RETAIL PROCESS

What is Retail on Daraz?

“Strategic purchases done by Daraz under defined credit terms with the
supplier, based on an ‘approved business’ plan fall under the retail
operation”
RETAIL SYSTEM
Retail System (Snap Shot)
Process overview (Summary)
Retail process starts with Purchase Order being placed to the supplier. Daraz
recognizes a payable to the vendor once an item is inbounded at the warehouse
• Buying Request (Internally)
• PO is raised (by commercial team)
• Item inbounded in Retail system will be shown vendor wise
• All item physically inbounded in Dabao will be tagged to “Daraz Retail Seller”
• Receiving Invoice and PO;
• Before making payment ensure that status of concerned PO is “PO Closed”.
• Reconciliation of Invoices against PO (manual working);
• Entering invoices into ERP (Payable Module);
• Processing Payment (by Payment Team)
Retail System : Supplier Creation
Suppliers
• All the suppliers will be created and updated in Retail System by
Commercial team.
• All relevant information will be recorded offline on sales force
(including Bank Details, Business Registration (NTN/CNIC),
VAT Registration)
• Sales of all retail items on ASC will be made through vendor
‘Daraz Retail Seller’.
• A single SKU can be used by multiple suppliers.
Add suppliers
Fill in the required supplier details and click
submit
The created supplier should be visible in
Manage Suppliers tab
Retail System : SKU Management
SKUs
• SKUs for retail items will be created by Commercial Team on
ASC
• After every half hour, new SKUs are synced to Retail System
from ASC
• Single SKU can be assigned to multiple Sellers
• Tax Rate will be maintained at each SKU on Seller Level
SKU management - Manual
SKU management - Manual
SKU management - Manual
SKU attributes & assigning to suppliers
SKU attributes & assigning to suppliers
SKU attributes & assigning to suppliers

Or Click on the assign button to enter supplier details.

Note that multiple suppliers can be added. (Note: Act as per the SOP limitations)
SKU attributes & assigning to suppliers
SKU management - Manual
SKU management - Manual
Mass upload SKU costs
Mass upload SKU costs
Mass upload SKU costs
Mass upload SKU costs
Retail System : Buying Request
Creating new buying request- Manual
Creating new buying request- Manual
Creating new buying request- Manual
Creating new buying request- Mass upload
Creating new buying request- Mass upload
Creating new buying request- Mass upload
New buying request – editing buying request
New buying request – editing buying request
Purchase order creation
Purchase Order (Summary)
• Purchasing process starts once Buying Request is filled internally. BR will be either be
approved or rejected by Commercial.
• Once buying request is approved, PO will be prepared
• PO will fetch the cost from the SKU cost that has been updated in the Retail System. Cost
will be entered either by Retail Team or Category Heads
• PO will be then passed onto the supplier. Supplier will be required to approve the PO using
Seller Portal.
• Once approved, PO status will change from ‘Approved by Retail’ to ‘Approved by Vendor’.
• All goods received information will be initially recorded in Dabao System. Dabao will
automatically update in Retail System
• PO Report is exported from Retail System which contains all the details regarding PO
mentioned above.
• Moreover, PO Number in Retail System will be the same as that in ERP.
Adding Purchase order request to retail
Adding Purchase order request to retail
Adding Purchase order request to retail
Adding Purchase order request to retail
Mass upload PO
Mass upload PO
Mass upload PO
Editing PO request
Filtering & downloading PO data
Filtering & downloading PO data
PO Types and Status
• Types:
1. Normal PO (for normal purchases);
2. Pre-Sell PO (for items that are not available now but orders are being taken in advance)
• Status:
a) PO Pending: This status shows PO is created but not authorized
b) Approved by Retail:
c) Approved by vendor: PO is created and approved by vendor
d) PO Partially Completed: This shows some of the items have been inbounded and
remaining are pending
e) PO Cancelled: This status shows PO created initially but it has been cancelled.
f) PO Rejected by Vendor: PO is created but rejected by Vendor
g) PO Closed: This shows that all the items are completely inbounded.
Items of ‘PO Closed’ and ‘PO Partially Completed’ only inbounded in inventory.
Supplier Portal
Supplier Accepting/Rejecting/Editing PO
Supplier Accepting/Rejecting/Editing PO
Supplier Accepting/Rejecting/Editing SKU’s
in pending PO
Supplier Accepting/Rejecting/Editing SKU’s
in pending PO
Supplier Accepting/Rejecting/Editing SKU’s
in pending PO
Viewing PO Status For Retail Teams
State Machine For PO
Return order Creation
Adding Return Orders
Adding Return Orders
Adding Return Orders
Adding Return Orders
Adding Return Orders
Return Orders
• All the Return Orders will be created in Retail System by the
Commercial team.
• Types of RO:
1. Normal Return: It is created when the items returned to supplier
2. Scrap Returns (For Damaged Items): It is created when the item is damaged
and we need to write-off.
3. Sold Offline: It is created only for removing items from inventory in case of
sold offline. It needs to be excluded when working vendor payable.
• RO Number in Retail System will be the same as that in ERP.
• Only Normal return order considered for settling and reconciling the
invoice.
Reconciliation & Invoicing
Invoicing (Summary)
• The VM is responsible for sharing the vendor invoice along with
PO
• All the invoices are directly recorded manually into the ERP
• Once payment is processed, Payment team provides either IBFT
Number or Cheque.
• VMs are informed about payment
Reconciliation on PO and invoice
• Select the provided PO in Retail System for which invoice has been received.
• Check the status of PO. It must be ‘PO closed’ or ‘PO Partially Completed’
• Item inbounded as per Retail System PO are compared with invoice whether
quantities are matching
• If quantities are matching compare the total cost of all items invoiced with
concerned PO of that invoice. If difference still exist than proceed to next step
otherwise end here.
• Per unit item cost needs to be compared with invoice and highlight any
difference in per unit cost.
• Any costing difference needs to be highlighted with VMs.
Syncing issues between retail system
and ERP.

