¶ Purchase Module
¶ Overview
The Purchase module in Sherkety ERP manages your entire procurement process from requesting quotes to receiving goods and paying vendors. Streamline vendor relationships, automate reordering, and maintain complete control over your purchasing operations.
Business Value:
- Reduce procurement costs by 15-20% through better vendor negotiations
- Eliminate manual purchase orders with automated reordering
- Ensure timely deliveries with systematic vendor management
- Improve cash flow with purchase agreement terms
- Achieve 3-way matching (PO → Receipt → Invoice) for payment accuracy
- Track spending by vendor, category, and department
¶ Getting Started
¶ Prerequisites
Before using the Purchase module effectively, ensure you have:
- ✅ Created vendor records in Contacts module
- ✅ Set up products with vendor prices configured
- ✅ Configured inventory locations (if receiving physical products)
- ✅ Set up chart of accounts for purchase accounts
- ✅ Defined payment terms for vendors
- ✅ Configured approval workflows (if required)
¶ Initial Configuration
¶ 1. Configure Purchase Settings
Navigate to Purchase → Configuration → Settings
Essential Settings:
¶ Orders Section
- ✅ Purchase Agreements - Blanket orders with vendors
- ✅ Purchase Order Warnings - Alert when ordering from specific vendors
- ✅ Lock Confirmed Orders - Prevent changes after confirmation
¶ Invoicing Section
- ✅ Bill Control - Control invoice creation (ordered vs received quantities)
- ✅ 3-Way Matching - Match PO, receipt, and invoice before payment
¶ Products Section
- ✅ Product Variants - Purchase products with different attributes
- ✅ Units of Measure - Buy in different units (pallets, cases, pieces)
¶ Analytics Section
- ✅ Purchase Warnings - Track vendor reliability issues
¶ 2. Set Up Vendor Information
Path: Purchase → Configuration → Vendor Pricelists
Configure vendor-specific pricing for products.
For Each Product:
- Open product
- Purchase tab
- Add vendor information:
- Vendor: Select vendor
- Vendor Product Code: Vendor's SKU
- Price: Cost per unit
- Delivery Lead Time: Days from PO to receipt
- Min Quantity: Minimum order quantity
Benefits:
- Automatic vendor selection based on price
- Quick RFQ creation
- Accurate lead time forecasting
- Multi-vendor comparison
¶ 3. Configure Payment Terms
Path: Accounting → Configuration → Payment Terms
Define standard payment arrangements with vendors:
Common Terms:
- Immediate: Pay upon receipt
- Net 30: Payment due 30 days after invoice
- Net 60: Payment due 60 days after invoice
- 2/10 Net 30: 2% discount if paid within 10 days, otherwise net 30
Setup:
- Click Create
- Enter term name (e.g., "Net 30")
- Define installments:
- Due date: Balance (30 days from invoice date)
- Set on vendor record as default
¶ Daily Operations
¶ Workflow 1: Create Request for Quotation (RFQ)
Business Scenario: Need to order 100 office chairs. Want to get quotes from multiple vendors before committing.
¶ Step 1: Create RFQ
- Navigate to Purchase → Orders → Requests for Quotation
- Click Create
¶ Step 2: Add Vendor and Products
- Vendor: Select vendor (e.g., "Office Furniture Co")
- Order Deadline: When you need quote by
- Products Tab:
- Click Add a product
- Select product (Office Chair)
- Set quantity (100)
- Unit price auto-fills from vendor pricelist
- Subtotal calculates automatically
Multiple Vendors:
- Create separate RFQ for each vendor
- Same products, quantities
- Compare responses
¶ Step 3: Send RFQ to Vendor
- Click Send by Email
- Email template opens with:
- Professional RFQ document
- Product specifications
- Quantities requested
- Delivery requirements
- Customize message if needed
- Click Send
Result: Vendor receives formal request for quotation.
Status: RFQ remains in "Draft" or "RFQ Sent" status until confirmed.
¶ Workflow 2: Convert RFQ to Purchase Order
Business Scenario: Vendor responds with acceptable pricing and delivery date. Ready to commit to purchase.
