Purchase & Payables

Purchase Indent Overview

Purchase Indent Process Flow

Selection of
Supplier max
upto 5

Purchase Indent
Convert to
Start Sales Order from SO or Approved YES
Purchase Quote
Direct Indent

NO

End

Departments will raise the Purchase Indent based on Sales Order.

The purchase Indent defined with header and line option with max 3 suppliers will be selected in the
requisition and to convert the quote automatically for the no. of suppliers selected in the requisition.

Below are the fields that will be updated during the creation of Purchase Indent:

Vendor Master Overview

The Purchase Indent is created without mentioning the supplier details. This Purchase Indent is then sent
to the Purchase Department to carry out activities like selecting the supplier, creation of supplier in case
of new supplier. Vendor Master will be created by the Purchase team.

Vendors are to be defined based on the various groups. TDS details to be input in the vendor master for
each vendor. Business Central has the standard functionality available to define the vendor rate contract
against each vendor including the period details.
No. series for separate vendor groups will be defined. Vendor Bank details will be defined in the vendor
bank master and vendor multiple locations with GST details will be defined in vendor order addresses.
Below are the groups defined for Vendors
• Domestic
• Import
• Intercompany
Purchase Quote Overview

Purchase Quote Process Flow

Import Vendor
with single
quote based on
Rate Contract

Purchase Quote
Convert Quote
Start creation from Purchase Quote Approved YES
to PO
indent

NO

Quote Comparison Parameters

Price/Payment terms/Lead Time/ End
Warranty/Technical Score/Quality
Score

The Purchase Indent is created without mentioning the supplier details. This Purchase Indent is then sent
to the Purchase Department for carrying out activities like selecting the supplier, creation of supplier in
case of new supplier and creating max 3 quotes as received from respective suppliers. The purchase
department will attach the respective quotes against the Purchase quotation created. Purchase
Department will check the quote comparison report and send the finalized quote for approval.

For Import Order based on the Purchase Indent, Purchase quotation is created. Single Vendor Quote
will be created if the Rate contract is defined by the vendor. Blanket Order will be created where the
product is approved based on the price contract. Purchase Order will be created against the Blanket
Order.
Purchase Quote amount will not exceed the Budget amount as per the Sales Order Line-Item Project
wise.

The quote comparison report is evaluated based on various factors like:

• Price
• Payment Terms

The finalized quote gets approved, and the purchase Department will convert the quote into PO. If the
quote is rejected it goes back to the purchase Department with the rejection reason. The purchase
department goes back to the respective vendor and negotiates to get the revised quote. This revised
quote is sent for approval to respective authorities. Once approved the purchase department converts
the quote into Purchase Order.
Purchase Order Overview

Purchase Order Process Flow

PO will be auto
emailed to
Vendor

Approved
Purchase Order
Quote Booking of GRN
Start (Domestic & Approved YES
(Domestic & against PO
Import)
Import)

NO

End

Once the Purchase quote is approved, the purchase department converts the quote into Purchase Order.

Business Central supports multiple vendors’ addresses in a single vendor. Business Central has the
functionality to amend the PO and has the version maintained for each PO.

The purchase Order amount will not exceed the Budget.

Blanket purchase order will be booked based on the blanket agreement order will be converted to
Purchase order as per the blanket agreement.

GRN

GRN Process Flow

Serial no.
Increase
On receipt of tagging based Booking of GRN
Start warehouse/HO Quality Test
goods start GRN on goods against PO
Inventory
received

Check the
PO will be auto supplier Invoice
emailed to QR Code for Quality &
Vendor Value

End
All released PO’s will be available for GRN. The roles of the Warehouse user will be defined in a manner
where he can view all the released Po’s and process GRN for those released Po’s only. He will not be able
to edit any of the data in the Purchase order. The Warehouse user will require physical vendor documents
to refer (Challan) and based on these documents; the Warehouse user will enter the Quantity in the
Quantity to Receive field as per the materials received in the warehouse. Before booking the GRN, the
user selects Batch No. for respective items in the item tracking functionality option in the Purchase Order
page and QR code functionality will be applicable with the basic details regarding the product as per UOM
and through receive option, GRN to be booked against the PO. Once the GRN is completed, the warehouse
inventory is updated accordingly.

In the event of a short quantity received than the ordered quantity, warehouse would process the GRN
based on the receipt of material and the PO to be short closed for the outstanding quantity if not to be
received from supplier.

Purchase Invoices

Purchase Invoice Process Flow

Respective
Ledgers are
Updated

Vendor Bill is Posted

Purchase
Start received and Approved YES Purchase
Invoice Booking
Verified Invoice

NO

End

Purchase Invoices Process Overview

Purchase invoices will be generated based on the vendor's invoice received from Vendor. This activity
will be done by the finance team who is based out of Mumbai H.O. Invoices will be linked to Goods
Receipt Notes (GRNs) to ensure that invoiced items match the goods received. Business Central has the
standard functionality to book the Purchase Invoice. The vendor Invoice no will be captured as a
reference during the booking of the Purchase invoice. Purchase invoices will capture essential
information such as vendor details, item descriptions, quantities, prices, taxes, and total amounts.

Once the Purchase Invoice related data is filled in, it will be sent for multi-level approvals. If the invoice
is approved by the authorized person, the finance user will be able to post the invoice. If there are any
 changes required, the invoice will be rejected for the required reason. The user will make the required
changes and send the invoice back for approval.

The return transaction if any will be booked against the invoice through return order process.

Once the invoice is posted, the financial ledgers get updated. Below are the ledgers which will get
updated:

✓ Purchase
✓ Creditors
✓ GST
✓ Inventory
✓ TDS

Dr/Cr Ledgers Setup

Debit Purchase Account General Posting Setup
Goods Received not
Debit General Posting Setup
Invoiced
Inventory Posting
Debit Inventory
Setup
Debit CGST Receivable GST Posting Setup
Debit SGST Receivable GST Posting Setup
Direct Cost Applied
Credit General Posting Setup
Account
Inventory Account Inventory Posting
Credit
(Interim) Setup
Credit Creditors Vendor Posting Group
Vendor Payments

Payment against
PO (Advance
Payment)

Due based on Vendor

Start Payments the Payment Payment End
Terms against Invoices

Indirect
Expense

Vendor Payments Process Overview

The vendor payment process is managed by the finance team which is based out of Mumbai H.O.
Business Central has the standard functionality of Suggest Vendor Payment for populating the vendor
invoices based on the due date. Finance users will run the suggested vendor payment functionality for
the pending invoices to be paid to the vendor. The system shows the invoices due to be paid to the
vendor which is further sent for approval. Based on the cash flow available and the Payment details, the
authorized person approves the payment to be processed. Once Approved, the vendor payment is
posted in Business Central.

On posting the vendor payment Journal, the payment file will be pushed to the bank portal for further
approval. The file will contain details of the vendor’s name, Payment method, amount & vendor bank
details. Once this is verified and approved on the bank portal by the authorized person from the finance
team, the payment will be processed by the bank to the respective vendors. This entire vendor payment
process through the bank will have integration with respective bank portals for processing of the
payment. Respective GL’s will be updated on posting of the Vendor payment Journal:

✓ Vendor
✓ Bank

Dr/Cr Ledgers Setup

Debit Creditors Account Vendor Posting Group
Bank Account Posting
Credit Bank Account
Group

Business Central has the standard functionality of settlement to settle the invoices against single or
Multiple Invoices.