Purchase Orders (ensuring A Paper Trail Exists)

Accounts Payable

Purpose

To ensure an auditable paper trail exists for all purchases and to control purchases to ensure that we only pay for what we order.

Background

This procedure exists to control the way that our business spends money. All too often, businesses pay for products that either weren’t ordered or were not supplied according to specification. This procedure seeks to ensure that there is conformity between goods ordered and goods received.

Scope

All purchasing staff

Procedure

(Who) have purchasing authority up to (how much) – (allow a nominal amount, say $100-$200 without a Purchase Order – this might be through the petty cash or otherwise)

Petty cash is a limited purchasing facility for staff amenities such as coffee, milk and sugar and to reimburse minor expenses such as taxi fares and parking for authorised events. The total of any given item purchased through petty cash must not exceed (How Much). for all other expenses to be reimbursed to staff, an expense form must be submitted to (WHO).

Below is a table of purchasing authority levels within our business.

Staff member	Authority level
[]	[]
[]	[]

(The above is intended to enable a limited number of people to be able to authorise expenditure on a rising scale – eg Junior staff have no authority to expend money, supervisors may have authority to expend at petty cash level only, Managers have authority to a higher amount and so on up the line.)

To purchase any item over (how much) a purchase order must be raised and approved by the appropriate authority holder.

The process for raising a purchase order is detailed below:

(DESCRIBE THE PROCESS FOR RAISING PURCHASE ORDERS IN YOUR SYSTEM)

Purchase orders valued more than (how much) will require a detailed explanation in writing together with (how many – usually 3) quotations.

Purchase orders must include:

Purchase order number
product number
supplier ID
Details in the purchase order must be sufficiently complete to enable the product being purchased to be identified clearly from the purchase order itself.
Price quoted
Requirements as to standards and specification if different to details of the product. – ie different measurement to standard or colour or other attribute.
Special condition – certification, pre-delivery inspection, etc
Signature of Authorising Staff Member

Purchase orders must always be faxed to the supplier on the same day.

Purchase Orders (ensuring A Paper Trail Exists)