Purchase refers to a business where the Organization acquires goods and external services from the Vendors. Transaction of goods and money will take place between the Organization and the Vendors. To make this purchase workflow simpler, Odoo ERP provides a comprehensive approach to manage the suppliers and the Organization such that it will increase the potential of the Organization’s purchasing system.
The workflow goes from creating a Purchase Agreement, Requesting a Quotation, converting it to a Purchase Order and raising the same as a invoice.
In addition to the above, the Vendors and the Products can also be configured which will include the payment process and the attributes of the products.
The Purchase workflow in Odoo ERP takes place in the following steps:
- Purchase Agreement
- Request for Quotation (RFQ)
- Convert the RFQ to Purchase order
- Receive the goods
- Update Goods Receipt Note (GRN)
- Raise Invoice
- Register Payment
Purchase agreement is an agreement that is created between the vendor and the organization. This will contain the details such as:
Agreement type : like call for tender or blanker order
Vendor : the vendor will be associated with this agreement and can be added in the RFQ or purchase order
Agreement deadline : the deadline of the agreement
This agreement will also contain the products that are associated with this vendor. The quantities and the account is maintained universally for the agreement details. The agreement will work in stages such as:
- Bid Selection
Request for Quotation (RFQ)
Request for quotation is a formal request to the vendor to quote an amount for the desired products/goods. This quotation is sent to many vendors in order to obtain a best deal.
The details such as the following are present in the RFQ details:
- Vendor Name
- Purchase agreement : the purchase agreement will be filtered according to the vendor
- Ordered date
The product details have to mentioned such that the vendor can quote an amount. The product name and the desired quantity has to be mentioned in the quote.
When a request for quotation is raised, it is not necessary to mention the amount for the product. The vendor will quote and amount for the product.
The next step is to convert the RFQ into a Purchase order.
Convert the RFQ to Purchase order
Once the quotation is ready, the RFQ is printed and sent across to the vendors. When the RFQ is sent by E-mail, the stage moves RFQ to RFQ Sent.
Next,the unit amount quoted by the vendors is updated in the unit price. When the unit amount is updated, the Confirm order button can be clicked denoting that the RFQ is now converted to a Purchase order.
When the product is converted to a purchase order, a bill will be generated for the same. Also, a receipt will be created against that order which is the GRN.
Receive the goods
When the purchase order is created, the products can now be received by the Organization. When the products are received, the incoming products will be updated automatically.
Update GRN (Goods Receipt Note)
The GRN has to be updated when the goods are received altogether or as and when we obtain the goods.
When the goods are obtained fully, the quantity can be updated and validated directly.
But, when only partial quantity is received, the same should be updated accordingly.When only a partial quantity is obtained, the backorder details must be updated. Backorder details means if the vendor will send the remaining goods or not and the same must be updated.
If the goods will be received by the vendor as a Backorder, then Create Backorder is given and if otherwise, the No Backorder is selected. If a backorder is created, the purchase order will have two receipts which includes the Backorder entry. As and when the backorder goods are received, they can be validated accordingly.
Only when all the backorders are validated, the purchase order will move to the next step.
Once the goods are received by the Organization, the bill will be created for the same. Click the Create bill option and a bill/invoice will be generated for the same.
Here, the invoice can be updated again in case the vendor made a change in price or any taxes has to be added or any discount was given. Also, only the bill date which was given by the vendor must be updated in the invoice.
Once the update is done, the invoice can be validated. The next step is to register the payment.
Now, the payment has to be made. This can be done by updating the payment journal and the corresponding amount along with the payment date.
Once the data is entered, the payment can be validated.
The payment is done and the stage is moved to “Paid”.
When the payment is done. A vendor bill is also created for that record.
Once the payment is all made, if for any reason the product needs replacement or needs to be returned, then a credit note can be raised.
The credit note method can be carried out in the following ways:
- Create a draft credit note
- Cancel: create credit note and reconcile
- Modify: create credit note, reconcile and create a new draft invoice
The reason and the date of the credit note has to be mentioned.
When a credit note is entered, a refund entry will be created. As and when the products are replaced, the same entry can be edited and confirmed.
The vendors for a company can be maintained in the purchase module. The details of the vendors are note and then same will be shown when a vendor has to be selected for a purchase entry.
Two or more contact entry can also be created for a vendor.
The details of the meetings conducted,purchases that were made with the vendor and the respective vendor bills will also be shown here.
The details of the product can be noted in the Purchase module and the same will be displayed when products have to be selected for the purchase.
The product can be differentiated into:
- Can be Sold
- Can be Purchased
The vendors associated with the product can also be mentioned along with the attribute and the unit of measure for the products.
The HSN Code and the account for the product can also be entered in this module.