• Data from Retail System will be synced to ERP.

• ERP team will look into Syncing Issues
Key differences (Old Vs New System)

• No UID, only SKU.

• Good Quantity Received Status
• Defective Quantity Received Status
• No inbounding/received date available
RETAIL RECONCILIATION
Retail reconciliation overview

• Search Relevant PO Data from Retail System

• Take PO export from Retail System
• Take the Invoice
• Reconcile these two documents
Inbounding
• All goods received information will be initially recorded in Dabao System.
Dabao will automatically update in Retail System:

• PO Report is exported from Retail System which contains all the details
regarding PO. PO Export

• Moreover, PO Number in Retail System will be the same as that in ERP.

Invoicing

• Vendors/ Vendor mangers provides the invoice along with the PO

and complete Bank details to Finance Department
• All the invoices are directly recorded manually into the ERP
• Invoices are only provided when items have been inbounded
• For some sellers, advance payment can be processed (only if we
have contract with them).
PO To Invoice Reconciliation Steps

• Only the PO whose status is ‘PO Closed’ in Retail System, they will be processed for
payment only.
• Retail System PO will be reconciled with Invoice (quantity inbounded and PO cost)
• Retail System PO will be reconciled with ERP Qty Inbounded and cost (for difference,
coordinate with ERP Team)
• Margin of error for Invoice Value is 5% and for Invoice Quantity is Zero.
• In case of discrepancies in QTY, the issue is communicated to commercial team for the
resolution.
• Commercial team coordinate with WHS team and supplier to resolve the quantity issue.
• In case of discrepancy in tax calculation our finance team coordinate with the supplier’s
finance team and resolved the issue.
ERP to retail system reconciliation
• If the quantity is not completely inbounded and uploaded in ERP. The ERP will not
highlight this.
• Pathway to open PO in ERP for Reconciliation:
ERP Modules Accounts Payables  Pending vendor invoice  New

• Enter PO of invoice in purchase order column and extract the data of PO in excel for
reconciliation process.

• ERP System’s PO will be reconciled with Retail System (Items Qty and Items Cost)
• In case of any discrepancies, ticket for discrepancy will be raised to ERP team.
ERP recording process (Normal Invoice)

Normal invoice is a request for payment by way of an invoice sent after delivery.

