7: Purchases system

Question 1

Give first stage of a purchase system and the I/C procedures

Answer 1

1. A purchase order (PO) is raised - created on pre-numbered, sequential forms that are authorised by responsible official. Approved supplier list ensures purchases only from authorised suppliers.

Question 2

Give 2nd stage of a purchase system and the I/C procedures

Answer 2

2. Goods received by company
   - A pre-numbered/sequential GRN is raised when goods received and matched to original purchase order to check quantity and validity.
   - Inventory updated so goods available for sale

Question 3

Give 3rd stage of a purchase system and the I/C procedures

Answer 3

3. A purchase invoice is received from the supplier
   - Purchase invoice matched to GRN and PO to ensure invoice contains correct quantity and price - 3 way match

Question 4

Give last stage of a purchase system and the I/C procedures

Answer 4

4. The purchase invoice is paid - Payments are authorised by responsible official prior to payment.
   - Purchase ledger updated, invoices stamped ‘paid’
   - Due dates of invoices are monitored to avoid interest or missing early payment discount.