Purchase Approval Workflow Guide

Overview

This purchase approval workflow ensures every IT procurement follows a consistent, auditable path from request to payment. It prevents unauthorised spending, creates a clear audit trail for GST compliance, and ensures purchased items are properly recorded in the inventory registry.

Step 1: Purchase Request

An employee raises a purchase request through the helpdesk. The request must include:

• Item name, specification, and quantity.
• Estimated cost per unit and total cost in INR.
• Preferred vendor (if any) and reason for selection.
• Business justification — why this purchase is needed and what problem it solves.
• Budget code or department to be charged.

Step 2: Technical Review

The IT Head or designated reviewer evaluates the technical requirements:

• Does the specification match the need? Can a lower-cost alternative work?
• Is the item already available in inventory or surplus from another department?
• Are there compatibility requirements with existing systems?
• Recommendation: Approve, modify specification, or reject with reason.

Step 3: Financial Approval

Based on the total value, the request routes to the appropriate approver:

Amount Range	Approver
Up to ₹5,000	Auto-approved (IT Head notified)
₹5,001 - ₹50,000	Department Head
₹50,001 - ₹2,00,000	Finance Head
Above ₹2,00,000	Director / CEO

Step 4: Purchase Order

Once approved, a purchase order (PO) is generated with the vendor's GSTIN, item HSN code, agreed price, and delivery terms. The PO is sent to the vendor and a copy is saved in the purchase registry.

Step 5: Receipt & Verification

When the item arrives, the receiving team verifies:

• Item matches the PO specification and quantity.
• Invoice matches the PO in pricing and GST details.
• Item is in working condition with no visible damage.
• GRN (Goods Receipt Note) is generated and attached to the PO record.

Step 6: Inventory Entry & Payment

The asset or inventory is added to the registry with serial number, purchase date, warranty details, and assigned location. The invoice is forwarded to accounts for payment within the agreed credit period.