Purchasing process

Purchasing process

Purchasing is the formal process of buying goods and services. The Purchasing Process can vary from one organization to another, but there are some common key elements.

The process usually starts with a 'Demand' or requirements[1] – this could be for a physical part (inventory) or a service. A requisition is generated, which details the requirements (in some cases providing a requirements speciation) which actions the procurement department. A Request for Proposal (RFP) or Request for Quotation (RFQ) is then raised. Suppliers send their quotations in response to the RFQ, and a review is undertaken where the best offer (typically based on price, availability and quality) is given the purchase order.

Purchase orders (PO) can be of various types[2], including:

  • Standard - a one time buy;
  • Planned - an agreement on a specific item at an approximate date; and
  • Blanket - an agreement on specific terms and conditions: date and quantity and amount are not specified.

Purchase Orders are normally accompanied by Terms and Conditions[3] which form the contractual agreement of the Transaction. The Supplier then delivers the products/service and the customer records the delivery (in some cases this goes through a Goods Inspection Process). An invoice is sent by the supplier which is cross-checked with the Purchase Order and Document which specifying that the goods received. The payment is made and transferred to GL.


  1. ^ Purchasing and Supply Chain Management Kenneth Lyons and Michael Gillingham ISBN027365764X
  2. ^ Purchasing Handbook: Standard Reference Book on Purchasing Policies, Practices, Procedures ... By George W. Aljian
  3. ^ Purchasing Process design

External links

Wikimedia Foundation. 2010.

Игры ⚽ Поможем решить контрольную работу

Look at other dictionaries:

  • Purchasing — refers to a business or organization attempting to acquire goods or services to accomplish the goals of the enterprise. Though there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly… …   Wikipedia

  • Purchasing management — articleissues article = y refimprove = November 2007 expand = November 2007Purchasing management is the management of purchasing process, and related aspects in an organization. Because of production companies purchase nowadays about 70% of their …   Wikipedia

  • Purchasing card — A purchasing card (also abbreviated as PCard or P Card) is a form of company charge card that allows goods and services to be procured without utilising a traditional purchasing process. In the UK, Purchasing Cards are usually referred to as… …   Wikipedia

  • Purchasing System — A method used by businesses to buy products and/or services. A purchasing system manages the entire acquisition process, from requisition, to purchase order, to product receipt, to payment. Purchasing systems are a key component of effective… …   Investment dictionary

  • purchasing officer — An employee of a manufacturer, who is responsible for purchasing the raw materials used in the manufacturing process. If these include raw materials that fluctuate in price, the purchasing officer has to show that the average purchase price for… …   Big dictionary of business and management

  • purchasing agent — An agent whose duties consist in purchasing supplies and materials needed in the operation of an industrial plant. Not a managing agent within the meaning of a statute concerning the service of process upon a foreign corporation. Anne: 113 ALR 78 …   Ballentine's law dictionary

  • Sales process — A sales process is a systematic approach for performing product or service sales. The reasons for having a sales process include seller and buyer risk management, standardized customer interaction in sales, and scalable revenue… …   Wikipedia

  • National Institute of Governmental Purchasing — The National Institute of Governmental Purchasing, Inc. Type Private, Non Profit Industry Public Procurement, Training Headquarters Herndon, VA Key people Rick Grimm, Chief Executive Officer Website …   Wikipedia

  • Group Purchasing Organization — In the United States, a group purchasing organization (or GPO) is an entity that leverages the purchasing power of a group of businesses to obtain discounts from vendors based on the collective buying power of the GPO members. Many GPOs are… …   Wikipedia

  • Business process — A business process or business method is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. It often can be visualized with a… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”