Shopping, as a function, is something thatthat no company can avoid. the organizations They need to acquire various products and services to maintain their business and to obtain advantages. They need to work with the best suppliers, paying the lowest possible price.
When the purchasing sector se It is strategic, contributes to the company's growth and to achieving tactical and strategic objectives, and can deliver more value to the business as a whole. But what defines a good purchasing process?
A purchasing process involves a series of steps that help a company identify opportunities to acquire goods and services that contribute to its business strategy. This process has a direct impact on costs, so an effective purchasing management system is a solution that helps you make purchases more intelligently.
In addition to achieving cost reduction objectives, efficient purchasing processes help improve performance, compliance, risk and contract management, and supplier management.
7 steps to an effective purchasing process
- Identify the requirement of goods and services of all business units
The purchasing cycle begins when a department or branch needs to obtain goods or services from an external supplier. Therefore, the first step in the process consists of identifying and consolidating the requirements of all the company's business units. - Identify and evaluate suppliers
Identifying a list of potential suppliers for the supply of goods or services is the next step. This involves web research and measures such as RFP, RFQ and RFI with the aim of evaluating suppliers according to pre-established metrics. - negotiate contracts
Once the supplier has been selected, the contracting process begins. This process involves analyzing the pricing structure, scope of work, terms and conditions, delivery times, etc. - Issue a requisition and release the order
After finalizing the contract with a supplier, the company issues a purchase requisition, which includes a description of the good or service, price, quantity, supplier information and the approval process. Once approved, the finance department releases the purchase order to the supplier, who documents the information. - payment process
Once the supplier receives the order, they send an invoice with the value of the goods or services requested. Once the invoice is paid, the purchasing department is responsible for ensuring the quantity and quality of what was contracted. - Receive and audit the delivery
Based on what was agreed in the contract, the supplier delivers the goods or services and the company must audit what was delivered to ensure that the suppliers meet quality expectations. - Contract and invoice records
Once you receive your products or services, it is best practice to effectively store the contract and all invoices to track spending and expense categories.
The purchasing department has already begun its journey to become more strategic for the company. Therefore, its goal is to help design a well-structured and effective purchasing process.
COSTDRIVERS helps your company optimize the time of your negotiations to achieve greater cost reduction and increase performance. Contact us and find out how we can help your company.
