Question: Which of the following is the first step in the purchasing and payment process?
A Purchaser receives an invoice for the goods shipped by the supplier
B The purchaser receives the inventory and prepares a receiving report
C The purchaser sends a check to the supplier
D The purchaser sends a purchase order to the supplier
Answer: The purchaser sends a purchase order to the supplier
| Steps in the purchasing and payment process | Description | |
| 1 | Identify the need | Recognize the requirement for goods or services within the organization. |
| 2 | Send purchase order | Prepare and send a formal purchase order to the supplier, specifying the details of the purchase. |
| 3 | Supplier acknowledgment | Receive confirmation from the supplier that they have accepted the order. |
| 4 | Receive and inspect goods | Physically receive the goods or services and inspect them for quality and quantity. |
| 5 | Prepare receiving report | Create a detailed report of the received goods or services, noting any discrepancies or issues. |
| 6 | Receive supplier’s invoice | Receive an invoice from the supplier for the goods or services shipped. |
| 7 | Invoice verification | Verify the supplier’s invoice against the purchase order and receiving report. |
| 8 | Match documents | Ensure that the invoice, purchase order and receiving report match and are accurate. |
| 9 | Approve invoice for payment | Authorize the invoice for payment, typically involving internal approvals. |
| 10 | Send payment | Send a payment to the supplier, which could be in the form of a check or electronic transfer. |
| 11 | Process payment | Complete the financial transaction, including recording the payment in accounting systems. |
| 12 | Record transaction | Document the transaction in financial records and systems for tracking and reporting. |
| 13 | Reconcile accounts payable | Reconcile accounts payable to ensure they align with financial records. |
| 14 | Store and archive documents | Safely store and archive all relevant documents for future reference and auditing. |
| 15 | Perform periodic vendor statement reconciliation | Regularly reconcile vendor statements to ensure accuracy and resolve discrepancies. |