Procurement Process and Transaction Management
This domain tests end-to-end transaction flow: requisition, purchase order, receipt, invoice, and payment, plus statuses, change orders, holds, and closure. You need to know which action is reversible and which is not.
Lifecycle and statuses
A requisition moves through Incomplete, Pending approval, Approved, Rejected, Withdrawn, Canceled, Closed, and Finally Closed. "Close" can be reopened; "Finally close" is terminal and prevents further receiving, invoicing, or changes. Purchase orders follow a similar path, and approved orders change through revisions.
Receiving and matching
Receipt routing includes direct delivery, standard receipt, and inspection required. Matching can be 2-way (PO and invoice), 3-way (PO, receipt, invoice), or 4-way (PO, receipt, inspection, invoice). Invoice holds include quantity, price, matching, and budget holds. Tolerances determine whether a variance passes, warns, or holds.
Change management
A change order on an approved PO creates a new revision. Whether it needs reapproval depends on "Manage Change Orders" configuration. Canceling a document stops it; closing it finalizes remaining obligations.
Worked example
A PO is for 100 units at $10 = $1,000. The supplier ships 95, and the invoice is for 95 units at $10 = $950. Under 3-way match, the invoice matches the receipt quantity. If the quantity tolerance is 5%, a 5-unit shortfall is 5%, so the invoice passes. If tolerance were 2%, the invoice would be held for quantity variance. If the invoice were for 100 units while only 95 were received, it would be held for over-invoicing.
Traps
- Thinking invoice matching is always automatic regardless of receipt.
- Confusing cancel with close.
- Assuming services always require receipt; they may be amount- or milestone-based.
- Treating "Finally close" as reversible.