WHY DO I NEED TO RAISE A PURCHASE ORDER

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UAS Conference 2010

Why do I need to raise a Purchase Order Purchasing Department Finance Division

14 September 2010 Page 1

Why Raise a Purchase Order (1) Minimizes Risk •



A purchase order provides a clear statement to the supplier of what is being purchased, the agreed cost, and the payment terms of the University. Communicating this in advance in an approved document minimizes the likelihood of queries, disputes and possible legal consequences.

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Why Raise a Purchase Order (2) Maximizes University Cash •

The University can maximize the use of its cash reserves by ensuring that suppliers are only paid in accordance with its standard payment terms, as defined on the purchase order.

Improves Budget Management •

Budget management is enhanced with commitment information if purchase orders are created in advance of the receipt of invoices and posting of actual costs.

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Why Raise a Purchase Order (3) More Efficient Handling of Receipts and Invoices •

Receipting and the processing of invoices is made easier when a purchase order number is provided, enabling the original order to be found quickly and the receipt / invoice compared.



Physical checks can also be made on any goods supplied to ensure they conform to those ordered.

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Why Raise a Purchase Order (4) Demonstrates Compliance •

It is relatively simple to run audit reports in Oracle to identify invoices that are not matched to orders and orders created after the invoice date.



Departments where this occurs are more likely to attract audit attention in detail, whereas those that are clearly compliant will enjoy a ‘lighter touch’.

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Why Raise a Purchase Order (5) Supplier Relationship •

Better supplier relationships are enabled through the use of a consistent means of communicating purchase requirements and payment terms on a standard format purchase order form.

Frequent/Multiple Order • Through the use of blanket purchase orders, frequent and multiple purchases can be better and more efficiently processed – e.g. 1 order can cover a 12-month period of supply and commitments will be reflected against budgets. 14 September 2010 Page 6

How to Raise a Purchase Order Raise a purchase requisition on Oracle Financials which transforms into a purchase order once approved. In all instances purchase orders must be created in Oracle Financials in advance of the goods, services or invoice being received.

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When to Raise a Purchase Order University Financial Regulations and Purchasing Procedures require that a PO is raised for all purchases unless: • •

the total cost is less than £100; or: the purchase appears on the approved List of Exceptions.

This can be found on the Purchasing website, under: •

Procedures > PO Exceptions; Go to:



www.admin.ox.ac.uk/finance/purchasing 14 September 2010 Page 8

Any Questions?

14 September 2010 Page 9