- Roadmap
- 28-Jun-2024 04:07:27
Roadmap ERP Glides You Through Automated Purchase Order Processing. Also, Know the Foolproof Mechanism of 3-way Matching in Accounts Payable
In this blog, we walk you through a step-by-step narrative on how manual processing of a purchase order is laborious, time-consuming, and impedes business operations; whereas, automated purchase order processing through Roadmap ERP software gains greater efficiency and saves more time and cost.
Let's take the case of David, who works in the Purchase Department of YTQ Company. David is responsible for purchase orders and correspondence to suppliers. One such time, he encountered several issues like errors, approval delays, and inefficiency in processing purchase orders manually through spreadsheets and paperwork. At some juncture, these have led to a shortage of material requirements, consequently affecting the production process.
All these issues have come to the attention of Mr. George, the CEO of YTQ Company. Mr. George arranged a board meeting with the executive directors and senior officials and discussed this ongoing critical issue. The senior manager of the Purchase Department brought Roadmap ERP software to the table and explained the benefits of integrating and streamlining all the business processes. After enough consideration and discussion, YTQ Company has unanimously approved and implemented a robust, automated Roadmap ERP software system.
YTQ Company has been witnessing a dramatic change in operational efficiency through seamless business processes soon after implementing Roadmap ERP software. Their bottom line has increased, gearing towards remarkable growth with reduced operational costs, downtime, and human errors.
Are you wondering how it has happened?
Let's see how Roadmap ERP automates the complete process from purchase requests and orders to goods delivery and invoice payment with greater efficiency and reduced cost.
David first identifies material requirements and initiates the purchase requisition through Roadmap ERP software for approval. The purchase requisition lists the required products or services, the total number of quantities, price specifications, and the specified vendor accurately.
Roadmap ERP automatically routes the purchase request to the manager of the Purchase Department for verification and approval before it is generated into a purchase order (PO). Also, it enables approvers to receive notifications of pending requests and can assign backup approvers if needed to eliminate bottlenecks.
Once the purchase request is approved, it is converted into a purchase order and automatically sent to the respective supplier. The supplier verifies and confirms the purchase order (PO). The invoice and the delivery note are generated and sent along with the goods.
Goods Receipt Note (GRN)
Upon arrival of the goods at the company's entrance, it undergoes a gate entry process against the delivery note and the invoice corresponding to the purchase order. The goods will then move to the store department, where they perform physical checks to ensure the received goods are without any damage or discrepancies and generate a Goods Receipt Note (shortly called GRN) in the Roadmap ERP software. GRN is an internal document that notifies the received goods conform to the purchase order.
The Quality Control receives the notification immediately once the GRN is generated referring to the inspection of the incoming goods. The authorized personnel inspect the condition of the received goods/materials based on the quality parameters. On completion of the inspection, the quality personnel will post the GRN and Quality Inspection Report (QIR), indicating acceptance of the delivered goods.
Following the process, Roadmap ERP software displays a pending Material Receipt Voucher (MRV). Material Receipt Voucher (MRV) is a document that records new goods/items and updates the inventory levels. The personnel in the inventory department process the Material Receipt voucher, and the goods will then move to the respective warehouse.
3-Way Matching Process
Here is the final stage of the purchase order processing - the invoice payment. In the Roadmap ERP-Finance Accounts Payable (AP) application, the 3-way matching feature compares the purchase order, goods receipt note (GRN), and invoice to ensure that all these documents precisely match before approving the payment to the supplier. The purchase order and the invoice will be cross-verified for accuracy, acknowledging the quantity and price of the items based on the GRN data. Payment will be made once the verification is complete.
This 3-way matching feature enables invoice reconciliation seamlessly and ensures conformance to the requirements and expectations of the buyer. It also prevents fake invoices or overpayments from being processed through the automated system.
Thus, Roadmap ERP software's integrated and automated capabilities speed up the purchase order (PO) process with reduced cost, increase efficiency, and promote clear communication between the requestor, the buyer, and the supplier to ensure products and services are delivered as anticipated.