¶ Step 1: Review Vendor Response
-
Vendor replies by email or phone with:
- Confirmed pricing
- Delivery timeline
- Any special terms
-
Update RFQ if needed:
- Adjust unit prices
- Confirm delivery date
- Add terms and conditions
¶ Step 2: Confirm Purchase Order
- Review all details
- Click Confirm Order
- Status changes to "Purchase Order"
- PO number assigned (e.g., PO00042)
What Happens Next:
If products are storable:
- Receipt order created automatically in Inventory module
- Smart button appears: "Receipt: 1"
- Warehouse team notified
If products are services:
- No receipt needed
- Ready for vendor bill upon completion
Vendor Notification:
- System can send PO confirmation to vendor
- Formal commitment to purchase
- Legally binding order
¶ View Purchase Orders
List View:
Shows all POs with:
- PO reference
- Vendor
- Total amount
- Status (Draft, RFQ Sent, Purchase Order, Done)
- Receipt status
- Invoice status
Form View:
Kanban View:
Organize POs by status for visual pipeline management.
¶ Workflow 3: Receive Products from Purchase Order
Business Scenario: Vendor ships 100 office chairs. Shipment arrives at warehouse.
¶ Step 1: Access Receipt from Purchase Order
- Open purchase order
- Click Receipt smart button
- Receipt order opens (auto-created when PO confirmed)
Or navigate to:
- Inventory → Operations → Receipts
- Find receipt linked to PO
¶ Step 2: Validate Receipt
Full Receipt:
- Verify products received match PO
- Check quantity and quality
- Click Validate on receipt
- Status: Done
Partial Receipt:
- Received only 75 chairs (25 backordered)
- Change Done quantity to 75
- Click Validate
- System creates backorder for remaining 25
Result:
- Stock levels increase
- Purchase order updates: "Received" status
- Ready for vendor bill processing
- Accounting entries created (if inventory valuation enabled)
See: Inventory Module - Receive Products
¶ Workflow 4: Create Vendor Bill (3-Way Matching)
Business Scenario: Vendor sends invoice for 100 office chairs @ $150 each = $15,000. Need to verify against PO and receipt before paying.
¶ Step 1: Create Vendor Bill from Purchase Order
- Open purchase order
- Click Create Bill
- Vendor bill opens with:
- Vendor pre-filled
- Products and quantities from PO
- Unit prices from PO
- Total amount calculated
Or Create Bill Manually:
- Accounting → Vendors → Bills
- Click Create
- Link to purchase order
¶ Step 2: Verify 3-Way Match
Match Elements:
1. Purchase Order (PO):
- What you ordered: 100 chairs @ $150 = $15,000
2. Receipt:
- What you received: 100 chairs (verified by warehouse)
3. Vendor Invoice:
- What vendor is billing: 100 chairs @ $150 = $15,000
If All Match: ✅ Proceed to confirm bill
If Discrepancy:
- Price difference: Negotiate with vendor or adjust
- Quantity difference: Only bill for received quantity
- Never received: Don't create bill until receipt validated
¶ Step 3: Confirm Vendor Bill
- Review invoice details
- Set Invoice Date (vendor's invoice date)
- Set Due Date (based on payment terms)
- Attach vendor's PDF invoice (optional but recommended)
- Click Confirm
Result:
- Journal Entry Created:
- Debit: Expense Account (e.g., Inventory or COGS) $15,000
- Credit: Accounts Payable $15,000
- Purchase order status: "Billed"
- Vendor balance increased
- Due date tracked for payment
Bill Control Policies:
Ordered Quantities:
- Bill immediately after PO confirmation
- Before receipt
- Use for: Services, immediate invoicing
Received Quantities:
- Bill only after warehouse validates receipt
- Use for: Physical products (most common)
- Ensures you only pay for what you received
¶ Workflow 5: Pay Vendor Bill
Business Scenario: Vendor bill due date approaching. Time to pay.
