Essential Procurement & Inventory Terms for ERP Users

Procurement

Definition: The process of sourcing supplies, goods, or services for an organization. It covers everything from needs planning, vendor selection, and contracting to goods inspection and payment. In Thailand, government procurement is governed by the Government Procurement and Supplies Management Act B.E. 2560 (2017).

Example in ERP: The "Procurement" menu in Saeree ERP covers the entire process from creating a Purchase Requisition (PR) to issuing a Goods Receipt (GR), with automatic status tracking at every step.

Direct Purchase / Specific Method

Definition: A procurement method where the organization directly invites a specific vendor or contractor without competitive bidding. Used for purchases not exceeding 500,000 THB or when there is only one available supplier.

Example in ERP: When creating a Purchase Order (PO), the user selects "Procurement Method = Direct Purchase." The system will not require comparative price quotation documents from multiple vendors.

Selection Method

Definition: A procurement method that invites at least 3 vendors to submit price quotations for comparison. Used for amounts higher than the Direct Purchase threshold but below the e-bidding threshold.

Example in ERP: The system records multiple vendor quotations in a "Price Comparison" form, then selects the vendor with the lowest price or best quality based on the defined criteria.

e-bidding (Electronic Bidding)

Definition: An electronic procurement method through the Comptroller General's Department system, where vendors submit proposals electronically. Used for purchases of 500,000 THB and above.

Example in ERP: The system records the e-bidding announcement number from the Comptroller General's Department website and links it to the Purchase Order for traceability and audit purposes.

e-market (Electronic Market)

Definition: A procurement method for standardized goods (such as paper and printer ink) through the Comptroller General's Department's electronic marketplace, comparing prices from registered vendors in the system.

Example in ERP: When purchasing through e-market, users record the reference information from the e-GP system in the Purchase Order to verify accuracy against the Comptroller General's Department system.

TOR (Terms of Reference)

Definition: A document that defines the scope of work, specifications, technical requirements, conditions, and timeline that the vendor or contractor must comply with. It serves as the criteria for evaluating proposals.

Example in ERP: The system stores TOR files attached to procurement projects, allowing users to retrieve them for reference, especially when inspecting delivered goods or services.

Purchase Requisition (PR)

Definition: An internal document prepared by the requesting department to notify the procurement unit of the need to purchase goods or hire services. It is the starting point of the procurement process.

Example in ERP: Users create a PR specifying the item list, quantity, budget, and justification, then submit it for approval through the Workflow before the procurement team proceeds.

Purchase Order (PO)

Definition: A document issued to a vendor or contractor to confirm the purchase of goods or services. It specifies item details, price, quantity, terms, and delivery schedule.

Example in ERP: A PO is generated from an approved PR. The system automatically pulls vendor information, item lists, and pricing. Once a PO is issued, the budget is immediately committed.

Goods Receipt (GR)

Definition: A document that records the receipt of goods or work output by the Acceptance Committee, confirming that the delivery matches the PO and TOR before payment processing. Learn more in our Goods Receipt article.

Example in ERP: Users create a GR referencing the PO. The system verifies the received quantity against the ordered quantity. When fully received, the PO is automatically closed and warehouse stock levels are updated.

Acceptance Committee

Definition: A group of individuals appointed by the head of the organization, responsible for inspecting goods or work output delivered by the vendor/contractor to verify completeness and compliance with the contract or PO.

Example in ERP: The system records the committee members for each project. Once all members have signed off, the system changes the GR status to "Accepted" and forwards it to the finance department for payment.

Supplies / Materials

Definition: A general term covering goods, consumable materials, durable goods (fixed assets), and land and buildings that an organization procures for operations, as defined by Thailand's Government Procurement Act.

Example in ERP: The "Supplies" menu is divided into subcategories: Consumable Materials, Durable Goods (Fixed Assets), and Land & Buildings. Users must select the correct type when recording items.

Consumable Materials

Definition: Items that are expendable or have a short useful life, such as paper, printer ink, and office supplies. Typically valued at no more than 5,000 THB per unit.

Example in ERP: Consumable materials are recorded as "Expendable Goods" in the warehouse system. When issued, stock is deducted immediately without registering as a fixed asset.

Inventory

Definition: Goods or materials stored in a warehouse, ready for issue or distribution. Effective inventory management helps reduce storage costs and prevents stockouts.

Example in ERP: The system displays real-time stock balances. When goods are received (GR) or issued, balances update instantly, with automatic alerts when stock falls below the Reorder Point.

FIFO (First In, First Out)

Definition: An inventory valuation method where items received first are issued first. This prevents expiration or deterioration and reflects actual costs in chronological order. Read more in our FIFO explained article.

Example in ERP: When FIFO is configured in Saeree ERP, every time goods are issued, the system automatically selects the earliest-received lot, displaying the receipt date and cost of each lot.

Reorder Point (ROP)

Definition: A predetermined minimum stock level. When the on-hand balance drops to this point, the system triggers a reorder alert to prevent stockouts while waiting for new supply.

Example in ERP: A user sets the ROP for A4 paper at 50 reams. When the balance reaches 50 reams, the system sends a notification to the procurement team and automatically creates a draft PR.

Contract

Definition: A written agreement between the organization and the vendor/contractor specifying the scope of work, price, duration, payment terms, and penalties for breach of contract.

Example in ERP: The system stores contracts with attached files, tracks expiration dates, sends alerts 30/60/90 days before contract expiry, and links to all POs referencing that contract.

Performance Bond

Definition: A security deposit provided by the vendor or contractor to guarantee contract compliance. Typically 5% of the contract value, it may be in the form of cash, a bank guarantee letter, or a bank check.

Example in ERP: The system records bond details including type, value, and expiration date, and sends alerts when it is time to return the bond after successful goods/work acceptance.

Penalty / Liquidated Damages

Definition: An amount the vendor/contractor must pay to the organization for late delivery or non-compliance with the contract. Typically calculated as a daily percentage of the undelivered work value.

Example in ERP: The system automatically calculates penalties based on the contract due date versus the actual acceptance date, then deducts the penalty from the payment amount automatically.

Procurement & Inventory Glossary Summary Table

References

• Comptroller General's Department — Government Procurement and Supplies Management Regulations
• Government e-Procurement System (e-GP)
• Government Procurement and Supplies Management Act B.E. 2560 (2017) — Royal Gazette