The document outlines the key steps in the purchase process: 1. A purchase requisition is created by the stores department specifying what items are needed, quantity, delivery date, and other details. 2. The purchase department explores suppliers, requests quotations, and selects the supplier based on factors like price, quality, and delivery terms. 3. A purchase order is issued to the chosen supplier authorizing the transaction. 4. Upon delivery, goods are inspected and a receipt note is issued and copies sent to accounts and stores for updating records. 5. The supplier's invoice is checked against the receipt note and purchase order before payment is approved.

1. 1. Favourable terms (Trade discount on
large purchases)
2. Specialised Knowledge of Purchase
dept personnel
3. Better control by Purchase dept (not by
all)
4. Convenient compilation, consultation
of records
5. Uniform policy – procedures – practices
6. Avoid duplication of efforts

2. 7. Liaison b/w production & service depts
8. Economy to vendor

3. 1. Delay in process
2. Branches can’t take advantage of local
purchases
3. Misunderstandings b/w purchase dept
and branches
4. High initial cost

4. They need to decide;
1. What to purchase?
2. When to purchase?
3. Where to purchase?
4. How much to purchase?
5. At what price to purchase?
So the following procedures are done;
1. Receiving purchase requisition
2. Exploring sources of supply & choose
3. Preparation & execution of pur/ orders
4. Receiving & Inspecting
5. Checking & Passing of bills for payment

5. Swadeshi Co Ltd
No….…. Purchase Requisition Date……....…
Regular / Special Date by which
materials required…..
S. No Description Stores Code No Qty required Remarks
Requested by…….. Approved by………….
For use in the Purchase Dept
Quotations invited on……..……
From 1. ………………………………..
2. ………………………………..
3. ………………………………..
Other Action………………………..…. Purchase Officer
1. What? Description, Stores Code
2. When? Required date
3. How much? Qty required
4. Whom? Quotations invited

6. Prepared by (Regular) Store Keeper
(Special) Dept Head
Approved by An executive Works manager
Plant Superintendent
No of copies Triplicate
1. original Purchase dept
2.Duplicate store keeper
3. Triplicate Authorising exec
Action starts Only after receiving requisition
from the storekeeper

7. Source is selected after receiving purchase
requisition
For every group of material, separate list
of suppliers (Name & address) maintained
by the purchase dept
Quotations are received from them by
issuing tenders
Comparative statement of quotations is
Prepared & desirable supplier is selected

8. How do they choose the supplier?
1. Manufacturing capacity, reliability
2. Financial conditions of supplier
3. Mgt of supplying firm
4. Price quoted
5. Qty applicable to the quoted price
6. Terms of payment
7. Terms of delivery
Purchase price should b the least
(ie., uniform quality – right time, price)

9. Swadeshi Co Ltd
Purchase Order
No……. Dated ………… Purchase Requisition No……….
To (Supplier)
Your quotation No……dated…….has been accepted.
Please supply the following items of stores in accordance
with the instructions mentioned therein and terms and
conditions listed on the reverse of this purchase order
S No Description Qty Rate Total
cost
Delivery
date
Remarks
Terms of Delivery
Terms of Payment
Packing and Dispatch Instructions
Discount Allowed Purchase Officer

10. After choosing the supplier, purchase dept
prepares purchase order
It authorizes supplier to supply particular
Material. It is the evidence of contract.
It binds the buyer and supplier to the
terms mentioned therein.
It is the document authorizes receiving
dept to receive, A/c dept to pay.
3 – 5 copies may be prepared (supplier-
receiving dept-initiator –A/c –purchase
dept)

11. Swadeshi Co Ltd
Goods Received Note
Supplier’s Name……. No …………
Purchase Order No……… Date ………
S No Description Code No Qty Date Amount Remarks
Received by…………… Inspected by……………
Store keeper…………. Costed by……………….
Stores Ledger Posted by……………

12. Large concerns Separate Receipt
& inspection dept
Small concerns Store keeper does it
1. Inspection is completed
2. Goods receiving clerk enters t in GR Note
3. Five copies of note are prepared (1 for
Receiving dept -4 to store keeper along with
material)
4. Sore keeper check qty –qly- and sign all 4,
keep 1 copy & send copies to purchase, A/c
and Initiator.

13. When invoice received from supplier, it is send
to a/c section to check authenticity &
arithmetical accuracy
Qty & price are checked with ref to stores
receiving note
A/sc section certifies & passes the invoice for
Payment
Cashier makes the payment as per T&C
mentioned in the purchase order