Procurement Cycle Overview

Procurement Cycle Overview

There are a total of 7 stages for a basic grasp of the procurement cycle's flow of process:

1.Material Request

2.Request For Quotation

3.Supplier Quotation

4.Purchase Order

5.Purchase Receipt

6.Purchase Invoice

7.Payment Entry

Let's imagine you raise a Material request in ERPNext based on the item to be purchased to start, keeping in mind the typical flow of the purchase cycle.

When a material request is made, there may be a number of situations, such as numerous suppliers offering to sell the same item, in which case an RFQ is launched.

Suppliers post their rates against the requested quantity once an RFQ has been issued. The users of ERPNext or even the Web portal can send the rates from the various Suppliers. Also, after receiving quotes, they can be contrasted using Supplier Quotation. An order is placed against the best quote after comparison. Depending on the organizational process flow, an invoice or purchase receipt may be generated after a PO is raised. A payment entry is then made.