Figure 1: Purchase

Order

Buying is the
organized purchase on
behalf of a purchasing
entity of goods and
services. The
procurement activities
are necessary to ensure
that the required
equipment can be
acquired in a timely
and cost-effective
manner.

A purchase order (PO) is a document indicating what the buyer intends to buy, as well as
how much they will pay for it. That paper is significant because it provides the supplier with
information on whether a buyer may purchase such goods. Such agreements enable both the
buyer and seller to maintain records of their transactions. Whenever it has been decided to buy
something, the purchase order shall be drawn up. The PO shall contain a purchase order date,
FOB shipment details, discount terms, purchaser and vendor names, descriptions of the products
ordered, item quantity, cost, amount, and reference number. In addition, the PO numbers shall be
compared with invoices in order to provide a level playing field for customers when pricing their
products.

Reference:

Philippine Health Insurance Corporation. (2020). Purchase Order. Retrieved from

https://www.philhealth.gov.ph/about_us/bidsNprojects/2020/Regional/PRO4A/PO/20-01-
097_Flyers.pdf
 Figure 2: Purchase Requisition

Each company needs various types of

materials from office supplies, raw materials,
equipment and services on a regular basis. The
purchasing process is widely used, but it's the way
things are done that matters.

A purchase request form is an internal document

which employees use to make purchases on behalf
of their employer. These purchases could be in
connection with business activities, e.g. office
supplies, inventories and production inputs. A
purchase request form shall be sent in order to
obtain approval from the Procurement Department,
which is one step of establishing an effective audit
trail for purchases. A procurement order shall be
issued to the seller of the ordered goods or services when a purchase request has been approved
by the competent department.

Although the purchase request form may appear to be an administrative task that is
merely filled out, it plays a role in your company's procurement process. It shall ensure that the
procurement process is controlled internally, preventing fraud, creating an audit trail and
assisting in improving its efficiency and transparency.

Reference:

Department Of Public Works And Highways. (2017). Purchase Requisition. Retrieved from
https://www.dpwh.gov.ph/dpwh/sites/default/files/webform/goods_and_services/advertisement/P.R.
%20A-0010-17.pdf
 Figure 3: Material Requisition

The identification of the direct

supplies required to complete the job is
the first stage of the work order costing
system after receipt of the job or order.
In order to estimate the type and
quantities of raw materials needed for
production, a statement of material may
be drawn up.

Once we've figured out how much material we're going to need, we're going to start
giving it to make things. The production department shall produce the materials requisition form
in order to ask for what they need. When you sign that paper, the person who works at the
warehouse will use it to figure out how much money was spent on everything they're giving
away.

The form MAC001 which is required to request materials can be seen in the picture. The
form indicates what will be added to a work currently under preparation and the number of them.
The price of these things is put on unfinished goods that are being produced, and the volume of
materials left behind goes down by the same amount. The department that holds the supplies
keeps a record of how much they've got. For the purposes of knowing what cost each job,
another record is kept in the accounting section.

Reference:

Principles of Accounting, Volume 2: Managerial Accounting. Retrieved from

https://openstax.org/books/principles-managerial-accounting/pages/4-2-describe-and-identify-the-
three-major-components-of-product-costs-under-job-order-costing
 Figure 4: Work Order

A work order is a message from the

boss telling the factory how much of
something to make. The work order is an
indication of what kind of materials are
needed for the production of a product from
which it has been stockpiled.

The normal work order is the usual

task of ensuring that operations are carried
out properly. It's not going to put anything
important at risk. In some cases, they're
getting rid of their older machinery and
replacing it with new equipment such as painting or switching bulbs.

In a lot of ways, the request for work is useful. First, it arranges for the tasks that have to
be done so they don't get forgotten. Moreover, it is appropriate to finish the mission at a time that
works best for everyone. It's going to make equipment work better, and it's going to make it
available more frequently. Additionally, the company can save money by making its costs easier
to manage, serving customers more effectively, using fewer paper and reducing the number of
work that needs to be completed, improving security and assisting workers with their tasks. It is
useful to arrange things in advance. It makes things better and saves money, all of these benefits.
Overall, it is quite clear that every company has to look after maintenance work well. In order to
track the required maintenance work, it is important to have working orders.

Reference:

Jobber. (2023, February 28). Work Order. Retrieved from https://getjobber.com/free-tools/work-order-

generator/hvac/
 Figure 5: Sales Order

A sales order is a piece of paper that tells the

buyer what they're buying from the seller. A sales order
has information about what was ordered, how much it
costs, how much was ordered, and any rules that apply.

Information on the customer's name and how to

contact the seller is included in a sales order. It shall also
have billing and shipping information, details of the
product or service purchased, the price with or without
taxes and shipping charges, and any selling rules. It has to
be signed, and there may also be some additional
information.

Sales order is when someone wants to buy something, by submitting a request they ask
the seller how much it's going to cost is. Then, the person selling replies with a proposition when
they agree to the request. The customer's agreed to purchase the product and has ordered it. After
that, the seller gets the order to buy something (PO) and makes a sales order with the
information. The seller sends to the buyer a document known as an Order of Purchase, which
confirms the details of the sale. In addition, the seller arranges and prepares goods or services to
be received by a customer. The seller has given goods and services to a buyer by placing them on
the market.

Reference:

Emley,B. (2022, October 27). Sales order vs. Purchase order vs. invoice: a guide to sales
documentation. Retrieved from https://zapier.com/blog/sales-order/
 Figure 6: Cash Receipt

Companies have to perform a

number of functions within the business,
for example managing their products,
taking care of investors and watching
people who borrow money from them.
They use a lot of money to do these things.
For this reason, in order to show a true
image of how the enterprise works, it is
necessary for enterprises to keep records of
all money received and spent. Money
movements are recorded as cash entering
and leaving the company.

For every payment in cash, a business will make a paper known as an "cash receipt" that
can be used to track what's coming in. Cash receipts show the amount of money that a person has
received from people, banks, or other financial institutions. Cash receipt is proof that you've
gotten something from someone other than yourself. You can get it from a loan, the bank, or
somebody who helps you out. You're going to be given a piece of paper showing how much
money you earned, which is important for closing the transaction.

In order to track the flow of cash, receipts are created with a view to preventing money
being misused. There is a higher risk of fraudulent activities in working with other companies if
they are dependent on cash. Keep a record of your cash receipts is important. The cash receipts
plan is different for each organisation. Some people like to have long records, while others only
want short receipts. It helps you determine who stole money, and if the company has a history of
issues with receiving money, it would be easy to see that someone was stealing money by
looking at its records.

Reference:
Dubey, H. (2023). Cash Receipts. EDUCBA. Retrieved from https://www.educba.com/cash-receipts/