Page 123 -

Process 105

Vendor data are optional. When they are included, they indicate a
preference for the source of supply. Vendor data include the vendor number
and name.
It is also possible to requisition materials that do not have material mas-
ter data, but this procedure must be performed manually. Basically, the requi-
sitioner provides a description of the material instead of a material number. In
addition, he or she provides data that are normally obtained from the mate-
rial master, including delivery location, material group, purchasing group, and
account assignment category. Further, depending on the account assignment
category, additional data such as cost center, asset number, and general ledger
accounts can also be included. (At this point you might want to review our
discussion of account determination earlier in the chapter.)

Tasks
The only task in this step is to create the purchase requisition using the speci-
fi ed data.

Outcomes
The process document that results from this step is the purchase requisition. The
system will assign a unique requisition number to this document, which the
concerned parties can use to track its progress through the various steps in
the process. Signifi cantly, this step does not generate any fi nancial or manage-
ment accounting documents because creating a requisition has no fi nancial
1
impact. Moreover, because there is no goods movement (that is, no materials
are received), no material document is created either.
In our example, the trigger for the procurement process is low inventory
of t-shirts. GBI has determined (through material planning, which we discuss
in Chapter 8) that t-shirts must be reordered when there are 50 or fewer left in
inventory. In addition, the shirts must be purchased in quantities of 500. GBI
was alerted to the need to reorder by an employee in the plant who reviews
inventory reports that are printed at the beginning of each day. This individual
observed that the inventory of t-shirts at the Miami plant had fallen below 50.
As a result, he created a purchase requisition for 500 t-shirts to be delivered to
the Miami plant by a specifi ed date.

SOURCE OF SUPPLY DETERMINATION
Once again, a requisition is merely a request for material; it does not represent a
legal obligation to purchase anything. In contrast, a purchase order constitutes
an obligation to purchase. As Figure 4-15 illustrates, there are three paths to
create a purchase order, depending on whether the source of supply is known.

1 Although there is no fi nancial accounting impact when a requisition is created, a requisition typi-
cally will result in the purchase of the needed materials. To help with planning for anticipated
expenses, when purchasing consumable materials, a requisition will result in an internal record of
the potential obligation, called a commitment, if the commitment management process in man-
agement accounting is in use.

31/01/11 7:35 PM
CH004.indd 105 31/01/11 7:35 PM
CH004.indd 105