Process Flow Purchase
Content
PURCHASE CYCLE & COST BOOKING TO PROJECT- (AS-IS)
Start
Purchase Requisition raised by the User
Requisition for Asset Code to President(Projects)
NO
Check for Asset Code?
Approval granted by President(Projects)
YES
Create Purchase Order (User or Purchaser)
Sent to Accounts for Asset Code creation
Release and dispatch of PO to the Vendor
Work done by Vendor and RA Bills submitted
ASSET CODE created
Manufacture of equipment by Vendor Service Entry made in the PO- PM Order is entered against the Service Entry
PM Order (Asset order type-OR07) created
Delivery of Goods/equipment by the Vendor
Goods Receipt (GR) done at Purchaser End
ASSET CODE entered in the PM order material issue by Purchaser Issue of Material from Store to the User through PM Order
We can view the Cost against each Asset at this point Before this point, it can be viewed PO-wise There is no tracking of PO.s against each Asset Code
Utilisation of Material in the Project
Material/Service Cost booked to the Project Asset
END
PURCHASE CYCLE & COST BOOKING TO PROJECT- (TO-BE)
Start Creation of WBS wise Asset Code (Hierarchical Template)
Requisition for Asset Code to President(Projects)
Approval granted by President(Projects)
Creation of Budget commitment against each Asset Code NO
Requisiton for Budget enhancement or Transfer from other WBS sub-level
Create Purchase Requisition (User) Sent to Accounts for Asset Code creation YES
Check for Budget Commitment balance: Positive?
Budget Approval Process Flow
Grant of Approval Create Purchase Order (User or Purchaser)
ASSET CODE created
Budget commitment can be entered into PM Order against each Asset Code
Release and dispatch of PO to the Vendor
Manufacture of equipment by Vendor
ASSET CODE entered in the PM order material issue by Purchaser
Delivery of Goods/equipment by the Vendor
PM Order (Asset order type-OR07) created
Goods Receipt (GR) done at Purchaser End
We can view the Cost against each Asset at this point Before this point, it can be viewed PO-wise
Issue of Material from Store to the User
Utilisation of Material in the Project
Material Cost booked to the Project Asset
END
BUDGET COMMITMENT- WBS WISE
PR/ RFQ STAGE
Deduction from Budget Commitment (PR AMOUNT)
PO STAGE
Actual Deduction from Budget Commitment (PO AMOUNT)
BALANCE= Committed - PO Amount
Actual Liquidation
ASSET ORDER Creation In Transit/Inventory= Total PO amount - Total Liquidation Booking of Cost in the Asset
Total Liquidated Amount= Sum of actual Asset Orders
START
Requisition raised by the concerned Executor for Budget enhancement
Level 1 Approval only Amount below Rs. Level 2 Approval required Amount above Rs.
Approval by the Departmental Head (Level 1 Approval)
Approval by President (Projects) (Level 2 Approval)
Incorporation of Additional budget in the Asset Code
END
Purchase Requisition CYCLE- AS IS
START
Purchase Requisition raised by the concerned Executor for material/service
Level 1 Approval only Amount : Below Rs. 2.5 lacs
Approval by the Section Head (Level 1 Approval)
Level 2 Approval only Amount : Rs. 2.5- 15 lacs
Approval by the HOD (user) (Level 2 Approval)
Level 3 Approval only Amount : > Rs. 15 lacs
Approval by the Project Head (Level 3 Approval)
Purchase Requisition APPROVED for PO
END
Purchase Requisition CYCLE- TO BE
START
Purchase Requisition raised by the concerned Executor for material/service
Release level for com amount checking/ Info
Level 1 Approval only Amount : Below Rs. 2.5 lacs
Approval by the Section Head (Level 1 Approval)
Balance in Commitment?
Level 2 Approval only Amount : Rs. 2.5- 15 lacs
Approval by the HOD (user) (Level 2 Approval)
Budget Enhancem Budget Transfer from WBS
Level 3 Approval only Amount : > Rs. 15 lacs
Approval by the Project Head (Level 3 Approval)
Purchase Requisition APPROVED for PO
END
Release level for commitment amount checking/ Information
Balance in Commitment?
