Chapter 5
Purchasing and Payments
What Is the Purchasing Process Flow?
As the company bookkeeper, you will spend a great deal of time processing the purchases made by various people within the company, and paying the supplier bills that inevitably follow the purchases. Clearly, you need to be familiar with this process, which comes in three varieties. Here is how each of the three types of purchases work:
1. Supplies Purchases
- Someone in the company wants to buy supplies, so he or she fills out a purchase requisition form (readily available at the local office supply store), which states what he or she wants to buy, the quantity, and when it is needed.
- The person requesting the supplies forwards the purchase requisition to the purchasing department, where a purchasing agent finds the supplies at the best possible terms and places a purchase order with the supplier. The purchasing agent keeps a copy of the purchase order, and sends copies to the bookkeeper and the receiving department.
- The supplier ships the supplies to the company. The receiving department accepts the supplies if it has an authorizing purchase order on hand. The receiving staff then sends the supplies to whomever requested them, and forwards its receiving report to the purchasing agent and the bookkeeper.
- The purchasing agent matches the receiving report to the purchase order, and files the documents away as a completed task.
- The supplier sends an invoice to the bookkeeper, who compares it to the purchase order ...
