Procure and purchase Part II of II

August 16th, 2019

Procurement is the same thing as purchasing - right?

 

 

 

Today’s Post is by Eli Razov, Senior Account Manager at SafeSourcing Inc.

In part I of todays post we discussed our process. Today we discuss the purchasing process

The Purchasing Process

Purchasing is just part of the entire process. Think of it as the final piece to the puzzle. You have figured out what you want, who to get it from, what they will charge you, and now you just need to obtain that good or service. The simplified steps to that final piece can be seen below:

  • Purchase Order Acknowledgement
  • Advance Shipment Notice
  • Goods Receipt
  • Invoice Recording
  • 3-Way Match
  • Payment to Supplier

Often times companies will allow the General Manager or head of that location decide on where to go for what is needed. This can increase costs up to three times more than if the company combined its buying power. This can also be avoided by implementing the procurement methods explained above.

Because purchasing is part of the procurement process, both procurement and purchasing are often used interchangeably. In the business world, the practice of using similar terminology in either conversation or printed materials is routine, although it is often confusing and should be avoided.

Purchasing:

The activity of acquiring goods or services to accomplish the goals of an organization.

The major objectives of purchasing are to maintain the quality and value of a company’s products, minimize cash tied-up in inventory, maintain the flow of inputs to maintain the flow of outputs, and strengthen the organization’s competitive position.

Procurement:

The act of obtaining or buying goods and services. The process includes preparation and processing of a demand as well as the end receipt and approval of payment.

For more information on how SafeSourcing can assist you or on our “Risk Free” trial program, please contact SafeSourcing  we have an entire team waiting to assist you today.

Citation and References:

  • http://www.businessdictionary.com/definition/purchasing.html
  • http://www.businessdictionary.com/definition/procurement.html

 

 

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