Purchasing is the process of ordering, receiving and paying for goods or services necessary in the operations of the business.
In many businesses a system is put in place to control this process, this system typically begins with a “purchase order”. The Purchase Order is a sequential numbered document that describes the product or service to be ordered, the amount the business is to pay and is signed by a person authorizing the purchase.
- • A copy of “the PO” goes to the Receiving Dept alerting them a product has been ordered and is being shipped and
- • a copy goes to the Accounts Payable Dept letting them know a product has been ordered and will need to be paid.
- • Once the product is received the Receiving copy of the PO is sent to Accounts Payable alerting them the product was received and the invoice can now be paid.
This completes the purchasing process, as the product has been ordered, received and paid.