You saw the workflow and a typical set of steps that defined a workflow. Let us talk about purchase order based and non-purchase order based transactions today.
As I mentioned earlier, the first and the very basic classification can be:
- PO (purchase order) based
- Non-PO Based.
Why is this classification so important? This classification is important because fundamentally the workflow will change from your perspective. The moment we talk about purchase order based invoices, our confidence and ease of processing increases. As the name suggests, for these invoices, a purchase order would have been released. What that really means, is that these would have been pre-approved based on the business rules authorized by your client. There will be a high confidence that before a PO is released, all approvals are through.
On the other hand a non-PO invoice would have come in as an ad-hoc purchase or service. It will need an approval, and you will be asked to get approvals post you complete the entries.
The variants can be many like the ones listed below:
- Purchase Order Based Procurement Invoices
- Non-Purchase Order Based Procurement Invoices
- Purchase Order Based Service Invoices
- Non-Purchase Order Based Service Invoices
I have just covered some basic ones, each organization may define multiple categories.
In the above four, I have covered a 4X4 matrix of PO, Non-PO, procurement and service invoices. Companies may also classify these as manufacturing / trading purchases, office use purchases falling under SG&A (sales and general administration) and as their business demands.
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