Purchases Workflow

Purchases Workflow

Purchases Workflow

The diagram below (Figure 1) illustrates several possible workflows in the Purchases cycle. It’s important to note that the order shown in the diagram needs to be adhered to. For more information about which workflow to choose for a given situation, see Figure 2.

worklfows

Figure 1, Purchases Workflows

Workflow Scenario A

Consider this scenario: You notice that it’s time to replenish stock as several of your items have hit their re-order point. You create a Purchase Order and send it to your vendor along with a payment that is equal to 50% of the total cost as is required by the vendor A Purchase Order Prepayment is created to record the initial payment. A couple of days later, the boxes arrive and you create an Item Receipt. Next you receive your vendor’s invoice in the mail and create a Bill to record the liability. A Bill Payment is created when you send the check to the vendor for the remaining balance and this closes out the workflow.

A note about the Prepayment: Since there is no Bill when the Prepayment is created, it is shown as a credit with the vendor. When the Bill is created, a Application Bill Payment is created with a $0 balance. This document applies the initial payment to the Bill.

Workflow Scenario B

The vendor in this scenario does not require any payment be made with the order. This workflow is the same as Scenario A except that it does not include a Purchase Order Prepayment or an automatic Application Bill Payment.

Workflow Scenario C

Item Receipts are not a required step in a Purchases workflow and Scenario C illustrates this. In the case that this workflow is used with inventoried products, the point at which these products are brought into your inventory and available to ship or invoice is when the Bill is created. This workflow involves A Purchase Order, a Bill and a Bill Payment.

Workflow Scenario D

It is possible to complete a workflow without a Purchase Order. Scenario D includes the Item Receipt, Bill and Bill Payment documents.

Purchases Decisioning Cycle


purchases-cycle-decision-diagram
Figure 2, Purchases Decisioning Cycle.

Figure 2 is a decisioning tool to help you decide what to do next in the purchasing cycle.

  • The square shapes represent documents in CustomBooks™.
  • The question mark represents a point when the answer to a question can determine the path of the workflow.
  • Squares with a rounded right side are stopping points until something else happens and the workflow can continue.
  • The arrows indicate where to go next in the workflow.



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