A.M. Limited, a steel fabrication company based in Tamil Nadu, India, scaled up production in FY 2024-25 to meet surging demand from infrastructure projects. To secure raw materials and machinery, the company engaged a n

Depending upon the nature of procurement, the organisations may decide some procurements to be done through a Purchase Order (called as PO route). Review adherence to Delegation of Authority (DOA) for issuance of PO. Reviewing 3-way match controls (Purchase order, Goods Receipt Note (GRN) and invoice booking). This process step involves checking whether the requirement defined in PO has been received as evidenced by GRN, and whether the supplier invoice matches with the received quantity as per GRN and price as per PO. This matching is required before payment made to a vendor. While this process can be automated in an ERP environment, it may be partially automated or manual in a non-ERP environment. This checking includes the checks to ensure compliance with agreed terms and SLAs before processing the invoice and payment. Review PO/signed agreement terms and conditions (T&Cs). This is to observe if any waivers on standard T&Cs have been granted to the vendors with the exception approvals being taken. While enforcing T&Cs with vendors may not be possible, an exception route definition should exist in the policy to approve for the exceptions. Review the process of accounting of procurement, and related segregation of duties within the accounting function including review of accounting system controls on invoice booking and payment processing. Review of payment process including bank payments process and cash payments process (if any) and review of appropriateness of supporting evidence. Review of levy of any interest, penalty or liquidated damages as per the agreed T&Cs. Review of segregation of duties with respect to PO creation & approval, expense approval, receipt of goods/services, accounting and payment processing is an integral part of a Procurement Review.