Overview
Complete procurement system for ordering raw materials from suppliers with approval workflow and automatic inventory updates.
Create PO
Approval
Receive Goods
Update Stock
Purchase Order Workflow
Draft
PO created, items added, not submitted yet
Pending Approval
Submitted, waiting for manager approval
Approved
Manager approved, sent to supplier
Received
Goods received, GRN created, inventory updated
Rejected
Manager rejected with reason
Creating Purchase Order
Step 1: PO Header Information
Step 2: Add Items
| Raw Material | Qty | Unit Price | Total |
|---|---|---|---|
| Chicken Breast | 50 kg | $8.50 | $425.00 |
| Tomatoes | 30 kg | $2.00 | $60.00 |
| Lettuce | 20 kg | $1.50 | $30.00 |
| Total Amount: | $515.00 | ||
Step 3: Submit for Approval
✓ Review all items and quantities
✓ Verify supplier and delivery date
✓ Add notes if needed
✓ Click "Submit for Approval"
✓ Status changes to "Pending Approval"
Approval Process
Approve PO
Manager Reviews
Check items, quantities, prices
Verify Budget
Ensure funds available
Click "Approve"
PO sent to supplier
Email Notification
Supplier receives PO
Reject PO
Identify Issues
Wrong items, high prices, etc.
Click "Reject"
Enter rejection reason
Notify Creator
Employee receives notification
Revise & Resubmit
Make corrections and resubmit
Goods Receipt Note (GRN)
Receiving Goods
When supplier delivers, create GRN to record received items and update inventory
GRN Creation Process
Goods Arrive
Supplier delivers items to branch
Physical Inspection
Check quality, quantity, expiry dates
Create GRN
Enter received quantities (may differ from ordered)
Auto-Update Inventory
System adds stock with FIFO batches
Accounting Entry
Dr. Inventory, Cr. Accounts Payable
Partial Delivery
If supplier delivers less than ordered:
System records actual received quantity. PO remains open for remaining items.
Real Examples
Example 1: Complete PO Cycle
Day 1: Create PO for 100 kg chicken @ $8/kg = $800
Day 1: Submit for approval
Day 2: Manager approves PO
Day 2: Email sent to supplier
Day 5: Supplier delivers 100 kg
Day 5: Create GRN, inspect quality
Day 5: Inventory updated: +100 kg chicken
Day 5: Accounting: Dr. Inventory $800, Cr. Payable $800
Example 2: Partial Delivery
Ordered: 50 kg Tomatoes, 30 kg Lettuce
Delivered: 50 kg Tomatoes, 25 kg Lettuce
Action: Create GRN for received items
Result: Inventory updated with actual quantities
Status: PO partially received, waiting for 5 kg Lettuce
Example 3: Rejected PO
Created: PO for $5,000 worth of items
Issue: Exceeds monthly budget
Manager Action: Reject with reason "Over budget"
Employee Action: Reduce quantities, resubmit
New PO: $3,500 worth of items
Result: Approved and processed