Hi Helen,
In my organization, the PO is raised by the Purchasing dept after approval of quotes. Ideally the PO needs to have a two tier approval process. With automation, the PO fill first pop up for approval with the Head of the Purchasing Dept. Once done the second and final tier is the Finance Head . Only then can the PO be released/sent.
The Finance Head performs the due diligence of verifying the quotes etc
There is a system posting of the PO done to stocks and WIP
With regard to Materiality- The ERP should have codes like for stationery items etc. for which the PO can be released at first approval itself ie by the Purchasing Manager.
For the PO to further be a control tool.. There needs to be a proper process of 'Receiving" the items and matching against the PO. If in error the supplier invoice cannot be posted. This is even in the case of non stock items like stationery etc.
However, this does make it tedious if there is an error . First the PO will need to be corrected which will again follow the approval process.This will reverse the preivous automated postings. And then can the 'item' be received.
I hope this helps.
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Gloria Menezes CMA
Dubai
United Arab Emirates
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Original Message:
Sent: 08-01-2022 12:53 PM
From: Helen Marie Heenan
Subject: Purchase Order Best Practices
Hello,
I am the Controller for a product design firm and we are implementing NetSuite and updating our processes to be more effective and efficient. Are there Best Practices regarding the PO process and materiality threshold. Currently, a PO is used for each purchase (the majority are pass thru expenses to the client) and they are being used more for information purposes (project no, etc.) and less for control.
Any insight is appreciated.
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Helen (Holly) Marie Heenan CMA
Director/Manager
Philadelphia PA
United States
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