¶ Step 1: Access Bills Due for Payment
Method A: From Bill
- Navigate to Accounting → Vendors → Bills
- Filter: Due Date approaching
- Open bill
Method B: From Vendor
- Purchase → Orders → Vendors
- Open vendor record
- View Bills in smart buttons
¶ Step 2: Register Payment
- Open vendor bill
- Click Register Payment
- Payment dialog opens:
- Payment Date: When payment made
- Payment Method: Bank, Check, Cash, Wire Transfer
- Amount: Full bill amount (or partial)
- Memo: Check number or reference
- Click Create Payment
Result:
- Journal Entry:
- Debit: Accounts Payable $15,000
- Credit: Bank Account $15,000
- Bill status: "Paid"
- Vendor balance decreased
- Bank balance decreased
Partial Payments:
- Pay portion of bill
- Remaining balance tracked
- Schedule follow-up payment
Batch Payments:
- Select multiple bills
- Click Action → Register Payment
- Pay multiple vendors at once
See: Accounting Module - Vendor Payments
¶ Workflow 6: Manage Vendors
Business Scenario: Track vendor performance, reliability, and payment history.
¶ View Vendor Performance
- Navigate to Purchase → Orders → Vendors
- Select vendor
- Smart buttons show:
- Purchase Orders: Total POs
- Bills: Outstanding and paid
- Receipts: Delivery history
Vendor Scorecard Metrics:
- On-time delivery rate
- Product quality (returns/defects)
- Price competitiveness
- Payment terms offered
- Response time to RFQs
¶ Vendor Categories and Tags
Categorize Vendors:
- Gold: Reliable, best pricing
- Silver: Good performance
- Bronze: Acceptable
- Blacklist: Do not use
Vendor Tags:
- "Office Supplies"
- "IT Equipment"
- "Raw Materials"
- "Preferred Vendor"
Use Cases:
- Filter by category when creating RFQ
- Report spending by vendor category
- Identify preferred vendors quickly
¶ Advanced Features
¶ Purchase Agreements (Blanket Orders)
Business Scenario: Negotiate annual agreement with vendor - purchase up to $100,000 of office supplies over 12 months at discounted rates.
¶ Create Purchase Agreement
- Navigate to Purchase → Orders → Purchase Agreements
- Click Create
- Configure:
- Vendor: Office Supplies Inc
- Agreement Type: Blanket Order
- Ordering Date: Start date
- Delivery Date: End date (12 months from now)
- Products: Add all agreed products with negotiated prices
- Agreement Value: $100,000 (maximum)
¶ Use Agreement for Purchase Orders
Method A: From Agreement
- Open agreement
- Click New Quotation
- Select products from agreement
- Pricing auto-fills from agreement terms
Method B: Link Existing PO
- Create purchase order
- Select vendor
- Agreement field: Link to agreement
- Agreement prices apply
Benefits:
- Locked-in pricing for contract period
- Volume discounts honored
- Simplified ordering process
- Track spending against agreement limit
¶ Automated Reordering from Stock
Business Scenario: When office chair stock falls below 20 units, automatically create RFQ to reorder.
¶ Configure Reordering Rule
- Open product (Office Chair)
- Inventory tab
- Click Reordering Rules
- Click Create
- Configure:
- Min Quantity: 20 (trigger threshold)
- Max Quantity: 100 (order up to this level)
- Quantity Multiple: 10 (order in multiples)
- Route: Buy
- Vendor: Preferred vendor
¶ Automatic RFQ Generation
Scheduler runs (daily):
- Checks inventory levels
- Stock falls to 18 (below min of 20)
- System creates RFQ for 82 units (to reach max of 100)
- RFQ assigned to preferred vendor
- Procurement team notified
Manual Trigger:
- Inventory → Operations → Run Scheduler
- Forces immediate check
Result: Never run out of stock, fully automated procurement.
See: Inventory Module - Reordering Rules
¶ Dropshipping
Business Scenario: Customer orders product you don't stock. Purchase from vendor who ships directly to customer.
¶ Enable Dropshipping
- Product configuration:
- Inventory tab
- Routes: Enable "Dropship"
¶ Dropship Process
Customer Flow:
- Customer creates sales order
- System auto-creates purchase order to vendor
- Vendor ships directly to customer's address
- No stock movement in your warehouse
Accounting:
- Customer invoice: Revenue recorded
- Vendor bill: Cost recorded
- Margin = Revenue - Cost
Benefits:
- No inventory carrying costs
- Faster delivery in some cases
- Offer wider product range
Challenges:
- Less quality control
- Dependent on vendor's stock and shipping
See: Sales Module - Dropshipping
¶ Purchase Analysis and Reporting
Business Scenario: Management asks: "What did we spend on IT equipment last quarter?"
