Chapter 7 — Purchase

Module code: purchase Features: purchase_dashboard, purchase_rfq, purchase_orders Home: /purchase/dashboard/

7.1 What the module is for

Purchase covers the path from asking suppliers for a price to receiving the goods and recording the supplier's bill. It is the mirror image of Sales: a purchase order creates a receipt into stock and a vendor bill in the ledger.

7.2 The purchase lifecycle

   Request for quotation  ──convert──►  Purchase order  ──►  Locked
        (RFQ, draft)                      (purchase)        (done)
             │                                │
             │                                ├──► Receipt      (Inventory)
             │                                └──► Vendor bill  (Accounting)
             │
             └──cancel──► Cancelled

The RFQ stage is optional. If you already know the price and the supplier, create the purchase order directly.

7.3 Screens

/purchase/dashboard/               dashboard
/purchase/rfq/                     RFQ list
/purchase/rfq/new/                 new RFQ
/purchase/rfq/<id>/                RFQ detail
/purchase/rfq/<id>/send/           mark as sent to the vendor
/purchase/rfq/<id>/convert/        convert to a purchase order
/purchase/rfq/<id>/cancel/         cancel
/purchase/orders/                  purchase order list
/purchase/orders/new/              new purchase order
/purchase/orders/<id>/             detail
/purchase/orders/<id>/confirm/     confirm
/purchase/orders/<id>/cancel/      cancel
/purchase/orders/<id>/unlock/      unlock
/purchase/orders/<id>/receipt/     create the goods receipt
/purchase/orders/<id>/bill/        create the vendor bill

7.4 Setup before first use

7.5 Requesting quotations

Use an RFQ when you want to compare prices before committing.

Creating an RFQ

Screen: /purchase/rfq/new/

1. Select New RFQ.
2. Header: - Vendor — who you are asking. - Expected date — when you need the goods. - Warehouse — where they will be received.
3. Lines — for each item add the item, quantity, and an expected price if you have one.
4. Save.

Sending it

Select Send (/purchase/rfq/<id>/send/). This records that the request has gone out, so the RFQ list distinguishes what you are waiting on from what you have not yet sent.

Comparing and converting

1. When quotations come back, enter each vendor's price on their own RFQ.
2. Compare across the RFQ list.
3. On the winning RFQ, select Convert to purchase order (/purchase/rfq/<id>/convert/). A purchase order is created with the same lines and prices, in draft.
4. Cancel the RFQs you did not accept, so the list stays a true picture of what is outstanding.

7.6 Creating a purchase order

Screen: /purchase/orders/new/

1. Select New purchase order.
2. Header: - Vendor. - Order date and expected receipt date. - Warehouse — where goods will arrive. This determines which receipt transfer is created. - Payment terms — default from the vendor; drives the bill due date. - Currency — if buying in a foreign currency, the rate is taken from the rate table on the order date (Chapter 12).
3. Lines — item, quantity, unit price, tax. Taxes default from the item.
4. Check the totals and Save.

7.7 Confirming

Screen: /purchase/orders/<id>/confirm/

Select Confirm. The order becomes a committed purchase order, and the receipt and bill buttons become available.

If your organisation routes purchase orders through an approval process in SAP Business One, see Chapter 24 — the approval portal is a separate screen and the SAP document, not this one, is the one being approved.

7.8 Receiving the goods

Screen: /purchase/orders/<id>/receipt/

1. Open the confirmed order.
2. Select Create receipt. An incoming transfer is created in Inventory.
3. When the goods physically arrive, open the transfer and: - Enter the quantities actually received. - Enter lot or serial numbers if the item is tracked, and expiry dates if it uses them. - Validate.

Validating is the moment stock increases and is valued.

Partial receipts

Enter what actually arrived and validate. The order still shows the remainder as outstanding, and you create a second receipt when the balance arrives.

Over-receipt and short delivery

Receive what arrived, not what was ordered. If the supplier short-ships permanently, either amend the order or close it — leaving it partially open forever makes the outstanding-receipts report useless.

7.9 Recording the vendor bill

Screen: /purchase/orders/<id>/bill/

1. Open the order.
2. Select Create bill. A draft vendor bill is created in Accounting.
3. Open the bill and check it against the supplier's paper invoice: - Vendor bill number — enter the supplier's own reference. This is what prevents paying the same invoice twice. - Bill date — the supplier's date, not today's. The due date is calculated from it. - Quantities and prices — match to the invoice, not to the order, and investigate any difference before posting.
4. Post the bill.
5. Pay it when due — see Chapter 12.

The three-way match

Before posting, satisfy yourself that three documents agree:

Purchase order   what you agreed to buy
Goods receipt    what actually arrived
Vendor bill      what you are being charged for

A difference between any two is a question for the supplier, not a rounding to accept.

7.10 Landed costs

Freight, duty and clearing charges belong in the cost of the goods, not in a general expense account. Record them as landed costs so stock is valued at what it truly cost. This is done in Inventory — see Chapter 8, section on landed costs.

7.11 Cancelling and unlocking

7.12 Daily routine

Daily
  [ ] Review /purchase/dashboard/ for orders past their expected receipt date
  [ ] Chase suppliers on overdue receipts
  [ ] Enter bills for goods received, matching each to its receipt
  [ ] Convert accepted RFQs; cancel the ones you did not accept

Weekly
  [ ] Review outstanding RFQs and close stale ones
  [ ] Review partially-received orders and decide: chase, amend, or close

7.13 Troubleshooting