Purchasing Module

Procurement, vendor management, and purchase order processing in iDempiere

The Purchasing module in iDempiere provides complete procurement capabilities, from requisition through purchase order, receipt, and vendor payment.

Overview

iDempiere’s purchasing system streamlines the procurement process with automated workflows, approval hierarchies, and tight integration with inventory and accounting. The module supports complex purchasing scenarios including drop shipments, contract pricing, and multi-currency transactions.

Purchase Requisitions

Internal requests for materials and services

Purchase Orders

Vendor orders with approval workflows

Receipts & Returns

Receive goods and handle vendor returns

Vendor Invoices

Match and process vendor bills

Purchase Requisitions

Initiate the purchasing process with internal requests for materials or services.

Requisition Process

Requisitions allow departments to request purchases without direct vendor interaction:

1. Create Requisition

   Navigate to Requisition > Requisition and click New

2. Add Line Items

   Enter products or services needed with quantities and required dates

3. Specify Requirements

   Add descriptions, preferred vendors, and any special requirements

4. Submit for Approval

   Complete the requisition to route through approval workflow

5. Purchasing Review

   Procurement team reviews approved requisitions and creates purchase orders

Requisition Types

• Material Requisition - Request for inventory items
• Service Requisition - Request for services or labor
• Expense Requisition - Request for expense items or supplies
• Asset Requisition - Request for capital equipment

Approval Workflows

Implement multi-level approval based on amount or type:

• Amount Thresholds - Different approval levels by dollar amount
• Department Authorization - Manager approval for department requests
• Budget Checking - Verify budget availability before approval
• Special Approvals - Additional approvals for specific product categories

Use requisitions to centralize purchasing decisions, enforce approval policies, and maintain audit trails for all procurement activities.

Purchase Orders

Create and manage vendor purchase orders.

Creating Purchase Orders

1. Navigate to Purchase Order

   Go to Material Management > Purchase Order and click New

2. Select Vendor

   Choose the vendor, which auto-populates payment terms, price list, and other defaults

3. Enter Order Details

   Set order date, promised date, and delivery location (warehouse)

4. Add Products

   Manually add line items or use Create From to reference requisitions or RFQs

5. Set Pricing

   Confirm unit prices, which are automatically pulled from vendor price lists

6. Complete Order

   Complete the document to commit the order and send to vendor

Order Types

iDempiere supports various purchase order scenarios:

• Standard PO - Regular inventory replenishment
• Drop Shipment - Vendor ships directly to customer
• Warehouse Order - Transfer between warehouses
• Service Order - Purchase of services or labor
• On Credit Order - Return of goods to vendor

Order Features

• Multiple Lines - Order multiple products on single PO
• Partial Receipts - Receive and invoice in multiple shipments
• Promised vs. Ordered - Track vendor promised dates vs. requested dates
• Order Confirmation - Record vendor acknowledgment and changes
• Change Orders - Modify orders with proper authorization

Completing a purchase order changes its status to “Completed” and prevents modification. Use the “Void” action to cancel unwanted orders.

Vendor Pricing

Manage vendor-specific pricing and contracts.

Price Lists

Maintain current vendor pricing:

• Vendor Price Lists - Standard pricing from each vendor
• Contract Pricing - Negotiated prices for specific periods
• Volume Discounts - Quantity break pricing
• Promotional Pricing - Temporary special prices
• Multi-Currency - Prices in vendor’s currency

Price Management

1. Access Price List

   Navigate to Price List and select or create a vendor price list

2. Import Prices

   Use the import process to load vendor price files

3. Set Validity Dates

   Specify effective and expiration dates for pricing

4. Configure Discounts

   Apply discount schemas for volume or other discounts

5. Review and Activate

   Validate prices and activate the price list version

Vendor Selection

Choose optimal vendors based on:

• Price Comparison - Compare prices across vendors
• Vendor Rating - Quality, delivery, and service scores
• Lead Time - Time from order to delivery
• Minimum Order - Minimum quantities or amounts
• Preferred Vendor - Strategic supplier relationships

Request for Quotation (RFQ)

Solicit competitive bids from multiple vendors.