¶ Purchase Analysis Report
Path: Purchase → Reporting → Purchase
Graph View:
- Spending trends over time
- Comparison by vendor
- Product category breakdown
Pivot View:
Multi-dimensional Analysis:
- Rows: Vendor, Product Category
- Columns: Month, Quarter
- Measures: Total Spent, Quantity, Number of Orders
Filters:
- Date range
- Vendor
- Product category
- Status (confirmed orders only)
Export to Excel:
- Click Download → Excel
- Further analysis in spreadsheet
¶ Vendor Bill Matching Policies
Business Scenario: Different products have different billing requirements.
¶ Configure Bill Control
Product Level:
- Open product
- Purchase tab
- Control Policy:
Options:
Ordered Quantities:
- Create bill based on PO quantities
- Before receipt
- Use for: Services, software licenses, anything where "delivery" is immediate or conceptual
Received Quantities:
- Create bill only for received quantities
- After warehouse validation
- Use for: Physical products (recommended)
Example:
Scenario:
- Ordered: 100 units
- Received: 75 units (25 backordered)
Ordered Quantities Policy:
- Can bill for 100 units immediately
Received Quantities Policy:
- Can only bill for 75 units
- Bill for remaining 25 when received
3-Way Matching Enforced: Prevent payment for goods not received.
¶ Integration Scenarios
¶ Purchase ↔ Inventory Integration
Workflow: Purchase order creates receipt order
How It Works:
- Create and confirm purchase order
- Receipt order created automatically in Inventory
- Smart button: "Receipt: 1"
- Warehouse team:
- Receives shipment
- Validates receipt
- Stock levels increase
- Purchase order updated: "Received"
- Ready for vendor bill
Configuration:
- Products must be "Storable Product"
- Inventory module installed
- Warehouse configured
See: Inventory Module - Receipts
¶ Purchase ↔ Accounting Integration
Workflow: Automated journal entries for vendor bills and payments
How It Works:
On Vendor Bill Confirmation:
- Journal Entry:
- Debit: Expense Account (or Inventory Asset)
- Credit: Accounts Payable
- Effect: Liability created
On Payment:
- Journal Entry:
- Debit: Accounts Payable
- Credit: Bank Account
- Effect: Liability cleared, cash decreased
Configuration:
- Purchase Settings: Integrated with Accounting
- Products: Expense account configured
- Chart of Accounts: Accounts Payable account set
See: Accounting Module - Vendor Bills
¶ Purchase ↔ Sales Integration (Dropshipping)
Workflow: Sales order triggers purchase order for dropship
How It Works:
- Customer sales order created
- Product has "Dropship" route enabled
- Purchase order created automatically to vendor
- Vendor ships directly to customer
- Both orders marked "Done"
- No warehouse handling
Use Cases:
- Made-to-order products
- Special order items not normally stocked
- Products too large/heavy to stock
See: Sales Module - Dropship Integration
¶ Reporting & Analysis
¶ Standard Reports
¶ Purchase Analysis Report
Path: Purchase → Reporting → Purchase
Metrics:
- Total spending by period
- Average order value
- Number of purchase orders
- Top vendors by volume
- Top products by spending
Use Cases:
- Budget variance analysis
- Vendor consolidation opportunities
- Spending forecasting
- Cost reduction initiatives
¶ Vendor Performance Report
Custom Report Creation:
- Purchase → Reporting → Purchase
- Filter: Status = Purchase Order
- Group By: Vendor
- Measures: Total, Count, Average Delivery Lead Time
- Save as Favorite: "Vendor Performance"
Analyze:
- Which vendors deliver on time?
- Which vendors offer best pricing?
- Which vendors have quality issues (returns)?
- Consolidation opportunities?
¶ Custom Reporting
¶ Cost Savings Analysis
Scenario: Compare spending this year vs last year by category.
