Your six-step guide to a purchasing process:
Identify your needs (goods or services)
First, identify what your organisation needs or what you typically buy to define the business requirements. Once you understand what each department purchases or needs, you can work towards understanding costs, and where you'll be able to save, based on consolidating purchasing and choosing one supplier. For example, employees from different departments might be buying the same products from different suppliers, so you can consolidate this buying function with one supplier and negotiate a discounted rate.
Create your purchase requisition
A purchase requisition is an "application" for when anyone in your organisation wants to make a purchase. A requisition can be created automatically or manually depending on your company. However, an online P2P system can automatically generate a purchasing request from a supplier catalog in your system, route to the appropriate approvers(s), and create a purchase order from the approved purchase requisition. eProcurement
streamlines the entire process, saving you time and money right from the start.
Below are six tips for creating a purchase requisition when a supplier is not under contract:
Create your purchase order
- Create a list of suppliers.
- Perform a full analysis of each supplier and weigh them by the importance of your needs.
- Qualify and choose the best fitting supplier.
- Negotiate price.
- Determine if you need a contract.
- Measure supplier performance.
Once the requisition is approved, you can create your purchase order. The PO outlines specifications, such as order description, quantity of items, and agreed price and payment terms. You will also want to generate a PO number, which is vital to the entire process. Verified and approved purchase orders are then sent to the appropriate vendor. With a P2P system,
this is done automatically without emailing a staff member. This notification to the vendors lets them know you are looking to procure either a product or service from them.
Receive goods receipt
Keeping track of what has been shipped or received is extremely important. This allows you to review the delivered goods and services for quantity and quality assurance. And remember that PO number? Match the PO number to the packing slip, so you ensure the correct order is received. You can automatically do this with systems such as Proactis Rego.
Receive invoice and three-way matching
One of the most important things when managing your purchase order process is receiving the invoice from the supplier - and ensuring the supplier included the PO number. Since you've already matched the PO number to the goods receipt, you can now match the number to the invoice. When matching all three, Accounts Payable is protected and prevents duplicate payments, overpaying or underpaying, and potential fraud...