for items that will be recorded as fixed assets.

Resolves who holds each approval step on the day.

• A requester never approves their own request. A department head's own request goes to their manager.
• If the approver has set a delegate for the day, the delegate gets the step only when their own approval limit covers the amount. Otherwise it goes one level up.
• When one person holds two steps, one approval covers both and the log records both roles.

Approves, rejects with a reason, or sends the request back with a question.

• An approver may lower the quantity or value and approve in the same action. Any increase re-runs the budget check and the route.

Sends a reminder after 4 working hours without action, and escalates one level if the step is still waiting.

• Escalation after 1 working day when the need-by date is within 5 working days, after 2 working days otherwise.

Marks the request approved, records its value as committed on the budget line and queues it for purchasing.

• Lines with an approved supplier and a valid price go to PO drafting. Everything else goes to supplier selection.

Opens a selection for the line and sets a quote due date from its need-by date.

• Quote due date = need-by date minus the longest quoted lead time on file minus 2 working days for approval and sending.

Lists the approved suppliers for the item side by side with what is already known about each.

• For each supplier: last price paid and its date, current list price and its expiry, pack size, minimum order, quoted lead time.
• Actual lead time is measured from PO sent to goods received over the supplier's last six POs for the item, and on-time rate as the share of lines received by the confirmed date.

Chooses which suppliers to ask, normally 2 or 3 from the approved list, and sends each a request for quotation.

Records each reply as a supplier quote with unit price, pack size, minimum, delivery charges, lead time and validity date.

Builds the comparison at the quantity each supplier would actually supply.

• Each quantity is rounded up to that supplier's pack and minimum, and delivery and other charges are added, giving a total and a landed cost per base unit.
• Foreign-currency quotes are converted at the rate finance has set for the day.
• For an overseas quote, landed cost adds freight, insurance, any duty and clearance charges. Import GST (9% of the CIF value plus duties) is left out, because Harbourline, as the GST-registered importer named on the import permit, claims it back as input tax.
• Any quantity above the need is shown in units and in S$.

Selects a quote and records a reason whenever it is not the lowest landed cost.

Applies the supplier rules from the matrix before a PO line is created.

• A price more than 5% above the last price paid, or a supplier not yet approved for the item, goes to the finance manager first.

Saves the chosen quote as the price source for the PO line, with its validity date.

• The PO line, the supplier's confirmation and finance's bill match all read the quoted price from this record.

Collects the demand lines whose release date has arrived.

• Release date = need-by date minus the supplier's lead time in working days minus a 2-working-day buffer. Lines with a later release date wait for a later run.

Groups the lines into one draft per supplier, delivery location and currency.

• If an unsent draft to the same supplier exists, new lines are added to it instead of opening a second PO.
• Lines for the same supplier due for release in the next 10 working days are listed beside the draft, so the buyer can pull them in.

Rounds each quantity up to the supplier's pack size and line minimum, and checks the order against the supplier's minimum order value.

• The extra from rounding is shown on the line. Rounding that adds more than 2 months of average usage is flagged.
• Below the supplier's minimum order value or free-delivery threshold, the draft shows the delivery charge and lists items from the same supplier within 20% of their reorder point that could be added.

Prices each line from the selected quote or the supplier's valid price list.

• When the selected quote or price list has expired since the line was queued, the last price paid is used and the line is marked price to confirm. A line that has no valid price when it is queued goes to supplier selection instead.

Sets a requested date on each line and fills the terms from the supplier record.

• Requested date = today plus the supplier's lead time in working days, skipping weekends and public holidays, and compared with the need-by date.
• Payment terms, delivery address and currency come from the supplier record.
• GST at 9% on lines from a GST-registered Singapore supplier. An overseas supplier not registered for GST here gets no GST line, because import GST is assessed by Singapore Customs on the import permit and handled by finance.

Runs the checks that must pass before the draft can be submitted.

• Every item is on the supplier's approved list. Items marked discontinued or made to order are blocked.
• A quantity above 3 times the item's normal reorder quantity needs a note from the buyer.
• A price more than 5% above the last price paid routes the PO to the finance manager.
• An open, unreceived PO for the same item and supplier is shown on the line.

