2. In a business, when you want to purchase
something, there is usually a procedure in
place for making those purchases.
The purpose of having a procedure is to
justify purchases, to account for money
spent and goods received.
4. STEP 1: Purchase Requisition
A form to be
completed by
individuals within a
business to request
that items or
services be
purchased.
5. STEP 2: PURCHASE ORDER
Photo source:https://www.purchasecontrol.com/blog/purchase-order-vs-invoice/
A purchase order
(PO) is the official
confirmation of an
order.
It is a document sent
from a purchaser to
a vendor that
authorizes a
purchase.
6. STEP 3: REQUEST FOR
QUOTATION FORM (RFQ)
is a standard business
process most often used to
invite suppliers to offer to
supply specific goods or
services on a competitive
basis.
An RFQ typically asks for
the price per item, payment
terms, quality requirements
and length of contract.
Photosource: http://napc.gov.ph/content/request-quotation-10?throbber=1
7. STEP 4 : REQUEST FOR
INFORMATION (RFI)
A Request for Information
(RFI) is the document
created by demand or
buy side companies to
obtain service and
resource information from
supply side companies
Source:https://trainingindustry.com/wiki/outsourcing/request-information-rfi/
8. STEP 5: NEGOTIATE
CONTRACT & Send P.O
Next the negotiations
regarding price,
availability and
customization options are
undertaken.
The contract regarding
the purchase of the goods
or services is completed.
9. STEP 6 :GOODS RECEIVING
NOTE
It is a document
produced when
goods are received
into the company/
factory.
It is usually
accompany goods
to any inspection & is
used to check
against invoices
before payment.
Source:https://mobiphil.com/goods-received-note-format/goods-received-note-format-impressive-food-receiving-control/
10.
11. STEP 7: RECEIVE AND
CHECK INVOICE
“THREE-WAY MATCHING” (arrived with the order) are lined up
and reconciled to pinpoint discrepancies and ensure that the
transaction is accurate. Discrepancies should be addressed
once they are discovered.
12. INSPECTION CERTIFICATE
is issued by the Inspection
Agency concerned certifying
that the consignment has been
inspected before shipment as
per the requirements of the
Exports (Quality Control and
Inspection) Act,1963.
This certificate is required:– by
customs before allowing
shipment of goods or– by a
banker to negotiate the
documents.
Photosource:https://www.tuv.com/en/corporate/business_customers/product_testing_3/worldwide_market_access_1/mas
13. PRO FORMA INVOICE
is a preliminary
bill of sale sent to buyers
in advance of a
shipment or delivery of
goods.
The invoice will typically
describe the purchased
items and other
important
information such as the
shipping weight and
transport charges.
Photo source:https://cleartax.in/s/pro-forma-invoice-gst
14. STEP 8: AUTHORIZE
INVOICE& PAY VENDOR
Three documents must match
when an invoice requests
payment -.
The agreement of these
documents provides
confirmation from both the
receiver and supplier.
Any discrepancies must be
resolved before the recipient
pays the bill. Usually, payment is
made in the form of cash,
check, bank transfers, credit
letters or other types of
electronic transfers.
15. STEP 9: Record Keeping
After the payment process, buyers make a
record of it for bookkeeping and auditing.
All appropriate documents right from
purchase requests to approved invoices
are stored in a centralized location.
19. AIR WAY BILL
Photo source:http://wap.dhl.com/serv/usawb.html
is a document that
accompanies goods
shipped by an
international air
courier to provide
detailed information
about the shipment
and allow it to be
tracked.
20. RAIL WAY BILL
is a document used for the
shipments via a railway.
The document is prepared
by the shipping agent or the
railway line that is going to
transport the shipment after
having received from the
shipper the shipping
instructions.
A draft railway bill is given to
the shipper in order to accept
and consign with the terms
noted and after this the
original copies are issued.
21. CERTIFICATE OF ORIGIN
are often required-to
meet Customs
requirements in the
importing state– to
comply with Banking
requirements– for
other official and
commercial reasons
Photosource:https://incodocs.com/blog/certificate-of-origin-from-chamber-of-commerce/
22. Export Sales Contract
is Agreement between
buyer and seller, stipulating
each and every details of
the transaction.
– Legally binding
document.–
It reduces the probabilities
of disputes & differences
as it fixes the role and
responsibilities of each
party.
The RFI is a standard business process used by customers to collect written information regarding the capabilities of various suppliers, which will better inform buying decisions.
The vendor delivers the promised goods/services within the stipulated timeline. After receiving them, the purchaser examines the order and notifies the vendor of any issues with the received items.
Packing List• It is a consolidated statement in a prescribed format detailinghow goods are packed, marked and numbered including weight and dimensions of each package.• It is useful for customs at the time of examination and warehouse keeper of buyer to maintain inventory record and to effect delivery.• It has many details common from invoice but it does not indicate unit rate value of goods.
It satisfies the conditions relating to quality control and inspection as applicable to it and is certified export worthy.
This certificate bears cross references of invoice or contract number
Inspection Certificate• Inspection can be done by—– Inspection Agency appointed by the Government
Pro forma, Latin for “as a matter of form” or “for the sake of form,” invoices often come into play with international transactions, especially for customs purposes on imports
A two wheeler customer might agree to the price of a bike on the pro forma invoice. The supplier will deliver the bike once it is ready and the customer will pay when the invoice is received. The final invoice amount will be the same or close to the amount on the pro forma invoice.
3 way matching-the invoice itself, the receiving document and the original purchase order
Are Documents at Post-shipment stage are naturally those which are prepared after the shipment.•
Post-shipment Documents•
-These documents include the following:-–
Mate Receipt– Bill of Lading– Airway Bill– Roadway/Railway Bill– Post Parcel/ Courier Receipt– Invoices (including consular invoice)– Certificate of Origin– Insurance Certificate or Policy– Bill of Exchange
The bill of lading is usually the first common document used in international shipment and it is a contract between the owner of the goods and the carrier. It will state what goods are shipping, where they are going and where the shipment started. In addition, once the shipment is picked up, the bill of lading serves as a receipt issued by the carrier.
A transport document for maritime shipment which serves as evidence of the contract of carriage and as a receipt for the goods, but is not a document of title. The sea waybill indicates the on board loading of the goods and can be used in cases where no ocean bill of lading and no other document of title is required. For receipt of the goods, presentation of the sea waybill by the consignee named therein is not required, which can speed up processing at the port of destination. See bill of lading; ocean bill of lading.
is a document that accompanies goods shipped by an international air courier to provide detailed information about the shipment and allow it to be tracked. The bill has multiple copies so that each party involved in the shipment can document it. An air waybill (AWB), also known as an air consignment note, is a type of bill of lading
to comply with Banking requirements– for other official and commercial reasons.
There are two categories of Certificate of Origin :1. Preferential Certificate of Origin and2. Non-preferential Certificate of Origin
Export Sales Contract•