ERP- Purchase module -SCM


Companies which purchase material from different vendors in large and varying quantities require a good ERP purchase module. A ERP Purchase module streamlines the functioning of procurement and purchase of raw materials, awarding orders to suppliers and billing.

The purchase module has an option to record all the details pertaining to a vendor and these details are the master data for vendors who supply goods to the company. The purchase department is entrusted with the task of purchasing materials required for manufacturing products in the organization.

The purchase department is responsible for purchasing materials in the right quantities of the right quality at the right time.


The vendors are also referred to as suppliers and managing these suppliers is possible with this module and so this module is also referred to as SCM module. Various factors such as stiff competition, changing technology, short product life cycles, demand that a company does not order material in excess.

The SCM module is designed to meet all these challenges. Suppliers and the company can work in a tandem using the SCM module. The suppliers can optimize their resources while the company can optimize its resources while allowing the suppliers also to do the same.

A supply chain consists of the raw material which is supply to the manufacturer, who in turn supplies these goods to the wholesaler who distributes these goods to the retailers. The SCM module is designed to handle the entire chain of suppliers.

The purchase department initiates the purchase process by raising the purchase order. Purchase orders are created when there is shortage of materials for production of finished products. The vendor supplies goods based on the purchase order. All purchase orders are treated as pending purchase orders till the time material is received from the vendors.

On receipt of goods, a receipt note is raised. When the receipt note is raised, stock accounts are updated. After the receipt note is created, purchase invoice is created which is a reference for the finance department to make a payment.

The stock updations are reflected in the stock ledger and the stock registers. General ledger account updations are reflected in the balance sheet, P / L statement and general ledger.

A good ERP Purchasing module allows tracking of each purchase order right from the stage when it is created and receipt of materials in part or full, relating these orders to purchase invoices, and unfulfilled requirements if any.

The Purchase or SCM module is integrated with the Material management and manufacturing modules of the ERP software.