• At the time of inbounding of items, Retail System sends

inbounding message to ERP. At this stage ERP records following
accounting entry at backend (automatically).
INBOUND INVENTORY ACCRUAL DR
AP TRADE NON-GROUP NATIONAL CR
ERP recording process (Normal Invoice)

• Pathway to process the invoice: ERP SYSTEM  MODULES

 ACCOUNTS PAYABLES  INVOICES  PENDING
VENDOR INVOICES
ERP recording process (Normal Invoice)

• After opening the window of ‘Pending Vendor Invoice’ Click

‘NEW’ to process the new invoice.
• ‘Pending Vendor Invoices’ screen also shows the pending invoices
list, which are processed but not yet posted.
ERP recording process (Normal Invoice)

• To process the invoice, we have to record the following detail of

requested invoice in ‘Pending Vendor Invoice’ of ERP.
 Invoice no: In this field record the Invoice no mentioned in the received invoice. After posting, system (ERP)
will automatically associate the invoice no with the PO entered for this invoice.
 Invoice description: In this field record the period from which requested invoice pertains.
 Invoice date: In this field record the date of processing. Avoid to enter the invoice date which is mentioned in
the invoice because if it’s pertains to previous months system will not accept that date. Therefore to uniform
all entry record the processing date.
ERP recording process (Normal Invoice)

 Purchase order no: In this field enter the PO pertains to the received invoice. In this field one or multiple Pos
can be selected for one invoice. System (ERP) will not allow to select the PO which has already been invoiced
(Posted) or processed, this control is placed to avoid the duplicate payment against the same PO. For all
Return order system will show the amount in negative value.
 Vendor Account: In this field vendor code needs to be entered that has been assigned by ERP. It can also be
automatically load up by ERP, if we enters the PO first.
ERP recording process (Normal Invoice)
ERP recording process (Normal Invoice)

• After processing the invoice in ERP. Senior staff will review and post the processed
invoice.
• After posting the invoice in ERP. Following accounting entries passed in backend
(automatically) by ERP.

FASHION/ High Tech / General Merchandise DR

INBOUND INVENTORY ACCRUAL CR

AP TRADE NON-GROUP NATIONAL DR

ABC (Specific Vendor Account)CR
ERP recording process (Advance
Invoice)
Advance invoice is a request for advance payment by way of an invoice sent before delivery.

• Pathway to record the advance for retail payment: ERP 

Modules  Accounts Payables  Invoices  Invoice Journal.
ERP recording process (Advance
Invoice)

• In the window of Invoice Journal click ‘NEW’ to record new

advance afterwards enter ‘INV JRN’ at name field.
• After that click Journal batch number to record the entry of
Advance.
ERP recording process (Advance
Invoice)
• To process the advance, we have to record the following detail of
requested advance in ‘Invoice Journal’ (ERP).
 Date: In this field record the current date, at which the advance is processing.
 Account Type. This field represent the type of account, select ledger in this field
 Account: In this field select Advance Ledger (i.e. Merchandise Prepayment) in ‘Main Field’, DarazPK in
‘Business unit’ field and vendor code in ‘Vendor’ Field
ERP recording process (Advance
Invoice)
 Invoice Date: In this field record the date mentioned in the invoice.
 Invoice. Record the invoice no in this field
 Description: In this field record the detail of advance.
 Debit: Record inclusive amount in this field
 Offset Account Type: This field represent the type of offset account ,
select vendor in this field.
 Offset Account: Select the Vendor code in this field.
 Sales Tax Group: Input Tax category of Vendor (for e.g. Distributor, manufacturer. etc.)
ERP recording process (Advance
Invoice)

 Item Sales Tax Group: Record the GST rate of goods and services.
• Sales Tax: This window shows the amount of sales tax. This
amount is automatically calculated by ERP.
ERP recording process (Advance
Invoice)

• At the time of advance, billing dept will record the following accounting entry.

MERCHANDISE PREPAYMENT DR
ACCOUNTS PAYABLE CR
•At the time of settlement of advance, billing dept will record the following accounting
entry and post the PO with invoice in ‘Pending Vendor Invoice’.

ACCOUNTS PAYABLE DR
MERCHANDISE PREPAYMENT CR
Bank Details

• Bank details are provided by their relevant Vendor Managers at

the time of payment request.
• Billing Team will verify completeness and accuracy of ‘Bank
Account Number’ and ‘Account Tile’ for all new vendors.
• After verification ‘Billing Team’ will add the bank details vendor
wise in a separate master bank file for future verifications.
• Billing Team can accept the changes in bank details of supplier, if
it is satisfying the legal and tax compliances.
Payout to vendor

• Once the invoice has been posted or advance recorded. Billing

Team will submit hard copy of legal details (i.e. Tax Status) along with
invoice to Payment Team.