Budget Enhancement or Budget Transfer from different WBS
Purchase Order CYCLE- AS IS
START
RFQ for the Material/Service
Receipt of Offers
TR and Commercial Recommendations
Negotiations with Vendors
Purchase Order Creation by Commercial
Level 1 Approval only Amount : Below Rs. 2.5 lacs
Approval by the Immediate Head (Level 1 Approval)
Level 2 Approval only Amount : Rs. 2.5- 15 lacs
Approval by the Functional Head (Level 2 Approval)
Level 3 Approval only Amount : > Rs. 15 lacs
Approval by the Project Head (Level 3 Approval)
Purchase Order APPROVED for release to Vendor
END
Purchase Order CYCLE- TO BE
START
RFQ for the Material/Service
Receipt of Offers
TR and Commercial Recommendations
Negotiations with Vendors
Purchase Order Creation by Commercial
Release level for com amount checking/ Info
Level 1 Approval only Amount : Below Rs. 2.5 lacs
Approval by the Immediate Head (Level 1 Approval)
Balance in Commitment?
Level 2 Approval only Amount : Rs. 2.5- 15 lacs
Approval by the Functional Head (Level 2 Approval)
Budget Enhancem Budget Transfer from WBS
Level 3 Approval only Amount : > Rs. 15 lacs
Approval by the Project Head (Level 3 Approval)
Purchase Order APPROVED for release to Vendor
END
Release level for commitment amount checking/ Information
Balance in Commitment?
Budget Enhancement or Budget Transfer from different WBS
Total PO Value
Delivered PO Value
Asset ExpenseAsset Order
Payment Made
Commitment BALANCE Committed Budget Total PO Value
In-transit VALUE Total PO Value Delivered PO Value
Inventory VALUE Delivered PO Value - Asset Expense-Asset Order
Payment in Pipeline VALUE Delivered PO Value Payment Made
PURCHASE CYCLE & COST BOOKING TO PROJECT- (TO-BE)
Start Creation of Asset in Asset Management
Creation of Asset Code against each Budget item
Creation of Budget commitment against each Asset
Inclusion of BOM and Service contract with activities
NO Create Purchase Requisition (User)
Check for Budget Commitment balance: Positive?
Requisiton for Budget enhancement or Transfer from other WBS sub-level
Budget Approval Process Flow
YES Grant of Approval Create Purchase Order (User or Purchaser) BALANCE Commitment based on PO Value
Reservation for Goods Issuefor Bulk Purchased materials
Release and dispatch of PO to the Vendor
Reservation for Goods Issue/ Service Entry- according to BOM/Service Contract
Manufacture of equipment by Vendor
Delivery of Goods/equipment by the Vendor
INVENTORY
Goods Receipt (GR) done at Purchaser End
Issue of Material from Store/ Service Entry sheet acceptance
Invoice receipt (MIRO) done for material POs.
Processing of Payment in Accounts
Utilisation of Material in the Project
Material/Service Cost booked to the Project Asset
END
PURCHASE CYCLE & COST BOOKING TO PROJECT- (TO-BE)
Start Creation of WBS structure in PS Module
Creation of Network with activities
Creation of Budget commitment against each WBS Element
Inclusion of BOM and Service contract with activities
NO Create Purchase Requisition (User)
Check for Budget Commitment balance: Positive?
Requisiton for Budget enhancement or Transfer from other WBS sub-level
Budget Approval Process Flow
YES Grant of Approval Create Purchase Order (User or Purchaser) BALANCE Commitment based on PO Value
Reservation for Goods Issuefor Bulk Purchased materials
Release and dispatch of Purchase Order(PO) to the Vendor
Reservation for Goods Issue/ Service Entry- according to BOM/Service Contract
Manufacture of equipment by Vendor
Delivery of Goods/equipment by the Vendor
Goods Receipt (GR) done at Purchaser End
Issue of Material from Store/ Service Entry sheet acceptance
Utilisation of Material in the Project
Material/Service Cost booked to the Project Asset
END
Start
Purchase Requisition raised by the User
Requisition for Asset Code to President(Projects)
NO
Check for Asset Code?