- Purchase → Reporting → Purchase
- Pivot View
- Rows: Product Category
- Columns: Year
- Measures: Total Spent
- Calculate variance: This Year - Last Year
- Export to Excel for detailed analysis
¶ Best Practices
¶ ✅ Vendor Management
Maintain Vendor Scorecards
- Track on-time delivery rate (target: >95%)
- Monitor product quality (returns <2%)
- Review pricing competitiveness quarterly
- Benefit: Data-driven vendor decisions
Diversify Suppliers
- Minimum 2 vendors per critical product
- Avoid single-source dependencies
- Negotiate better terms with competition
- Benefit: Risk mitigation, better pricing
Build Relationships
- Regular communication with key vendors
- Provide feedback on performance
- Pay on time (build trust for better terms)
- Benefit: Preferential treatment, better service
¶ ✅ Purchase Order Management
Standardize Payment Terms
- Negotiate 30-60 day terms (improve cash flow)
- Take early payment discounts when available (2/10 Net 30)
- Set vendor-level defaults (consistency)
- Benefit: Optimized cash flow
Batch Purchase Orders
- Consolidate orders to same vendor weekly/monthly
- Reduce shipping costs (larger orders)
- Simplify receiving process
- Benefit: 10-20% cost savings on shipping
Review Before Confirming
- Double-check quantities, prices, delivery dates
- Verify agreement terms applied
- Confirm budget availability
- Benefit: Avoid costly mistakes
¶ ✅ 3-Way Matching Discipline
Always Match PO → Receipt → Invoice
- Never pay invoice without validated receipt
- Investigate discrepancies immediately
- Document resolution (price adjustment, return, etc.)
- Benefit: Eliminate overpayments, detect fraud
Automate Where Possible
- Use bill control policies (received quantities)
- System prevents billing for undelivered goods
- Exceptions flagged for review
- Benefit: Reduced errors, faster processing
Audit Trail
- Attach vendor invoice PDF to bill
- Document approval chain
- Retain communication with vendors
- Benefit: Audit compliance, dispute resolution
¶ ✅ Cost Optimization
Negotiate Volume Discounts
- Purchase agreements for regular items
- Commit to annual volume for better pricing
- Review and renegotiate annually
- Benefit: 5-15% cost reduction
Consolidate Vendors
- Fewer vendors = higher volume per vendor
- Better negotiating position
- Simplified vendor management
- Benefit: Better pricing, reduced admin overhead
Monitor Market Prices
- Compare vendor pricing to market rates
- Request quotes from multiple vendors quarterly
- Switch vendors if pricing uncompetitive
- Benefit: Ensure competitive pricing
¶ Troubleshooting
¶ Issue: Cannot Create Bill from Purchase Order
Symptoms: "Create Bill" button disabled or grayed out
Possible Causes:
-
Purchase order not confirmed
- Status still "RFQ" or "Draft"
- Solution: Click "Confirm Order"
-
Already fully billed
- Check "Billing Status" field shows "Fully Billed"
- Solution: This is expected - order complete
-
Products configured "Received Quantities" but nothing received yet
- Solution: Validate receipt first, then create bill
¶ Issue: Receipt Not Created After PO Confirmation
Symptoms: No receipt order generated when PO confirmed
Possible Causes:
-
Products are services or consumables
- Only storable products create receipts
- Solution: Verify product type is "Storable Product"
-
Inventory module not installed
- Solution: Install Inventory module
-
Product route not configured
- Solution: Product → Inventory tab → Routes → Enable "Buy"
¶ Issue: Vendor Bill Amount Doesn't Match PO
Symptoms: Creating bill from PO, but amount differs
Possible Causes:
-
Vendor changed pricing after PO sent
- Solution: Negotiate with vendor or adjust bill manually
-
Bill control policy = "Received Quantities" but partial receipt
- Received 75 units, ordered 100
- Bill only for 75 units
- Solution: Expected behavior - bill for received quantity only
-
Taxes configured differently
- PO shows tax-excluded, bill shows tax-included
- Solution: Check tax settings on product/vendor
¶ Issue: Cannot Find Purchase Agreement When Creating PO
Symptoms: Agreement not appearing in dropdown
Possible Causes:
-
Agreement expired
- Delivery date passed
- Solution: Extend agreement dates or create new one
-
Wrong vendor selected
- Agreement specific to vendor
- Solution: Change vendor on PO to match agreement
-
Agreement not confirmed
- Status still "Draft"
- Solution: Open agreement and confirm it
¶ Frequently Asked Questions
Q: Can I modify a confirmed purchase order?
