The buying chain for a project
You will be able to: Name each document in the buy chain from request to paid invoice; Split a material request between store reservation and requisition; Tell where each document carries the project and the breakdown item.
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In Zeyto Construction & Contracting every purchase for a project follows one path. Each step is a register and a form in the Purchase menu, and every document carries the project and the item of work of the breakdown it is charged to. That tag is what puts the cost on the right line of the budget later.
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1. Material Requests start every purchase 2. RFQ and Cost Comparison: ask vendors and compare 3. Awards: give each line to a supplier 4. Price Variance shows where a rate moved 5. Delivery and Inspection: check what arrives 6. Goods Receipts take only the accepted quantity 7. Project Stores: issue material to the project 8. Mobile Devices: phones are approved here
- Material request: choose the project, the store and the items of work, then Save, Submit and Approve.
- Reserve: the store holds what it has. What is left becomes a requisition.
- Request for quotation and cost comparison: invite suppliers, enter the quotes, compare the landed rates.
- Award: award each line, and an approver approves the award. The purchase orders are created for you, one per supplier.
- Delivery and inspection: schedule the delivery, count it at the gate, inspect it.
- Goods receipt (GRN): the goods enter stock at the accepted quantity.
- Purchase invoice: invoice the delivery. The part nobody accepted waits until the supplier credits it.
The material request is listed under Purchase and under Inventory because it is both: the store sees it as demand, the buyer sees it as work to do. Open any document in the chain and the Related documents panel shows the whole chain, with links in both directions.
Why the chain matters to the accountant
- The budget compares against committed cost (open orders) as well as actual cost, so an order tagged to the wrong item shows the overrun on the wrong line.
- A purchase order made outside this path can be given a project afterwards, in the project fields under More details.
- A small buy on site can skip the chain: a local purchase is a purchase invoice raised in one step and tagged with project and item.
Walk it through
- Draw the seven steps for a purchase you know and mark who acts at each step.
- Compute the requisition quantity if the store holds 450 of 1,200 bags.
- In the demo, open Material Requests and see the buttons Reserve and New request for a chosen project.
Public demo company, sign in as admin / demoAdmin123. Data refreshes nightly.
- The chain is request, reserve, RFQ, award, delivery and inspection, goods receipt, invoice.
- Reserve first; only the shortfall is bought.
- Every document carries the project and the item of work.
Check yourself
4 questions on this lesson. Not timed, not the exam, and you can try again. Score 60% or more, and read the lesson, to complete it.