• Payment team will process payment and will provide IBFT

Number, Deposit Slip or Cheque
Types of payments

• Cheque: Cheques deposits into the vendors bank account directly by

‘Billing Team’ and the scan copy of deposit slips forwarded to the
relevant Vendor Manager.

• IBFT (Inter Bank Funds Transfer): In IBFT payment is directly

transferred to the Vendor’s Bank account by Payments Team and
transaction number subsequently shared with their relevant vendor
managers via ‘Billing Team’
RETAIL TAXES
SKU level tax
• All the input Taxes will be on SKU level at each vendor level
• All SKUs will be created by Commercial Team
• All the SKU will be created at ASC and will be interfaced into
Retail System in every half hour
Tax assignment in retail system
• Pathway: Retail System Products Manage Products. Following
Window will Open:
Tax assignment in retail system
• Click on relevant SKU. Following Window will open.

• Input Tax needs to be entered.

• Its is Mandatory to assign a Supplier as well
Tax SKU based on supplier tax group
• Tax Groups include:
a) Manufacturer
b) Retailer
c) Importer
d) Unregistered
e) Etc.
• Multiple Suppliers can be assigned to a single SKU.
Tax rate on PO
• When a particular SKU is used in PO, its relevant tax rate is assigned on the
PO automatically. Tax rate with categories shared by tax team.
Tax rate on PO
• When PO is exported, it shows VAT details as well:

• Export File is attached:

Output tax for retail items
• All the output VAT will be maintained in ERP
• A table is prepared in ERP MS Dynamics that contains item categories. In
that particular table, output VAT rates will be applied against each category
which is shared by tax team.
• Tax team is responsible to provide the updated tax rate to ERP in case of any
changes in rates.
• Whenever an order is placed, it will be synced from OFC system to ERP
system and on the basis of item categories, it will fetch Output VAT rate from
that particular table.
• Tax Team is responsible to tie the tax balance at the end of each month.
Retail Inventory
Inventory reconciliation

• Inventory reconciliation is done by performing two activities.

• The first process is to reconcile all the Pos & Ros created during the month
in ‘Retail System’ must reflect in the ERP with their quantities.
• Secondly, the total quantity available in ‘DABAO’ must match with the total
quantity in ERP.
Inventory reconciliation (Retail to ERP)
• Download all Purchase Orders and Return Orders from Retail System.
Inventory reconciliation (Retail to ERP)
• Remove all Pos and Ros pertains to previous months.

• Combine both PO and RO files and make a pivot PO number wise.

Inventory reconciliation (Retail to ERP)
• Extract all Pos and Ros from ERP.
• Pathway to download ERP report.
ERP Modules Procurement and sourcing
Transaction Report Purchase receiving Log.
Inventory reconciliation (Retail to ERP)
• Compare both files Pos number, supplier name and their quantity.
• In case of any discrepancy in Purchase receiving log, create a ticket to ERP.

• When the Pos & Ros inbounded in ERP, initially all reflects in Inbound
inventory accrual account. At the time of invoicing ERP automatically
transfer those Pos to relevant category (Like: Fashion, General merchandise,
etc.)
Inventory reconciliation (Retail to ERP)
• In DABAO Inventory is calculated as follows.
• + Opening Inventory
• + Purchases (Purchase orders during the month)
• - Return to suppliers (RO during the month)
• - Return Scrap (RO during the month)
• - Sold offline (RO during the month)
• - Virtually removed (RO during the month)
• - Sales (During the month)
• + Return to warehouse (Items returned by customer - RTW from RMS)
• -3PL Lost (Lost by third-party logistics)
• -Shipped (items shipped but not delivered)
• In case of delivery failed, items are not re-inbounded by PO, Dabao creates
an inbound order for this case
Inventory reconciliation (Retail to ERP)
• First extract the report of closing inventory from ‘DABAO’ by filtering
Daraz Retail Center.
• Dabao report shows only quantity of SKUs but not their cost. The cost of
particular SKU can be found on retail system.
Inventory reconciliation (Retail to ERP)
• Extract the inventory aging report from ERP and make a pivot sku wise.
• Pathway of ERP report:
ERP Modules Inventory Management Inventory Aging
Inventory reconciliation (Retail to ERP)

• Compare both files quantity SKU wise.

• In case of any discrepancy, Coordinate with ERP and
resolve the issue by passing inventory adjustment entry.