Document No SOP/FIN/ 03

Revision No 01
STANDARD OPERATING PROCEDURE
Title Issue Date
STANDARD OPERATING PROCEDURES FOR PURCHASES

1. PURPOSE: to provide a method and set up a process for purchase of material from the
vendors at Novus Green Energy Systems Pvt. Ltd and also to ensure timely delivery of goods
by the vendor with best possible quote.

2. SCOPE: This procedure applies to all vendor purchases, and cash purchases. Purchases
include only the material required for project implementation and doesn’t include purchases
for office use.

3. POLICY & PROCEDURE:

Vendor Selection

 Vendors are to be selected based on the price, quality, delivery on time.

 A minimum of 3 vendors to be selected for each category and to be presented to
the top management for finalization.
 Once after selection, if the vendors are not responsive to the queries or
complaints are eligible for disqualification as a vendor
 Operations manager has to oversee the technical and QA requirements on all
items (materials, components, and parts) to ensure that purchased items meet
design requirements and lodge complaints if the quality standards are not met
 All the vendor agreements must be stored at a safe place in the head office as
mentioned in the document storage policy
 Finance department must be kept aware of any new vendor selection and the
terms and conditions must be shared
 Any finance requirements must be given to the vendors such as PAN number for
TDS deduction

Private and Confidential Page 1

 Vendor Purchases

 Operations Manager has to coordinate with the Purchase manager in advance to

book orders for the material required for project implementation
 Operations Manager also should ensure sufficient stock order levels while
implementation of a project
 Purchase manager has to book the taking the approval from the Finance Head
for the price quoted by the vendor and an approval from the Operations
manager for the quantity mentioned in the purchase order
 A quotation master sheet has to be maintained with the Purchase department
and the Finance department and has to be updated whenever there is a change.
This sheet helps the finance team to refer at the price at which other vendors
agree to supply. Purchase manager has to mention while giving a purchase
order, a reason for deviation in price if any.
 Purchase manager has to avoid as many cash purchases as possible and ensure
all the vendor are paid by cheque or e-payment
 Purchase manager has to manage shipping, handling and storage requirements
on components to ensure high quality items are received and issued to the
appropriate departments.
 Finance manager has to ensure all the purchases are budgeted

Private and Confidential Page 2