Checks 1–3: what forecast drives this, how confident is it, and what is the real lead time?
The first three checks are the inputs that decide whether the order is needed at all. The forecast behind the order should be visible, with its confidence: a high-confidence forecast on two years of steady sales justifies a full order; a low-confidence forecast on a new SKU justifies a smaller one. The lead time should be the supplier's measured time from the store's own purchase order history, with its variance, not the quoted time.
- Forecast: verify the daily demand the order assumes and the history it came from.
- Confidence: verify the label, and for low confidence, verify the order is sized smaller and more frequent.
- Lead time: verify it is measured from past receipts for this supplier and that the variance is shown.
Checks 4–5: why this quantity, and are minimums and price breaks applied?
The quantity checks make sure the number is reasoned. The quantity should be explained: lead-time demand plus the safety stock the service level requires, adjusted for stock on hand and on order, and for any scheduled promotion. The supplier's minimum order quantity and any price breaks should be applied and shown, so that an order rounded up to a minimum, or up to a break that lowers unit cost, says so rather than appearing arbitrary.
- Quantity logic: verify the arithmetic from demand, lead time, safety stock, on hand and on order to the proposed number.
- Minimums and breaks: verify the minimum is met and any rounding to a price break is stated with its unit-cost effect.
Checks 6–8: what does it cost landed, what cash does it tie up and when, and how much cover does it buy?
The money checks are where an order that is right on quantity can still be wrong for the month. Landed cost per unit should include freight, duty and inbound handling, not just the supplier's unit price. The cash the order ties up and the date it falls due, under the supplier's payment terms, should be stated. The days of cover the order provides at forecast demand should be shown, so the approver can see whether it buys six weeks or six months.
- Landed cost: verify freight, duty and handling are included and that the figure matches the landed-cost sheet.
- Cash and due date: verify the total and when it is payable under the supplier's terms.
- Cover: verify the days of cover at forecast demand and that it is not far beyond the store's target.
Checks 9–10: does it fit the ceiling and the supplier's record, and does it need a second approver?
The last checks are policy. The order, added to orders already approved this month, should fit inside the cash ceiling the owner set; if it does not, the approver needs to decide between the risk and the ceiling explicitly. The supplier's recent delivery record, late or short receipts, should be visible, because a supplier whose variance is widening deserves a smaller order or a second source. And an order above the threshold should show that a second approver is required and who that is.
- Ceiling and record: verify committed cash including this order stays inside the ceiling, and read the supplier's last few receipts.
- Second approver: verify whether the value crosses the threshold and that the second approver is named on the proposal.
How should the checklist be used in practice?
The checklist should be applied to every purchase order, not just large ones, because the small orders are where a bad lead time or a missing landed cost hides. In practice this means the ten items should be on the order form itself, so approving is reading rather than investigating, and an order missing any item is sent back rather than approved on trust. Keep the record of approvals, edits and rejections with their reasons; it is the evidence for which inputs were wrong and which suppliers to watch.
Edits are as informative as rejections. An approver who cuts a quantity every time for one supplier is telling the planning process something the supplier record does not hold.
What does the Inventory FTE add to this checklist?
The Inventory FTE on ftes.ai puts all ten items on every purchase order proposal in the Approvals tab: the forecast and its confidence, the measured lead time and variance, the quantity arithmetic, minimums and breaks, landed cost, cash and due date, cover, the ceiling check, the supplier's recent receipts, and the second-approver flag. The approver reads and decides; edits and rejections become rules the FTE applies to the next proposal.
What it does not add is the signature. No autonomy level lets the Inventory FTE place an order, and the ceiling and the second-approver threshold are policy it enforces on itself.