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Is the purchase order important for the purchasing cycle? Could we use an email instead?

Purchasing Cycle / Purchase Order

Is the Purchase order is important for the Purchasing cycle ? Could we use an email instead ?!!

 

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Question ajoutée par Tamer Elbeshbishy , Financial and Administration Manager , Muscat Towers Holding Group
Date de publication: 2016/04/14
Santosh Kumar Arukh
par Santosh Kumar Arukh , AGM- FINANCE & TAXATION , JFE ENGIEERING CORPORATION

Purchasing Cycle / Purchase Order

Is the Purchase order is important for the Purchasing cycle ? Could we use an email instead ?!!

Purchase Order is an offer and  acceptance documents with agreeing to supply/ buy in the future  as per previous rate & Services  offer.  

 

This is a legal document which described the following details:

1) Date of discussion/ offer, items, rate, amount & all taxes.

2) Scope of work/ Item/ product/ service  description

2) Credit period

3) Terms & Condition of payment

4) Delivery period & Place of delivery

5) Condition about quality etc.

Such document is issued for a specific cycle / period to supply the materials.

 

 

The Purchase order is not accepted in email as the original signature & company seal is required by both party to valid this documents.

Ghada Eweda
par Ghada Eweda , Medical sales hospital representative , Pfizer pharmaceutical Plc.

Yes, the purchase order is important part of purchase cycle, it is one of the eight steps of the purchasing cycle which involves:

Step #1. Receiving and analysing purchasing requisition:

Step # 2. Selecting suppliers:

Step # 3. Requesting quotations:

Step # 4. Determining the right price:

Step # 5. Issuing a purchasing order:

Step # 6. Following-up and delivery:

Step # 7. Receiving and accepting goods:

Step # 8. Approving supplier’s invoice for payment:

Also, an email could be included too . 

Once the purchase order has been received the purchasing officer needs to make a sequentially pre-numbered multiparty set in purchase order  and include information needed to be on the purchase order such as:

    • supplier's name

    • suppliers email

    • supplier's account code

    • order number

    • date

    • On each stock line the following information is required:

      • Stock code

      • Stock description

      • Stock unit of measure

      • Stock quantity ordered

      • estimated delivery date

      • bulk discount rate

      • unit cost

    • signature of the purchasing officer

 

Ahmed Mohamed Ayesh Sarkhi
par Ahmed Mohamed Ayesh Sarkhi , Shared Services Supervisor , Saudi Musheera Co. Ltd.

agree with answer add by ms. ghada

 

HASSAN AHMED
par HASSAN AHMED , Internal Auditor , TIE

MS. Ghada has already explained very well.

Purchase order is an important part of purchasing cycle, without this cycle is incomplete. We cannot use email as a purchase order. Purchase order has different format than email and must be having following information:

Date:

LPO No.

Supplier Name, Address, Account Code, quotation number, item code, goods description, UOM, rate per unit, amount, payment terms, delivery time, other conditions if perishable item, discount if available.

Buy name, address, requisition number, amount in figures and words, Authorize signatory sign.

You can send purchase order through email but email cannot be accepted as a purchasing order.

ghazi Almahadeen
par ghazi Almahadeen , Project Facilitator , Jordan River Foundation

Thanks for the invite ............. Leave an answer for specialists

Abdul Khalique
par Abdul Khalique , Finance Manager , Value Real Estate & Construction

A purchase order is one of the eighth important parts of purchase cycle. It is a buyer-generated document that authorises a purchase transaction. When accepted by the seller, it becomes a contract binding on both parties.

A purchase order sets forth the descriptions, quantities, prices, discounts, payment terms, date of performance or shipment i.e. delivery time and place, other associated terms and conditions as required specifically, and identifies a specific seller.

Many organizations unwisely waive purchase orders and use email instead of it because they perceive the paperwork to be a bother that it slows things down, or simply because they have a good working relationship with vendors. When businesses start small they tend to have an organic purchasing process. Over the time, however, that process changes as companies develop relationships with their sellers. Once a company grows and the purchasing demands become more specific, urgent, and/or complex, communication challenges can arise if a purchase order isn’t used or certain details are not correct on the order.

If a buyer receives their order and it does not comply with the desired specifications, if there is no purchase order to use as a reference, it can be a nightmare for both parties to determine where the request went wrong. At that point it’s likely that both payment and an invoice was sent, which puts both parties in a significantly more complicated legal situation.

 

A purchase order provides legal clarity and concrete instructions for the seller, as well as a concrete paper trail that can be used as a point of reference for when things go wrong. So, instead of email the purchaser should strictly opt purchase order only.

Mohammad Iqbal Abubaker
par Mohammad Iqbal Abubaker , Jahaca Pty Ltd - Accounts Administrator , Jahaca Pty Ltd - Accounts Administrator

Answer added by: Ghada Eweda  Medical sales hospital representative is the correct Answer.

Frank Mwansa
par Frank Mwansa , ACCOUNTING LECTURER , FREELANCER

Thanks for invitation

I agree with the explanations given.

Dasarathi Rath
par Dasarathi Rath , Sr. Accountant , Al Luban Special Investment LLC

Yes, we can send an email is important instead of the purchase order in purchasing cycle.

Utilisateur supprimé
par Utilisateur supprimé

Yes, the purchase order is an important part of the buying cycle , and please , ladies and gentlemen sufficient clarification , we thank them .

SULTAN-E- ROOM
par SULTAN-E- ROOM , Head Accountant , DALLA DRIVING ACADEMY

purchase order is important part of purchasing cycle and was already answered will by all the expert. i think you have confusion about the email, purchase order can also be send via email . in this scenario email will be your purchase order 

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