ZULFIQAR AHMAD & CO.

Client: Mitchell’s Fruit Farms Ltd.

TITLE: A. PURCHASE AND PAYABLES

Purchase & Payable A1.

Purchase
Store Department raises Purchase Requisition (PR) and
Purchase Requisition Requisition forward it to supply chain dept. at Factory.

A1 O

Purchase & Payable A2.

Request for Quotation Supply chain send request for quotations to approved suppliers.
& Comparative Head of supply chain receive quotations and make comparative
Comparative Statement
Statement
statement. Most competitive supplier is selected for purchase of
A2 O
goods.

Purchase & Payable A3

Quotations are called from approved supplier list. Approved
Approved Supplier supplier list is maintained in system.
list

A3 O

A4.
Purchase & Payable Supply chain dept. at factory issues Purchase Order (PO) in
favor of already selected supplier. PO is matched with the PR.
Comparative Supply chain makes seven copies of PO and after approval
Approved
Statement Purchase Order
PO from related concerned dept. send PO to the following;
1. Supplier 2. Quality control dept.
A4 O 3. Factory Accounts 4. Office copy
5. Internal Audit 6. CFO 7. Stores & Planning dept.

Purchase & Payable A5.

Stores and planning dept. on receipt of goods makes Goods
Goods Receipt Note (GRN) and match it with PO. Stores and planning
Goods Received Note
Receipt Note dept. makes three copies of GRN and distribute them to the
following; 1. Office copy 2. Supply chain dept. (Two copies)
A5 O

A6.
Inventory Invoices are received at the accounts dept. at factory. Accounts
Purchase & Payable
System dept. at factory process the invoice in Inventory system and
Sales Tax forward the invoice to supply chain. Supply chain forward the
Invoice Invoicing invoice to head office accounts dept. who process the invoice in
payable system.
A6 F
Payable
System
A7.
Purchase & Payable There are two payment dates (1st and 16th) in the month. On
payment date, payments of all outstanding invoices are made
through coss cheque.
Payment

A7 F
ZULFIQAR AHMAD & CO.
Client: Mitchell’s Fruit Farms Ltd.
TITLE: A. PURCHASE AND PAYABLES

Purchase & Payable A 1.1

Marketing dept. finalize annual sales projection plan.
Annual Sales
Projection

A 1.1 O

A 1.2
Purchase & Payable
Marketing dept. breaks the annual sales projection in monthly
Monthly Sales plan. Monthly plan is reviewed and revised on monthly basis.
Projection

A 1.2 O

A 1.3
Purchase & Payable
Stores & planning dept. define minimum stock levels for each
Define Minimum item of inventory to fulfill the requirements of daily
Stock Levels (MSL) production plan and monthly sales projections, after
for each item
consultation with supply chain.
A 1.3 O

Purchase & Payable A 1.4

Purchase Requisition
Stores & planning dept. raises the purchase requisition when
is raised when stock level reaches the minimum stock level. Stores &
inventory level drops planning dept. raises the purchase requisition after
to MSL consultation with supply chain.
A 1.4 O
ZULFIQAR AHMAD & CO.
Client: Mitchell’s Fruit Farms Ltd.
TITLE: A. PURCHASE AND PAYABLES

Purchase & Payable A 2.1

Supply chain request for quotation from already approved
Request for Quotation suppliers.

A 2.1 O

A 2.2
Purchase & Payable
Quotations from suppliers are received by the head of supply
Quotations are chain. At-least three quotations are received for each item.
Quotations
received by head of In some items less than three quotations are also used
supply chain
(depending upon the nature of items and availability of
A 2.2 O suppliers).

