September 14, 2018

Version 1

MEMORANDUM

SUBJECT: PURCHASING PROCESS

CREATED BY: John Cartano

1. Requisition

 The DO department (requesting party) recognizes a need and places a Material Request Form (MRF). As an
example: The need might be a client request for an upgrade of a computer or purchase of a new software. In
addition, the need can be in a form of a service.

 The MRF is validated and authorized by the head of the department requesting the need. He will be the first line of
approval of the request.

 Approved MRF is then forwarded to Finance/Purchasing

2. Authorization and Creation of Purchase Order

 Finance/Purchasing receives and validates the MRF. The validation includes checking the exact specifications of
the need to ensure the company does not purchase the wrong need and we do not overspend. Purchases should
be fit for purpose.

 Create a Job Code for the MRF. This ensures proper cost tracking, allocation, and billing to the client, if applicable.

 A Purchase Order (PO) is created in XERO and is approved by the Country Manager.

 The PO is forwarded to different suppliers for a request of quote. Make sure that the PO is clear and concise. This
will ensure all suppliers are quoting on the same specifics of the order.

3. Purchase Order validation and supplier negotiation

 Negotiate with supplier with regards to brand, price, payment terms and tax implications. In some instances,
depending on the value or quantity of the order, a legit testing of suppliers is required.

 At least 2-3 quotes should be attached to the PO for final approval of the purchase.

 Summarize the details of the quotes on a Quote Summary for easy review and management decision

 The PO and Quote Summary is forwarded to the authorizing person for review and final signature.

4. DO Purchase Order Authorization Levels:

 Managing Director or President - For purchases above Php 100,000

___________________________________________________________________________________________________________
Clark, Philippines Office: Brisbane, Australia office:
+63 45 5987557 +617 3054 4670 or 13 000 DEPTH
th
5 Floor Clark Center 07 Building Suite 2, 3rd Floor, 164 Grey St.
Clark Center, Jose Abad Santos Avenue South Brisbane, QLD 4101
Clark Freeport Zone, Pampanga 2009
  Country Manager - For purchases from Php 1,000 to Php 99,999

 Department Heads - For purchases from Php 1 to Php 999

5. Receipt of Goods and Services

 Upon receipt of the order, DO representative inspects and reconciles the goods vs the PO.

 In case of services, DO representative inspects the quality of the services if it is at par with the supplier quote after
the service is complete.

6. Invoice

 Upon receipt of the supplier invoice, the PO is reconciled to the details of the invoice.

 The invoice is entered to XERO and booked in the proper coding in the job codes for proper cost allocation and
proper billing to the client, if applicable.

 Payment is made based on the terms negotiated to plan and maximize cashflow

PROHIBITIONS:

The following practices are specifically prohibited:

 Receiving personal compensation including direct or indirect gratuities, commissions, gifts or other type of
compensation for placing a Depth Offshore purchase with a supplier or contractor.

 Splitting purchase transactions by preparing two or more purchase transactions to the same supplier or preparing
two or more purchase transactions to different suppliers for the same items to avoid higher authorization processes
or PHP amount limitations.

 Engaging in any purchase transactions that would represent a conflict of interest.

Employees who make unauthorized or prohibited purchases or procure goods or services outside of their delegated
authority assume the risk of personal liability for payment of the goods or services including any fees directly attributable
to the purchase. Failure to adhere to the conditions of the delegated authority may result in the revocation of delegation.

Any disciplinary action resulting from violations of this policy/procedures shall be administered in a manner consistent
with the terms stated in the Employee Manual that will provide an employee suspension as the minimum or employee
termination at the maximum.

Author:

_____________________

John Cartano-Country Manager

___________________________________________________________________________________________________________
Clark, Philippines Office: Brisbane, Australia office:
+63 45 5987557 +617 3054 4670 or 13 000 DEPTH
th
5 Floor Clark Center 07 Building Suite 2, 3rd Floor, 164 Grey St.
Clark Center, Jose Abad Santos Avenue South Brisbane, QLD 4101
Clark Freeport Zone, Pampanga 2009
 Approved:

_____________________

Brad Skelton-Managing Director

___________________________________________________________________________________________________________
Clark, Philippines Office: Brisbane, Australia office:
+63 45 5987557 +617 3054 4670 or 13 000 DEPTH
th
5 Floor Clark Center 07 Building Suite 2, 3rd Floor, 164 Grey St.
Clark Center, Jose Abad Santos Avenue South Brisbane, QLD 4101
Clark Freeport Zone, Pampanga 2009