RFQ Process

1. Create RFQ

   Navigate to RFQ and create a new request with line items

2. Select Vendors

   Choose vendors to receive the RFQ

3. Publish RFQ

   Send RFQ to vendors via email or portal

4. Collect Responses

   Vendors submit quotes with pricing and terms

5. Evaluate Responses

   Compare vendor quotes on price, delivery, and terms

6. Award Business

   Select winning vendor(s) and create purchase orders

RFQ Features

• Multi-Vendor Comparison - Side-by-side quote analysis
• Line-Level Awards - Award different lines to different vendors
• Quote Validity - Track quote expiration dates
• Technical Specifications - Attach requirements and specifications
• Vendor Portal - Allow vendors to submit quotes online

Use RFQs for high-value purchases or when vendor pricing is unknown. Document the evaluation criteria and selection decision for audit purposes.

Material Receipts

Receive goods from vendors into inventory.

Receipt Process

1. Create Receipt

   Navigate to Material Management > Material Receipt

2. Select Purchase Order

   Use Create From > Order to select the purchase order

3. Confirm Quantities

   Verify received quantities match the purchase order (adjust if necessary)

4. Quality Inspection

   Perform quality checks and record any defects or rejections

5. Assign Serial/Lot Numbers

   For tracked products, assign serial numbers or lot batches

6. Complete Receipt

   Completing updates inventory and makes items available for use

Receipt Scenarios

• Full Receipt - All ordered items received in one shipment
• Partial Receipt - Receive portion of order with remainder to follow
• Over Receipt - Receive more than ordered (requires tolerance settings)
• Drop Ship Receipt - Record receipt when vendor ships to customer

Receipt Matching

iDempiere tracks the matching status:

• Not Matched - Received but not invoiced
• Partially Matched - Some quantity invoiced
• Fully Matched - All quantities invoiced
• Match Variance - Price or quantity differences between receipt and invoice

Do not complete receipts until goods are physically inspected and accepted. Completing the receipt updates inventory and cost accounting.

Vendor Returns

Process returns of defective or unwanted goods.

Return Process

1. Create Vendor RMA

   Create a vendor return authorization documenting the return reason

2. Create Return Shipment

   Navigate to Material Receipt and create a new document

3. Set Document Type

   Select “Purchase Order” document type with “Return” sub-type

4. Reference Original Receipt

   Use Create From to reference the original material receipt

5. Enter Return Quantities

   Specify quantities being returned

6. Complete Return

   Completing reduces inventory and creates accounting reversals

Return Scenarios

• Defective Goods - Quality issues or damage
• Wrong Items - Vendor shipped incorrect products
• Overshipped - Excess quantities
• Restocking - Returning surplus inventory

Vendor Invoices

Process and match vendor bills to receipts and purchase orders.

Invoice Entry

1. Navigate to Invoice

   Go to Purchasing > Invoice (Vendor)

2. Create from Receipt

   Use Create From > Receipt to invoice received goods

3. Verify Amounts

   Confirm invoice matches purchase order prices and receipt quantities

4. Handle Variances

   Investigate and resolve price or quantity discrepancies

5. Complete Invoice

   Completing posts payable and makes invoice available for payment

Three-Way Match

iDempiere supports three-way matching:

• Purchase Order - Authorized pricing and terms
• Receipt - Confirmed receipt of goods
• Invoice - Vendor billing

The system validates that all three documents agree on quantities and prices before allowing invoice completion.

Invoice Types

• AP Invoice - Standard vendor bill
• AP Credit Memo - Credit from vendor for returns or adjustments
• Expense Invoice - Services or expenses without receipts
• Debit Memo - Charge to vendor for freight, restocking, etc.

The Match Invoice process creates connections between receipts and invoices, enabling variance analysis and proper cost accounting.

Payment Processing

Manage vendor payments efficiently.

