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Purchase Order Form in Simplified Format document sample
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The Acquisition (Purchasing) Cycle
Consult with suppliers
Process requisitions
Chapter 9
Develop agreements with suppliers to purchase good or
services in the future
Receive goods or services from suppliers
Chapter 10
Recognize claims for goods and services received
Select invoices for payment
Write checks
1
Overview of Purchasing and Receiving
Documenting the (any) process
Apply our toolkit
Overview Detailed
Identify Annotated Workflow
activity activity
events narrative table
diagram diagram
2
Purchasing/Receiving Events
Prepare requisition (E1)
An employee (requestor) recognizes a need and completes1 a purchase requisition
form for the item needed. The item could be materials inventory, office supplies or
services.
Approve requisition (E2)
The employee gives2 the requisition to the supervisor. The supervisor reviews3 the
requisition. If the requisition is reasonable and budget is available, the supervisor
approves4 (or modifies and then approves) the requisition.
3
Purchasing/Receiving Events
Record requisition (E3)
The supervisor gives5 the signed requisition to the secretary. The secretary enters6
the information on the requisition into the system. The information includes the
Employee# of the employee who made the request and the Employee# of the
supervisor. The system checks7 the Employee table to verify that both employees’
information is valid. The computer checks8 to determine that the order is to an
approved supplier (supplier should be in the Supplier table). If the odder is for
inventory, the system checks9 that an inventory record for the item already exists in
the Inventory table. The system checks10 that the information entered is complete. It
then records11 the information in the Requisition table.
Prepare purchase order (E4)
The purchasing officer reviews12 new purchase requisitions in the Requisition table.
The officer might hold back a requisition if the dollar amount is such that the order
should go out on bid or if the purchase involves a contract and the contract has not
been completed. The purchasing officer also examines the requisition to determine
whether the items can be purchased cheaper from one of the other suppliers with
which the company has a relationship.
4
Purchasing/Receiving Events
Prepare purchase order (E4) continued
If the requisition satisfactorily meets the requirements, the purchasing officer
records13 approval in the system. The information entered for the purchase
requisition is then used to create14 a record in the Purchase_Order_Table. The
purchase order is printed15 and then either faxed16 or mailed to the supplier.
Receive goods (E5)
Usually, the supplier sends17 the goods to a central receiving facility at ELERBE.
The receiving clerk receives18 the goods and examines19 the packing slip for the
Purchase_Order#. The Order# is then entered20 into the system, and the receiver
enters21 the Quantity_Received. The computer creates22 a record in the Receipt
table. If the purchase is of materials inventory, then the Quantity_On_Handis
updated23 in the Inventory table. The items ordered are delivered24 to the person
who made the request. The requestor signs25 a form indicating that the items have
been received from the receiving clerk.
5
Workflow
Table
6
Overview Activity Diagram
R: Requisition (in progress)
Prepare
Requestor Requisition
(E1)
R: Requisition (approved)
Approve
Supervisor Requisition
(E2)
Record
Secretary Requisition
(E3)
P: Purchase Order
Purchasing Prepare
Purchase
Officer Order (E4)
Receive
Receiving Goods
Clerk (E5)
Computer E: Employee I: Inventory S: Supplier RQ: Requisition S: Supplier PO: Purchase R: Receipt I: Inventory
7 Order
Detailed Activity Diagram: E1, E2, E3
Prepare Give2 req. to
Requestor requisition1 supervisor
Review3 Approve4 Give5 req.
Supervisor requisition requisition to secretary
R: Requisition (in progress)
Secretary Enter6
requisition
R: Requisition (approved)
Check7 Check8
employee supplier
Computer S: Supplier
Check9 Check10 Record11
inventory completeness requisition
E: Employee
I: Inventory RQ: Requisition
8
Overview of Purchasing and Receiving
Documenting the (any) data/files
Apply our toolkit
Events and UML class Record
tables used diagram layouts
9
Events and Tables
10
UML Diagram
Goods/
Events Agents
Services
(m,1) Employee
(requestor)
(m,m) (E3) (m,1) Employee
Requisition (supervisor)
(m,1)
(m,m)
(E4) (m,1) Employee
• Could use a Inventory Purchase (purchasing
single employee Order officer)
(m,1)
table, but this high
lights roles
(m,m) (E5)
• Simplified by Supplier
Receipt
showing a single table (m,1)
for each requisition,
PO and receipt rather Employee
(m,1)
than two (receiving
clerk)
11
Master Files
Supplier Table
Employee Table
Inventory Table
12
Transactions Files
Requisition Table (E3)
Requisition Detail Table (E3)
Purchase
Order
Table (E4)
Purch.
