Example business: a small office ordering furniture. Sample amounts exclude tax and delivery charges; actual payment terms follow the agreed supplier contract.
1. What the process covers
Purchasing brings together the person who needs something, the person who approves spending, the supplier, receiving staff, and finance. In a small business one person may hold several roles, but the decisions should still be recorded.
A purchase request explains the need. A purchase order records what the business agrees to buy. A receipt confirms what arrived. The supplier bill requests payment. Treating these as separate records makes shortages and price differences easier to explain.
2. People and records to keep
On small screens, scroll the table sideways to see every column.
| Record | Who uses it | What to keep |
|---|---|---|
| Purchase request | Employee and manager | Item or service, quantity, reason, needed date, and cost estimate. |
| Supplier quotation and order | Buyer | Agreed price, quantities, delivery details, and payment terms. |
| Receipt or service acceptance | Receiving staff or requester | Accepted quantity or completed work, date, and issues. |
| Supplier bill and payment | Finance | Bill number, order reference, checked amounts, due date, and settlement. |
3. The everyday workflow
- Request the purchase. State the need clearly enough for a manager to decide.
- Compare and approve. Review suitable suppliers, total cost, delivery time, and the required approval.
- Send the agreed order. Keep a reference that the supplier can quote on delivery and billing.
- Accept what was delivered. Record shortages, damage, or incomplete service work.
- Check and settle the bill. Compare it with the agreement and acceptance record, resolve differences, and record payment.
4. A small business example
An office orders ten chairs at 50 each. The supplier delivers six and confirms that four will arrive later. The receiving record shows six accepted and four still outstanding.
For an agreement that pays accepted quantities, the six chairs represent 300 before tax and charges. A bill for all ten needs review against the contract. Advance payments or other agreed milestones need their own treatment; the receipt rule should not silently override those terms.
5. Checks and common problems
- Check for an existing order before buying the same requirement again.
- Keep supplier bill numbers and references so duplicate bills can be reviewed before payment.
- Record changes to quantity or price after approval and obtain any approval required by the business.
- A checked bill and a completed payment are different states. Retain the payment reference and investigate uncertain settlement.
6. Start with a simple system
Begin with an approved supplier list, a purchase request form, an order register, and a bill due list. A simple application can connect the records, route approvals, show pending receipts, and flag differences for review.
Pilot one buying category. Check overdue orders, unapproved spending, disputed bills, and time spent finding supporting documents. Agree a clear person for each exception so a flag does not become a forgotten problem.
7. Frequently asked questions
Is a purchase order the same as a supplier bill?
No. The order records the purchase agreement; the supplier bill requests payment. The receipt or service acceptance records what the business actually received.
What happens when only part of an order arrives?
Record the accepted quantity and the outstanding quantity. Follow up the balance and check billing against the agreed contract and payment terms.
Does a bill check automatically stop payment?
Only if the chosen system and approval process enforce that rule. Decide how differences are reviewed and who can release a payment.
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