Purchase & Payable A 2.3

Supply chain Head of supply chain prepares comparative statement.
prepares Comparative
Comparative Statement
Statement
A 2.3 O

A 2.4
Purchase & Payable
Supplier with required quality and low price has been selected
to purchase the required item.
Final Selection of
Supplier

A 2.4 O
ZULFIQAR AHMAD & CO.
Client: Mitchell’s Fruit Farms Ltd.
TITLE: A. PURCHASE AND PAYABLES

Purchase & Payable

A 3.1
Prospective supplier A. Prospective supplier apply to the company through
Application apply to the company application in writing or through telephonic conversation with
(supply chain) head of supply chain.
A 3.1 O B. When new supplier source is required then supply chain
search the supplier and ask them to apply.

Purchase & Payable A 3.2

Prospective supplier send the sample product to Quality
Product sample is
Product
tested by the Quality QC Report Control (QC) Lab in factory. QC Lab after detail testing issues
Sample the QC report and forward the report to supply chain dept.
Control Lab

A 3.2 O

A 3.3
Purchase & Payable
Asst. manager supply chain receives the QC report and
forward it to head of supply chain. Head of supply chain
QC Report Supplier finalization
by supply chain
finalize the supplier. If new supplier is approved head of
supply chain forward the details of supplier to accounts dept.
A 3.3 O at head office.

A 3.4
Purchase & Payable
Asst. manager accounts opens the new supplier in the payable
system and intimate the supplier code and other related
Accounts dept. opens
the new supplier Payable information to;
System 1. Factory cost accountant
A 3.4 O 2. Supply chain dept.

A 3.5
Purchase & Payable
Factory cost accountant opens the same supplier in the
Factory cost inventory system.
accountant opens the Inventory
new supplier System

A 3.6 O

Note:
1. Supply chain informs the accounts office for any changes in
the supplier’s information and accounts office amends the
details of supplier.

2. Even on discontinuation of supplier by the company,

supplier is not status as inactive and shown as available for
future use.
ZULFIQAR AHMAD & CO.
Client: Mitchell’s Fruit Farms Ltd.
TITLE: A. PURCHASE AND PAYABLES

Purchase & Payable A 5.1

Gate Pass In is prepared when goods are entered in the factory
Gate Pass In premises.
Gate Pass In

A 5.1 O

A 5.2
Purchase & Payable
Store dept. enters the goods received in the register
maintained in the store and intimate the quality control dept.
Entry of goods in
register

A 5.2 O

Purchase & Payable A 5.3

Quality control dept. checks and verify the quality of the
Quality control goods received and approves the register. If goods are not of
checking required quality then goods are returned without preparing
the goods receipt note.
A 5.3 O

Purchase & Payable A 5.4

Stores and Planning dept. prepares the Goods Receipt Note
Preparation of Goods (GRN) in inventory system and match it with PO. Stores and
Receipt Note Inventory
System planning dept. takes three copies of GRN and distribute them
to the following;
A 5.4 F
1. Supply chain dept. (two copies)
2. Office copy
ZULFIQAR AHMAD & CO.
Client: Mitchell’s Fruit Farms Ltd.
TITLE: A. PURCHASE AND PAYABLES

A 6.1
Purchase & Payable Supplier sends the sales tax invoice to the supply chain dept.
Sales Tax
Supply chain dept. verify the quantity of invoiced items with
Receipt and GRN and rate with PO. After verification, Invoices are
Invoice verification of Invoice
forwarded to the accounts dept. at factory.
A 6.1 O

A 6.2
Accounts dept. (Factory) gets two photocopies of the invoice
Purchase & Payable
and then process the invoice in inventory system and note the
entry number on the photocopied invoices. In inventory
Invoice is processed
in Inventory system Inventory system quantity on invoice is matched with GRN and rate is
System matched with the PO. Accounts dept. then forward original
A 6.2 F and one copy of invoice to supply chain and retain the office
copy.

Purchase & Payable A 6.3

Supply chain forward the invoices to accounts dept. at head
Supply chain forward
the invoices to
office.
accounts dept. (HO)

A 6.3 O

Purchase & Payable A 6.4

Accounts dept. (head office) process the invoice in payable
Invoice is processed accounting system.
in Payable system Payable
System

A 6.4 F