Leaders Born or Made

Only available on StudyMode
  • Download(s) : 14
  • Published : May 13, 2013
Open Document
Text Preview
ASSIGNMENT
OF
FINANCIAL MANAGEMENT

Topic: Computerised Purchase System
Submitted by: Pranav Gupta
Roll No. 1400712
MBA-HRM

Definition of 'Purchasing System'

A method used by businesses to buy products and/or services. A purchasing system manages the entire acquisition process, from requisition, to purchase order, to product receipt, to payment. Purchasing systems are a key component of effective inventory management in that they monitor existing stock and help companies determine what to buy, how much to buy and when to buy it. A popular purchasing system is based on economic order quantity models.

Efficiently tracking inventory is an imperative component to a small business’ successful operation. By having up-to-date data regarding all needed office supplies, raw manufacturing materials and merchandise for sale, an organization will drastically increase its bottom line. In addition to the money saved by not reordering unnecessary goods, an enterprise will be better positioned to services customers quickly, as well as navigate any unexpected changes in business, such as a supplier abruptly going out of business. Although many companies maintain this information manually, there are benefits to using a computerized inventory system.

Time Savings
As the old saying goes, “time is money.” The amount of time that can be saved by a business is, perhaps, the biggest benefit of using a computerized inventory system. A great example of this benefit is the retail industry. In cases where a shop maintains all data manually, its manager must reconcile each sales receipt with every piece of physical inventory. Depending on the size of the establishment and how many different products are sold, this can be a daunting and time consuming task. If that same store, however, used a computerized point of sale, POS, system, the master inventory list would be updated electronically each time a sale is made. The only thing a manager would have to do each day is print out the report highlighting the inventory to be restocked.

Accuracy
An additional benefit of using a computerized inventory system is the accuracy it ensures. Eighteenth century English poet Alexander Pope is often quoted as having said, “To err is human.” When an inventory list is maintained by hand, the margin of error widens with each update. If one mathematical calculation is wrong or one typo is made, disaster may occur. For instance, if a clerk accidentally adds a zero to the end of a purchase order, a business could potentially end up paying for 10,000 units of merchandise as opposed to the 1,000 that is actually needed. Consistency

A small business operates most efficiently when its processes are executed in a consistent manner. By using a computerized inventory system, a business owner can ensures that all orders, reports and other documents relating to inventory are uniform in their presentation, regardless of who has created them. This will allow ease of reading. In addition, uniformity creates a professional appearance, which can go a long way to impress associates, such as potential investors

Purchase System
PR, backorder, purchase enquiry, purchase order and purchase return BusinessAhead provides you a complete purchase system which integrates the entire purchase process starting from a Purchase Requisition or a Backorder, going through the process of Purchase Enquiry, receiving and evaluating Purchase Quotes, and creating & releasing Purchase Order. It also handles the receipt of goods through Inspection Note and Goods Receipt Note, and processes vendor payments, deposits and advances. A brief overview of the facilities provided in each stage of the purchase process is given below:

Purchase Requisition
A department may initiate a request for purchase by directly raising a Purchase Requisition. A Purchase Enquiry/Order is released by the purchase department on...
tracking img