A: Generally no, confirmed POs are locked. Options:
- Before receipt/bill: Cancel and create new PO
- After receipt: Cannot modify received quantities
- After bill: Cannot modify - credit note required
Exception: If "Lock Confirmed Orders" disabled in settings, can unlock with manager permission.
Q: How do I handle partial receipts and partial billing?
A:
- Receive partial quantity (e.g., 50 of 100 ordered)
- Validate receipt with backorder
- Create bill: Only 50 units billable (if policy = "Received Quantities")
- When backorder arrives: Receive remaining 50
- Create second bill: For remaining 50 units
Result: Two bills for one PO, each matching actual receipts.
Q: Can I return defective products to vendor?
A: Yes, but process varies:
Option A: Before bill created
- Create reverse receipt in Inventory
- Adjust quantities on PO if needed
- Bill only for good quantity
Option B: After bill paid
- Contact vendor for return authorization
- Create reverse receipt
- Vendor issues credit note
- Register as refund
Q: What's the difference between RFQ and Purchase Order?
A:
- RFQ (Request for Quotation): Inquiry to vendor, not binding, used to get pricing
- Purchase Order: Confirmed commitment to buy, legally binding, triggers receipt
Workflow: RFQ → Compare vendors → Select best → Confirm → Becomes PO
Q: How do I handle vendor discounts and rebates?
A:
Discount on PO:
- Adjust unit price directly
- Or add discount line item (negative amount)
Volume Rebate (paid later):
- Create vendor credit note when rebate received
- Apply to future bills
- Or request refund
Early Payment Discount:
- Configure in payment terms (e.g., "2/10 Net 30")
- System calculates discount if paid early
Q: Can I have different delivery addresses for purchase orders?
A: Yes:
- Create or edit PO
- Other Info tab
- Delivery Address: Select warehouse or custom address
- Vendor ships to specified location
Use Cases:
- Multiple warehouses
- Direct delivery to customer (dropship)
- Third-party logistics
¶ Related Modules
- Inventory - Receive products from purchase orders
- Accounting - Vendor bills, payments, accounts payable
- Sales - Dropshipping integration
- Manufacturing - Purchase raw materials for production
¶ Keyboard Shortcuts
Alt + C- Create new recordAlt + E- Edit current recordAlt + S- SaveEsc- Discard changes/- Global searchCtrl + K- Command palette
¶ Video Tutorials
(Coming soon)
- Purchase Module Quick Start (5 min)
- Creating RFQs and Purchase Orders (8 min)
- 3-Way Matching Best Practices (10 min)
- Vendor Management and Performance Tracking (7 min)
- Purchase Agreements and Contracts (6 min)
¶ Glossary
RFQ (Request for Quotation) - Inquiry sent to vendor requesting pricing and terms. Not a commitment to buy.
Purchase Order (PO) - Confirmed order to vendor. Legally binding commitment to purchase.
Purchase Agreement - Long-term contract with vendor defining pricing, terms, and maximum spend over period.
3-Way Matching - Verification process comparing Purchase Order, Receipt, and Vendor Invoice before payment.
Bill Control Policy - Rule determining when vendor bill can be created: Ordered Quantities (before receipt) or Received Quantities (after receipt).
Blanket Order - Purchase agreement covering multiple deliveries over time with set pricing.
Dropshipping - Fulfillment method where vendor ships product directly to customer without stock passing through your warehouse.
Backorder - Partial receipt - remaining quantity to be delivered later.
Lead Time - Days from PO creation to expected receipt.
Vendor Pricelist - Vendor-specific pricing for products including cost, MOQ, delivery time.
Payment Terms - Agreement on when payment is due (e.g., Net 30, 2/10 Net 30).
Accounts Payable - Money owed to vendors for goods/services received but not yet paid.
Receipt - Document confirming products received from vendor into warehouse.