Reviews the draft, edits quantities, dates or lines, and submits it for approval.

• The log keeps the figures the agent used, the draft as prepared, each edit with who made it, and who approved and sent the PO.

Approves the PO at the level the matrix sets for its value before GST.

• Operations manager up to S$5,000, finance manager above S$5,000 and up to S$20,000, director above S$20,000.
• A PO made only from approved requests keeps those approvals when its value is within what was approved, the request was approved at the level this PO value needs, and no supplier or price rule is triggered.
• The approver may lower quantities or move dates while approving. An increase in value re-runs the route.

Sends the approved PO to the supplier from the system.

• Sending is always done by a person. Once sent, the quantities show as stock on order and the value as committed on the budget lines.

Starts a confirmation clock on each line of the PO.

Records the supplier's acknowledgement line by line: confirmed quantity, confirmed date and confirmed price.

• A reply that acknowledges the PO without dates is recorded as received, and the lines stay unconfirmed.

Compares each confirmation with its PO line.

• Price above the PO price: within 5% the buyer accepts it with a note, above 5% it goes to the finance manager as a PO change.
• Date later than requested: the owners of linked sales orders see the new date.
• Quantity lower than ordered: the line splits into a confirmed part and an unconfirmed balance, each with its own date.

Drafts a follow-up listing only the unconfirmed lines, 2 working days after sending and every 2 working days after that.

Sends the follow-up, or phones the supplier and records the answer on the lines.

Drafts a dispatch check 2 working days before the confirmed date for lines tied to customer orders or marked critical.

Moves a line to the late list on the first working day after its date passes without a goods receipt.

• The date used is the confirmed date, or the requested date for an unconfirmed line, which is shown as unconfirmed.
• The expected date on stock on order is marked overdue, so sales sees the risk on its orders.

Drafts a chaser for each late line every 2 working days for the buyer to send.

• After two unanswered messages on a line, whether follow-ups or chasers, the line passes to the purchasing lead.

Decides whether to wait, expedite, buy the balance from another approved supplier or cancel the line.

• Extra freight for expediting is added to the PO as a charge line and approved at the matrix level for the new total.

Confirms the goods receipt against the open PO lines.

• Items not on the PO are not received against it. Anything above the open balance is received only up to the over-receipt tolerance agreed with that supplier (0% unless one is agreed), and the rest is held at the dock for the buyer.

Updates each PO line with the quantity received and the balance open.

• Line status: open, part received, received, or closed short.

Moves the received value from on order to received not billed.

• The value stays committed on the budget line until the bill is posted, so the budget check and finance's accrual both stay right.

Decides what happens to any short balance.

• Keep it open with a new date from the supplier, or close the line short, which releases the commitment and is confirmed to the supplier by the buyer.

Passes each receipt to finance with the PO price and the quantity received for three-way matching.

Closes the PO when every line is received or closed short and every receipt is billed.

Raises a return against the goods receipt line with a reason, the quantity and photos.

Checks the return against the receipt and the supplier's terms.

• Quantity returned cannot exceed quantity received minus anything already returned on that line.
• Days since receipt are compared with the return windows on the supplier record, for example 7 days for transit damage and 30 days for defects.
• Whether the receipt is already billed decides the document: a debit note if billed, a corrected receipt if not.

Moves the goods to the return location so they cannot be picked or sold.

Asks the supplier for a return authorisation, quoting the PO, the goods receipt, the tax invoice number and the photos.

Approves the return with the remedy the supplier agreed: credit, replacement or repair.

Hands the goods over on a return note signed by the supplier's driver, which takes them out of stock at cost.

Drafts a debit note for the credit due when the receipt was billed and the remedy is credit.

• The debit note shows the same details a credit note would, including the number and date of the supplier's original tax invoice.

Approves and sends the debit note, and the amount is held off the next payment run to that supplier.

Matches the supplier's credit note to the debit note when it arrives.

• The figures must match. Any difference goes to the finance manager, and the debit note stays open until it is settled.