In small businesses, purchasing usually starts with a phone call. The warehouse worker says "we are out of this", the boss calls, and the goods arrive.
This method works up to a certain scale. Afterwards, problems begin: who ordered what, at what price was it purchased, when will the goods arrive?
In this article, we explained the purchasing process from request to delivery, the approval workflow, and tracking discipline.
Table of Contents
1. Request: Where does the need originate?
The purchasing need arises from three sources, and each has a different trigger.
Stock level.Products falling to critical levels automatically generate needs; check out the critical stock level article.
Production plan.Raw material requirements derived from the bill of materials trigger purchasing; we discussed this in the raw material requirement article.
Department request.The need for office supplies, equipment, or services comes from the departments.
Recording the request is critical. Verbal requests are open to subsequent "I never asked for that" debates.
2. Approval: who decides?
Sending every request for approval slows down the process. Sending none eliminates budget control.
Balance is established with amount thresholds. Routine and low-amount purchases turn directly into orders; those above a certain amount fall to approval.
We detailed the threshold structure and role definitions in the purchasing approval workflow article.
Requests awaiting approval must also be visible. A request the approver is unaware of silently halts the process; notifications carry this signal.
3. Supplier and price
For routine purchases, the supplier is known and the price is agreed upon. In this case, no additional step is needed.
For high-value or new items, quotes are collected. We covered the process in the RFQ and supplier price comparison articles.
Delivery time is just as important as price in the decision. If the cheapest offer delivers the latest, production may stop.
Keeping supplier cards up to date speeds up the work; if there is product code matching, order entry becomes easier. See the Supplier cards and multiple codes article.
4. Order: recording the commitment
A purchase order is the official request given to the supplier. It includes product, quantity, price, and delivery date information.
Having the order in the system provides two benefits. First, matching can be done when the goods arrive. Second, open orders enter stock planning.
The delivery date must be entered. When this field is left blank, tracking delays becomes impossible.
Orders are entered using the same screen logic as other documents; standard document entry ensures that a user who knows sales orders also knows purchase orders.
5. Tracking and goods receipt
The job does not end when the order is placed. As the deadline approaches, confirmation must be obtained and delayed orders must be followed up.
When goods arrive, a receipt record is created. Receiving by counting catches future discrepancies today; you can check the manufacturer's dispatch note article.
When the invoice arrives, it is compared with the order and dispatch note. We explained this three-way control in the three-way matching article.
In partial deliveries, the remaining quantity stays open and is tracked. The process runs end-to-end in the purchasing module.
Measuring the process
The purchasing process should be measured once established. Three indicators provide a sufficient overview.
Time elapsed from request to order. If it is long, the approval workflow is likely bottlenecked.
Deadline compliance rate. This is the clearest indicator of supplier performance; see the supplier evaluation article.
Ratio of invoices without orders. If it is high, it means the process has remained on paper.
These indicators are extracted from purchasing reports; purchasing reports we discussed in the article.
Separating roles
The health of the purchasing process depends on the separation of roles. Having the same person request, order, accept the goods, and approve the invoice leaves no control.
In small teams, complete segregation may not be possible; however, at least two critical separations must be maintained. First, the person placing the order and the person receiving the goods must be different.
Second, the person processing the invoice and the person executing the payment must be different. These two separations largely block the most common fraud scenarios.
The separation should be tied to the role, not the person; the structure should not break down when staff changes.Role-based authorization we discussed this approach in the article.
Maintaining an audit trail is also a complementary element; the question of who did what and when must remain on record.
Typical pitfalls in the process
Skipping the purchase order record. Orders placed by phone and not entered into the system disable all subsequent controls.
Failing to enter the delivery date. When this field is left blank, the concept of delay disappears; no order becomes "late".
Entering the price afterwards. When an order is opened without a price, there is no reference to compare when the invoice arrives.
Closing partial deliveries. Completely closing an order that arrived incomplete makes tracking the remaining quantity impossible; open order tracking check out the article.
Being dependent on a single supplier. Price competition is lost in routine purchases; periodically obtaining alternative quotes keeps the price updated.
Frequently asked questions
Isn't this process too heavy for a small business?
Steps can be simplified. Request and approval can be merged into a single step; order logging generates value at any scale.
Do service procurements go through the same process?
Yes; service items are defined separately. See the article on service and expense definitions.
Can orders be placed from mobile devices?
Purchasing transactions are also supported on mobile; clarify the scope during setup.
Do urgent purchases disrupt the process?
A retroactive approval path should be defined for urgent purchases. The important thing is to monitor the rate of this exception; if it is rising, it means there is a problem on the planning side.
How is it transferred to my existing accounting software?
Transfer is planned via system sync.
The purchasing process is where costs are controlled. Recording requests and orders is the first step to the biggest savings.
Start with the smallest step when setting up the process: an order record for every purchase. The approval workflow, quotation collection, and performance measurement are built on top of that.
None of the other steps will work without an order record; if there is no reference document, neither matching can be done nor supplier performance can be measured.
Your initial goal should be to bring the invoice-without-order rate close to zero. Once this single indicator improves, the foundation of cost control is established, and the remaining steps will fall into place much more easily.
You can set up your purchasing workflow by talking to the EQLEM team.