Payment Methods

• Check - Print physical checks
• ACH/EFT - Electronic funds transfer
• Wire Transfer - Bank wire for large or international payments
• Credit Card - Corporate card payments
• Manual - Cash or other payment types

Payment Selection

Batch process multiple vendor payments:

1. Create Payment Selection

   Navigate to Payment > Payment Selection

2. Set Parameters

   Choose bank account, payment date, and invoice selection criteria

3. Generate Payments

   System selects invoices based on due date and discount terms

4. Review Selections

   Manually add or remove invoices as needed

5. Process Payments

   Generate payment records and check prints or export files

Payment Features

• Discount Capture - Automatically apply early payment discounts
• Partial Payments - Pay portion of invoice
• Payment Allocation - Distribute payment across multiple invoices
• Void Payments - Cancel and reverse incorrect payments
• Positive Pay - Export for bank fraud prevention

Run Payment Selection daily or weekly to capture all available payment discounts while managing cash flow effectively.

Vendor Management

Maintain vendor relationships and performance.

Vendor Information

Track comprehensive vendor data:

• Contact Information - Phone, email, website
• Banking Details - ACH/wire information for electronic payments
• Payment Terms - Standard terms and discount schedules
• Credit Limits - Maximum exposure per vendor
• Tax Information - Tax IDs and 1099 reporting

Vendor Performance

Monitor vendor quality and service:

• On-Time Delivery - Percentage of orders delivered as promised
• Quality Rating - Rejection and return rates
• Price Performance - Price stability and competitiveness
• Service Level - Responsiveness and issue resolution
• Spend Analysis - Total purchases by vendor and category

Vendor Reporting

Vendor Statement

Outstanding payables and payment history

Purchase Analysis

Spending by vendor, category, or time period

Receipt History

Detailed receiving log by vendor

Quality Report

Rejection rates and quality issues

Contract Management

Manage purchasing agreements and contracts.

Contract Types

• Price Agreements - Fixed pricing for contract period
• Volume Commitments - Minimum purchase requirements
• Blanket Orders - Standing orders with call-offs
• Framework Agreements - Master terms with individual releases

Contract Features

• Contract Validity - Start and end dates
• Committed Amounts - Minimum or maximum purchase values
• Release Management - Issue releases against contract
• Compliance Tracking - Monitor contract utilization
• Renewal Management - Track contract expirations

Purchasing Analytics

Gain insights into procurement performance.

Key Metrics

• Purchase Order Cycle Time - Requisition to PO completion
• Receipt Accuracy - Match between PO and actual receipts
• Invoice Accuracy - Three-way match exceptions
• Payment Terms Compliance - Discount capture rate
• Vendor Lead Time - Average time from order to delivery
• Spend by Category - Procurement spending analysis

Reporting Capabilities

• Open Purchase Orders - Outstanding commitments
• Receipts Due - Expected deliveries by date
• Unmatched Receipts - Received but not invoiced
• Unmatched Invoices - Invoiced but not received
• Payment Forecast - Projected cash requirements
• Vendor Comparison - Price and performance benchmarking

Best Practices

Process Control

• Require requisitions for all purchases to maintain control
• Implement approval hierarchies based on dollar thresholds
• Enforce three-way matching for all inventory purchases
• Use RFQs for purchases above defined amounts
• Maintain clear separation between purchasing and receiving

Vendor Management

• Consolidate vendors to increase leverage and simplify management
• Maintain updated vendor contact and banking information
• Rate vendor performance regularly and address issues promptly
• Negotiate payment terms to optimize cash flow
• Build relationships with strategic vendors

Cost Control

• Monitor contract compliance and committed spend
• Capture all available early payment discounts
• Review and update price lists regularly
• Analyze spend by category to identify savings opportunities
• Use RFQs to ensure competitive pricing

System Configuration

• Configure default warehouses and vendors by product
• Set up proper approval workflows before going live
• Define over/under receipt tolerance percentages
• Enable price variance notifications for review
• Configure automatic PO numbering and sequences

Related Modules

Inventory

Receive purchased goods into stock

Accounting

Process vendor invoices and payments

CRM

Manage vendor relationships and contacts

Manufacturing

Purchase materials for production