Order
Detail
(E4)
Receipt Receipt
Table Detail
(E5) (E5)
13
Risks in Purchasing & Receiving
Execution Risks
Receipt of goods missed by supervisor
Purchasing officer did not prepare order
Shipment not received
Delays in any event
Duplicate requisitions
Supplier sends wrong product
Recording Risks
Secretary enters wrong requisition information
Original requisition for wrong product
14
Acquisition Workflow Controls
Segregation of duties
Requestor of products does not authorize
Use of information from prior events
Purchase officer reviews requisition prior to creating PO
Required sequence of events
Two checks of requisition, one pre-secretary, one post-secretary
Follow-up on events
Could look at Quantity_Received to find open orders and follow
up
15
Acquisition Workflow Controls
Sequence of prenumbered documents
Purchase orders
Recording of internal agent(s) accountable for event
Requestor and Supervisor are stored in tables
Limitation of access to assets and information
Requestor, Supervisor and Secretary can only read PO details
whereas Purchase Officer and write
Reconciliation of records with physical evidence of assets
Compare actual and recorded Quantity_on_Hand
16
Menu for Purchasing and Receiving
Chapter 9
Order
17
Supplier Table Maintenance
Execution Risks
Supplier table is a list of approved suppliers
and can reduce risk of using wrong supplier, ordering
unauthorized goods/services, and getting inferior products
Record Entry and Recording Risks
Reduce risk of recording wrong supplier (e.g. use in list)
Controls
Supplier table used as a control for recording risks so it’s important
to get it right!
Limit access for ability to perform maintenance
Establish standards for being a valid supplier and monitor
Have data entered twice to try to catch entry errors
18
Inventory Table Maintenance
Execution Risks
Wrong product or quality, quantity or price
Create unique item# and maintain quantities on hand, ordered, etc.
Record Entry and Recording Risks
Reduce risk of recording wrong product or price (e.g. use in list)
Controls
Inventory table used as a control for recording risks so it’s important to
get it right!
Limit access to ability to perform maintenance
Requires skill to know re-order point and which G/L accounts to
use
Have data entered twice to try to catch entry errors
19
Record Requisition (E3, B1)
Record Entry and Recording Risks
Use workflow controls to prevent recording a requisition that never
occurred (e.g. sequence of events requires approvals)
Use workflow controls to prevent missing a requisition, late recording,
or duplication (e.g. sequence of events requires notification by
secretary when requisition complete)
Additional Controls
Secretary should make sure that requisition is approved before entering
data
Use inventory status reports to monitor inventory levels
Execution Risks
Using information from prior events to control future events, e.g.
approval and assignment of Requisition#
20
Record Requisition (E3) Input Controls
Requistion# – Generated by computer
Employee# (all types) – Drop down list of employees and
referential integrity; display name when # entered
Department – Set up table and use drop down for entry with
referential integrity
Requisition date – Default to today and check format and
value
Supplier# and Item # – Drop down list, referential integrity
and request confirmation
Quantity and Price – check numeric value and use validation
rules; default price from Inventory table
21
Prepare Purchase Order (E4, B2)
Record Entry and Recording Risks
Use workflow controls to prevent recording a PO that never should
have occurred (e.g. require approvals, segregate duties, record agent)
Notify purchase officer as new requisitions come in and follow up on
open requests
Execution Risks
Review open POs to monitor status and avoid late or non- deliveries of
goods/services
22
Prepare POs (E3) Input Controls
Requistion# – confirm existence
PO# – generated by computer
PO_date – Default to today and check format and value
Employee# – Drop down list of employees and referential
integrity; display name when # entered
Shipping_Method - dropdown
Supplier# and Item # – Drop down list, referential integrity
and request confirmation
Supplier_Product# – Could use record checking if we keep
this data in Supplier table
Quantity and Price – check numeric value and use validation
rules; default price from Inventory table
23
Receive Goods (E5, B3)
Execution Risks
Ensure that shipment is right quantity, quality and price
Speed execution via quick data entry, e.g. scanner
Limit access to goods
Input controls
Main control is to carry over information from previous events
PO# and Item#
Automated data entry (scanning)
Show quantity? Perhaps we want the receiver count the items?
24
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REQUISITION PROPOSAL ALABAMA STATE PORT AUTHORITY DATE August 21 2007 McDuffie Island DEPARTMENT
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