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Purchase & Payment Cycle, Substantive procedures:, Key documents &…

- - - - List of approved suppliers from which buyer may acquire goods & no deviations therefrom except with senior official authorisatio
    - - Sequentially numbered PO’s
      - PO’s include: supplier name; quantity ordered; description of the goods; price; discounts; terms of payment; delivery address; buyer signature
      - Issued in triplicate
- - - - Staff receiving goods must inspect goods for type, quality & quantity against POs before DN delivery note signed
    - - Details of goods received captured on GRN
      - GRN signed off by individual responsible for receiving
      - GRN includes: quantity of goods received; purchase order number; date goods received; goods description; and details of receiving person
      - Issued in duplicate
        
        Ordering department
        
        Accounts department
- - - - Invoices received not included in records if has not been approved
        as correct by a person/s check/s accuracy of supplier’s
        invoices.
        
        Should check: (a) quality, type, quantity & date to GRN & DN; (b) price, terms & account details to agreed PO; and (c) calculations on invoice/s
    - - Directly entered in purchase journal & filed under the
        suppliers’ name and checked to statement received from supplier
    - - Kept separately & followed up by senior
        staff
- - - - Test of control: Select a sample of payments from the creditors account per the creditors ledger and inspect whether it is supported by an authorised cheque requisition; creditor's reconciliation; paid cheque;supporting documentation namely purchase order, GRN, invoice, creditor statement