Purchasing and Procurement tool in SAP Business One ERP
Are you looking to optimize the entire procurement process in your organization?
It is now possible with “SAP Business One”, the best ERP solution for manufacturing businesses in India.
Purchasing as we know is not just ordering goods and paying for the same. It is the process that ensures the continuous flow of all the required goods and items in the company whenever and wherever it is required. SAP Business One ERP, as a fully integrated solution for businesses, assists in running the purchasing process completely, right from purchasing order till invoicing and payment. SAP B1 checks the inventory goods and automates the entire purchasing process when needed which helps in keeping the inventory intact. This helps in better inventory and financial management of an organization. Alongside the company can also keep track of the vendors consistency in delivering the goods through the historical data.
The purchasing module’s procurement process in SAP Business One consists of the following steps of documents to carry out the processes:
Purchasing order > goods receipts PO > A/P invoice > outgoing payments.
The process of purchasing in SAP Business One starts by requesting quotation to the vendor. For that manufacturers can contact as many vendors as possible with the help of the request quotation in the SAP B1 software. Once the company decides which vendor is best suited for them, they can move towards ordering the goods. To order items through a vendor, creating a purchasing order document can help businesses to sort their work.
- The Purchasing Order (PO) document is provided to the vendor consisting of all the items and goods that are required once agreed with the quality and ricing of the goods.
- The Goods Received PO is the document that the delivery of goods and items is completed from the vendor side to the receiving company.
- A/P Invoice PO document makes sure that the invoice is made into the vendor account for the payment request from the company.
- Outgoing Payment PO document enables the company to process the outgoing payment to the vendor account.
Process and effects of procurement process on inventory and accounting:
Firstly, the purchase order is created wherein no posts are present in the inventory and accounting. Once the goods or item receipt is entered the first posting takes place. Then with the help of GRPO the journal entry is automatically created which later helps in suppling details such as the value of goods received to both the debit side of an inventory account and credit side of the allocation cost account in the accounting section.
The goods receipt purchase order terminates when the account payable invoice posts. Following that, a further journal entry is created by the A/P invoice, posting the bill amount to both the credited side of the vendor account and company’s debited allocation expenses account. In exchange for tracking and recording, the system records the amount paid by the company to the vendor and clears the balance from the goods receipt Purchase Order in company’s allocation cost account.
Get the best SAP Business One demo:
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