Approval granted by President(Projects)
YES
Create Purchase Order (User or Purchaser)
Sent to Accounts for Asset Code creation
Release and dispatch of PO to the Vendor
Work done by Vendor and RA Bills submitted
ASSET CODE created
Manufacture of equipment by Vendor Service Entry made in the PO- PM Order is entered against the Service Entry
PM Order (Asset order type-OR07) created
Delivery of Goods/equipment by the Vendor
Goods Receipt (GR) done at Purchaser End
ASSET CODE entered in the PM order material issue by Purchaser Issue of Material from Store to the User through PM Order
We can view the Cost against each Asset at this point Before this point, it can be viewed PO-wise There is no tracking of PO.s against each Asset Code
Utilisation of Material in the Project
Material/Service Cost booked to the Project Asset
END
PURCHASE CYCLE & COST BOOKING TO PROJECT- (TO-BE)
Start Creation of WBS wise Asset Code (Hierarchical Template)
Requisition for Asset Code to President(Projects)
Approval granted by President(Projects)
Creation of Budget commitment against each Asset Code NO
Requisiton for Budget enhancement or Transfer from other WBS sub-level
Create Purchase Requisition (User) Sent to Accounts for Asset Code creation YES
Check for Budget Commitment balance: Positive?
Budget Approval Process Flow
Grant of Approval Create Purchase Order (User or Purchaser)
ASSET CODE created
Budget commitment can be entered into PM Order against each Asset Code
Release and dispatch of PO to the Vendor
Manufacture of equipment by Vendor
ASSET CODE entered in the PM order material issue by Purchaser
Delivery of Goods/equipment by the Vendor
PM Order (Asset order type-OR07) created
Goods Receipt (GR) done at Purchaser End
We can view the Cost against each Asset at this point Before this point, it can be viewed PO-wise
Issue of Material from Store to the User
Utilisation of Material in the Project
Material Cost booked to the Project Asset
END
BUDGET COMMITMENT- WBS WISE
PR/ RFQ STAGE
Deduction from Budget Commitment (PR AMOUNT)
PO STAGE
Actual Deduction from Budget Commitment (PO AMOUNT)
BALANCE= Committed - PO Amount
Actual Liquidation
ASSET ORDER Creation In Transit/Inventory= Total PO amount - Total Liquidation Booking of Cost in the Asset
Total Liquidated Amount= Sum of actual Asset Orders
START
Requisition raised by the concerned Executor for Budget enhancement
Level 1 Approval only Amount below Rs. Level 2 Approval required Amount above Rs.
Approval by the Departmental Head (Level 1 Approval)
Approval by President (Projects) (Level 2 Approval)
Incorporation of Additional budget in the Asset Code
END
Purchase Requisition CYCLE- AS IS
START
Purchase Requisition raised by the concerned Executor for material/service
Level 1 Approval only Amount : Below Rs. 2.5 lacs
Approval by the Section Head (Level 1 Approval)
Level 2 Approval only Amount : Rs. 2.5- 15 lacs
Approval by the HOD (user) (Level 2 Approval)
Level 3 Approval only Amount : > Rs. 15 lacs
Approval by the Project Head (Level 3 Approval)
Purchase Requisition APPROVED for PO
END
Purchase Requisition CYCLE- TO BE
START
Purchase Requisition raised by the concerned Executor for material/service
Release level for com amount checking/ Info
Level 1 Approval only Amount : Below Rs. 2.5 lacs
Approval by the Section Head (Level 1 Approval)
Balance in Commitment?
Level 2 Approval only Amount : Rs. 2.5- 15 lacs
Approval by the HOD (user) (Level 2 Approval)
Budget Enhancem Budget Transfer from WBS
Level 3 Approval only Amount : > Rs. 15 lacs
Approval by the Project Head (Level 3 Approval)
Purchase Requisition APPROVED for PO
END
Release level for commitment amount checking/ Information
Balance in Commitment?
