Manual Purchasing and AP Processing

This section describes the basic steps that are performed when you manually process  purchase order and accounts payable transactions in the StreamV System.

This document will use the term supplier to identify the company providing the goods, and the term buyer for the company purchasing the goods.  In some cases, the supplier and buyer companies may be related (i.e. individual sales sites purchasing from a holding company or a manufacturing company that is owned by the same group), and in some cases the companies may be totally unrelated to each other.  This example will assume that inventory for resale is being purchased from the supplier.

1.  A purchase order is placed and is sent to the supplier.   The PO is entered into the system and transmitted to the supplier company (the vendor) via mail, edi, xml, or using another transport mechanism.  Purchase order information includes, item numbers, the quantity of each item being ordered, the currency of PO, the per unit price for each item in the PO currency, the estimated ship date, and estimated delivery dates for each item, and the terms and shipping information for the purchase order.

2.  The supplier inputs the purchase order into their system. The supplier enters the buyer purchase order into their system manually or using an automated process.  The supplier may be running StreamV or another software package.

3.  The supplier updates or confirms the Purchase Order information.  Once the supplier (vendor) has entered the information from your PO into their system, the supplier may provide updated pricing, and delivery schedule information based on the availability of each item in their system.   The supplier may also provide updated item information (item descriptions, product lines, etc.) This information can be transmitted to buyer via mail (printed confirmation), edi, xml, or using another method.

4.  The Buyer (your company) updates the purchase order and item information based on information from the supplier.   If the vendor or supplier provides you with updated pricing or estimated shipment dates for the items on the PO, this updated information is entered into the system and used to update the existing purchase order information.  The PO Entry program can be used to edit any incorrect item prices on the purchase order prior to receiving, and the PO Management program can be used to update the Estimated Ship and Estimated Arrival dates for each item.  Any discrepancies between the original po and the supplier data should be identified and resolved at this point if possible by editing the PO or having the Buyer correct the information on their system.

5.  The supplier ships the items and provides shipment information to the buyer  The information the supplier may provide at this point includes the items and quantities being shipped against each PO line, the shipping method used for the PO and other information (ie tracking numbers, serial number information).

6.   The buyer (your company) updates the appropriate purchase orders with the shipment information from the supplier.  The shipment information updated in buyer system normally includes the actual shipment date for each po line and the estimated delivery date for each po line (based on actual shipping date and transit time for the shipping method being used for the PO).

7.   The Goods are physically received by your company

8.   The goods are received into inventory in buyer system.  As the items received from the supplier are processed in the system, the system closes the purchase order lines that have been completely received, it updates the inventory on hand and on order quantities for each item in the buyer system and it updates the general ledger inventory and inventory liability accounts for the total amount of the goods received.  Inventory Transaction records are created for the receipt and these records are used for two purposes.  The records are used to reconcile the receiving detail for the vendor to the vendor invoice amounts, and the records that have not been matched to a specific invoice are used to determine the value in the Inventory Liability or Unvouchered Sub ledger.

9.   An Accounts payable invoice is produced by the supplier and transmitted to you.  The supplier invoice may be for one or more than one buyer purchase order and it may be transmitted via mail, or electronically via edi,or xml.

10.      The acocunts payable invoice for the received items is entered into the system.  This step is performed during accounts payable invoice entry.  The operator inputs the invoice information (vendor, invoice number, invoice amounts, invoice date, terms, etc) and  identifies the specific inventory receiving or vendor shipment transactions that the invoice is associated with.   If there is any difference between the vendor invoice amount and the inventory transaction detail for the invoice, this difference must be reconciled and posted before the invoice can be saved (this variance can be due to freight charges, or other non-inventory charges on the invoice, or it can be due to a price or quantity variance (a difference between the invoice amount billed by the supplier and the amount of inventory received into your system for the invoice).  Please see the section on Three Way Matching for more information about handling PO variances during AP processing.

11. The supplier invoice is paid.  Once the supplier invoice has been entered into the system, it remains in the Accounts Payable system until the invoice is paid.  Once the invoice is completely paid the cycle is completed.

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Automated Purchasing and AP Processing