As a matter of financial compliance, organizations should use Purchase Orders for all of their purchasing over a certain minimal limit. This builds a level of financial control in the organization as Purchase Orders do two things
Organizations that don’t use Purchase Orders run the risk of fraud as well as risking runaway spending that may never be caught or caught after it is too late. Abel ERP is built so that organizations can use the purchase order functionality as a tool of financial control as well as vendor compliance. In this article we will focus on the financial control element and in a subsequent blog article I will focus on the vendor compliance aspect of purchasing.
The control is ensured by the powerful purchase order (PO) approval process built into Abel ERP.
PO below $1000 don’t require any approval
PO above $1000 and less than $1,0000 require approval from a Sr. Manager
PO above $1,0000 and less than $10,0000 require approval from Sr. Manager AND a Vice President.
PO above $10,0000 and less than $100,0000 require 3 approvers including one Sr. Manager and two Vice Presidents
PO above $1000,000 requires 3 approvers including one Sr. Manager, one Vice President and the CEO.
While this would be a fairly logical scenario, most ERP systems in the market can’t support this scenario because of product limitations or outdated technology. Many ERP systems don’t support Purchase Order approval at all or require significant customization and corresponding cost to implement this. In those scenarios approvals are often done outside of the system via email or some offline mechanism which doesn’t have an approval audit trail.