Procurement Overview
- Procurement is the process of purchasing goods, materials, or services
- It is typically done through a purchasing organization, department or individual via an agreement with a vendor or supplier
- Terms are negotiated including price, payment terms, delivery time, and what penalties are built in should any of these be violated
- Purchase Requisition – employee has a need, completes purchase requisition, and submits to purchasing department.
- Request for Quotation – Purchasing department invites quotation from sourcing vendors listing terms, conditions, pricing, and delivery date
- Quotation – Sourcing vendor(s) submit quotation with their willingness and ability to meet said demand.
- Outline Agreement – Binding agreement that buying party is going to purchase specified
- Purchase Order – This is a legal contract between the buyer and the supplier.
- Goods Received – Supplier ships materials, goods or renders services.
- Invoice Verification – Invoice is measured against goods or services and matched to purchase order.
- Payment – Finally, the supplier is paid for the settlement of the contracted arrangement.