Budget Enhancement or Budget Transfer from different WBS
Purchase Order CYCLE- AS IS
START
RFQ for the Material/Service
Receipt of Offers
TR and Commercial Recommendations
Negotiations with Vendors
Purchase Order Creation by Commercial
Level 1 Approval only Amount : Below Rs. 2.5 lacs
Approval by the Immediate Head (Level 1 Approval)
Level 2 Approval only Amount : Rs. 2.5- 15 lacs
Approval by the Functional Head (Level 2 Approval)
Level 3 Approval only Amount : > Rs. 15 lacs
Approval by the Project Head (Level 3 Approval)
Purchase Order APPROVED for release to Vendor
END
Purchase Order CYCLE- TO BE
START
RFQ for the Material/Service
Receipt of Offers
TR and Commercial Recommendations
Negotiations with Vendors
Purchase Order Creation by Commercial
Release level for com amount checking/ Info
Level 1 Approval only Amount : Below Rs. 2.5 lacs
Approval by the Immediate Head (Level 1 Approval)
Balance in Commitment?
Level 2 Approval only Amount : Rs. 2.5- 15 lacs
Approval by the Functional Head (Level 2 Approval)
Budget Enhancem Budget Transfer from WBS
Level 3 Approval only Amount : > Rs. 15 lacs
Approval by the Project Head (Level 3 Approval)
Purchase Order APPROVED for release to Vendor
END
Release level for commitment amount checking/ Information
Balance in Commitment?
Budget Enhancement or Budget Transfer from different WBS
Total PO Value
Delivered PO Value
Asset ExpenseAsset Order
Payment Made
Commitment BALANCE Committed Budget Total PO Value
In-transit VALUE Total PO Value Delivered PO Value
Inventory VALUE Delivered PO Value - Asset Expense-Asset Order
Payment in Pipeline VALUE Delivered PO Value Payment Made
PURCHASE CYCLE & COST BOOKING TO PROJECT- (TO-BE)
Start Creation of Asset in Asset Management
Creation of Asset Code against each Budget item
Creation of Budget commitment against each Asset
Inclusion of BOM and Service contract with activities
NO Create Purchase Requisition (User)
Check for Budget Commitment balance: Positive?
Requisiton for Budget enhancement or Transfer from other WBS sub-level
Budget Approval Process Flow
YES Grant of Approval Create Purchase Order (User or Purchaser) BALANCE Commitment based on PO Value
Reservation for Goods Issuefor Bulk Purchased materials
Release and dispatch of PO to the Vendor
Reservation for Goods Issue/ Service Entry- according to BOM/Service Contract
Manufacture of equipment by Vendor
Delivery of Goods/equipment by the Vendor
INVENTORY
Goods Receipt (GR) done at Purchaser End
Issue of Material from Store/ Service Entry sheet acceptance
Invoice receipt (MIRO) done for material POs.
Processing of Payment in Accounts
Utilisation of Material in the Project
Material/Service Cost booked to the Project Asset
END
PURCHASE CYCLE & COST BOOKING TO PROJECT- (TO-BE)
Start Creation of WBS structure in PS Module
Creation of Network with activities
Creation of Budget commitment against each WBS Element
Inclusion of BOM and Service contract with activities
NO Create Purchase Requisition (User)
Check for Budget Commitment balance: Positive?
Requisiton for Budget enhancement or Transfer from other WBS sub-level
Budget Approval Process Flow
YES Grant of Approval Create Purchase Order (User or Purchaser) BALANCE Commitment based on PO Value
Reservation for Goods Issuefor Bulk Purchased materials
Release and dispatch of Purchase Order(PO) to the Vendor
Reservation for Goods Issue/ Service Entry- according to BOM/Service Contract
Manufacture of equipment by Vendor
Delivery of Goods/equipment by the Vendor
Goods Receipt (GR) done at Purchaser End
Issue of Material from Store/ Service Entry sheet acceptance
Utilisation of Material in the Project
Material/Service Cost booked to the Project Asset
END
