[SOLVED] Purchase order required setting?

Hello,

How exactly does this option affect the buying process?
I set this option to YES just to try and see what happened but didn’t find any difference.

I did this because I’m trying to understand this: If I directly go to a retail store and buy some raw materials what is the correct way to register them (assuming that a purchase order is not necessary here)?

Thanks,
Nuno

Our company just makes a PO after the fact anyways, just for the sake of consistency. To answer your question, I believe that it makes PO a required filled in purchase receipt, but I’ve not tested that.

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Hi @nununo,

Purchase Order Required:-
If this option is configured “Yes”, ERPNext will prevent you from creating a Purchase Invoice or a Purchase Receipt without first creating a Purchase Order.

Purchase Receipt Required:-
If this option is configured “Yes”, ERPNext will prevent you from creating a Purchase Invoice without first creating a Purchase Receipt.

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Thanks for the explanations.

But what’s the best (simplest) procedure? If I directly go to a retail store and buy some raw materials what is the correct way to register them (assuming that a purchase order is not necessary here)? Keeping in mind that my goal is to keep it as simple as possible.

What is the disadvantage of not creating a Purchase Order?
What is the disadvantage of not creaging a Purchase Receipt?

Thanks,
Nuno

How many people are involved in the purchase process?

In our case, one team interacts with suppliers and finalizes the prices… other team handles only the receipts and another person verifies the PO and PR etc… So it makes sense for us to use all three steps…

What is the disadvantage of not creaging a Purchase Receipt?

How will you account for the items with stock without the receipt?

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Hi,
-its okay ,if you are not making purchase order but if you want to transfer material to another warehouse.
then you should create “Purchase Receipt” for ‘Stock In’.
-When you create Purchase Receipt then only material comes inside stock.

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Your answers show how naive and inexperienced we still are :slight_smile:
But it’s exactly to fight this inexperience that I’m pushing to adopting an ERP early on even though this is still a very very small business.

To answer your question: everything is done by just one person: my wife. She’ll buy, build and sell. That’s why it’s very important for me to keep it as simple as possible, without a lot of steps so that the ERP doesn’t get in the way of her daily tasks which are already quite overwhelming. But I believe that if she doesn’t adopt a way of measuring what she’s doing, it will be bad in the long term.

Thanks,
Nuno

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Cool… Then you can just do Purchase receipt and Purchase Invoice… and ERPNext is simplest and most comprehensive ERP you can find!! Happy Learning :slight_smile:

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Great. Thanks.
So, the Purchase Receipt is the one that updates the stock and the Purchase Invoice is the one that updates the account, correct?

Correct.

The Purchase Order records the order of parts
The Purchase Receipt records the receipt of parts
The Purchase Invoice records payment for those parts.

Our company is required to have a set procedure for handling purchasing, to conform to ISO standards. It sounds like you don’t have to. Another thing to look is a Stock Entry for material receipt, though I’m not sure what that will do, other people may be able to elaborate on that.

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Thanks for making this clear to me.

What would happen if, instead of using a Purchase Receipt I’d simply create a Stock Entry of type Material Receipt?

Thanks,
Nuno

You won’t be able to enter a value for that stock item. When you bought that item, you (or your better half) obviously paid money for it. You can do a Material Receipt for it, but then ultimately you will need to account for the money you paid for the item. Doing a Purchase Receipt is a good way of doing that.

Check if it is a Category A, B or C item. If C, you just account for all category C items once a month or something.

Don’t sweat the small stuff. An ERP System only captures the ground level controls. If you are making a transaction just because you are on an ERP System, but wouldn’t worry about it in real life, you shouldn’t worry about it on an ERP system either.

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Hello @JayRam,

Thank you for explaining that. It’s clear now.

And thank you for that great advice. I’ll keep that in mind. Indeed an ERP should help you improve your processes but it shouldn’t make them unnecessarily complicated :slight_smile: