Purchase Process

The purchasing process is an interacting

structure of people, equipment, methods, and
controls that is designed to accomplish three
primary functions
 Functions
Functions

Handle the Support the Assist in the

repetitive work decision needs preparation of
routines of the of those who internal and
purchasing manage the external
department purchasing and reports
and the receiving
receiving departments
department
 Inventory
control
department

Accounts
department
Purchase
vendor
department

other
department

other
department
 Data Stores
Inventory master data
• Vendor master data
Purchase requisition data
• Purchase order master data
Purchase receipts data
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Receive goods Order goods Determine
and service and services requirement
An Effective Purchasing Process
 Determine Requirement
Inventory
master data
Inventory
purchase
requisitions

Accumulate Calculate
requests requirements
requirements

Purchase
requisition –
supplies & services Purchase
requisition
data
 Order goods and services
Vendor Inventory
master data master data

Requirements
Purchase
requisition Prepare
Select
purchase
Vendor
order (PO)

PO master Purchase order

data Notification:
• PO department
Update PO • PO inventory
data • PO accounts
Vendor payable
acknowledgement • PO receiving
 Receive Goods and Services
Vendor Reject
master data
Approved PO
PO receiving
receiving
notification
notification Complete
Inspect and
receiving
Count goods
reports
Reject
Receiving report
Vendor packing
slip
Complete
Purchase
receiving report Vendor
receipts
& purchasing master data
master data
order

PO master • Stock notice Inventory

data • Receiving master data
stock
 Fraud and the Purchasing Function
The typical cases included in this category of process
exploitation are instances in which:

• An employee places purchase orders with a particular

vendor in exchange for a kickback, secret commission, or
other form of inducement from the vendor.

• An employee has a conflict of interest between his

responsibilities to his employer and his financial interest—
direct or indirect—in a company with whom the employer
does business.

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ThAnK YoU!!!