Purchase Request Workflow

# Purchase Request Workflow

## Purpose
Implement to control spending, maintain accurate records, and eliminate rogue purchasing across departments.

## When to Use
A streamlined purchase request and approval workflow with budget checks, multi-level sign-off, and automatic PO generation.

## Instructions
1. Review the template below and familiarise yourself with the structure
2. Replace all [bracketed placeholders] with your business details
3. Customise the tone and formatting to match your brand
4. Save in your preferred tool (Xero or Zapier)

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## Purchase Request Workflow

### Trigger
Team member identifies a need to purchase goods or services not covered by existing standing orders.

### Steps

**Step 1: Submit Purchase Request** (Owner: Requesting Team Member) - Before contacting any supplier
Complete the purchase request form with: item/service description, quantity, estimated unit cost, total cost (incl. GST), preferred supplier (if known), business justification, required delivery date, and budget category.
- Tool: Online form (Notion or Google Forms)
- Output: Purchase request submitted with full details

**Step 2: Verify Budget Allocation** (Owner: Finance Officer) - Within 4 hours
Check the relevant department budget in Xero to confirm funds are available. Cross-reference against year-to-date spending in the category. Note budget availability status on the request.
- Tool: Xero
- Output: Budget availability confirmed or flagged

> Decision Point: If budget is not available, notify the requester and their Department Manager. The Manager can request a budget reallocation or decline the purchase. If budget is available, proceed to approval.

**Step 3: Department Manager Approval** (Owner: Department Manager) - Within 1 business day
Review the request for necessity, value for money, and alignment with department priorities. Approve, request modifications, or decline via Slack notification.
- Tool: Slack
- Output: Manager approval or feedback

**Step 4: Finance Approval** (Owner: Finance Manager) - Within 1 business day (for requests over $1,000)
Review GL coding, GST treatment, and supplier terms. Ensure the purchase complies with company procurement policies. Approve or request changes.
- Tool: Slack + Xero
- Output: Finance approval granted

**Step 5: Obtain Quotes** (Owner: Requesting Team Member or Procurement) - Within 3 business days
For purchases over $2,000, obtain a minimum of 3 comparable quotes. Document the quotes and recommendation in the purchase request record. For purchases under $2,000, a single quote from the preferred supplier is acceptable.
- Tool: Email + Notion
- Output: Quotes obtained and documented

**Step 6: Generate Purchase Order** (Owner: Finance Officer) - Within 1 business day of final approval
Create a purchase order in Xero referencing the approved request number. Include itemised line items, agreed pricing, delivery details, and payment terms. Send the PO to the supplier.
- Tool: Xero
- Output: Purchase order issued to supplier

**Step 7: Receive Goods or Services** (Owner: Requesting Team Member) - Upon delivery
Inspect the delivery against the purchase order. Check quantities, quality, and specifications. Report any discrepancies immediately to the supplier and Finance. Sign the delivery docket.
- Tool: Manual inspection + Slack (for issues)
- Output: Goods received and verified, or discrepancies reported

**Step 8: Match Invoice to PO** (Owner: Finance Officer) - Within 2 business days of receiving invoice
Match the supplier invoice to the purchase order (three-way match: PO, delivery confirmation, invoice). Verify quantities, pricing, and GST. Resolve any discrepancies with the supplier before approving payment.
- Tool: Xero
- Output: Invoice matched, approved for payment

**Step 9: Process Payment** (Owner: Finance Manager) - Per payment terms (typically next payment run)
Include the approved invoice in the scheduled payment run. Process payment and mark as paid in Xero.
- Tool: Xero + Banking platform
- Output: Payment processed, invoice closed

### Completion Criteria
- [ ] Purchase request submitted with business justification
- [ ] Budget availability confirmed
- [ ] Required approvals obtained per threshold
- [ ] Quotes obtained (for purchases over $2,000)
- [ ] Purchase order issued to supplier
- [ ] Goods/services received and verified
- [ ] Invoice matched to PO and payment processed

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**Complexity:** intermediate | **Setup time:** 15 minutes | **Tools:** Xero, Zapier, Slack