For the shopaholics out there, the procurement process is more like a dream come true! We say this because the procurement process imparts one with the vibes of shopping with the money of someone else. Although the feeling is quite right to hold on to, the procurement process is much more than what meets the eye. This provides an accurate, effective, fast, easy, and reliable experience for online shopping.
Here, we have listed the 5 required steps involved in the procurement process flow.
1. Need for identification
- : Identification of needs of the person is the very first step of the Procurement Process Flow, and the action is initiated only when a person submits a request to the purchasing department. The application can be of any form ranging from a license for a new software launch in the market to buying a new office. The request submitted should be with complete details and in black and white. This request is examined to identify the need of the person.
2. Selection of the Vendor
- : After identification of need, the department has to select a vendor according to the need. The Procurement Department, such as Ivalua, will investigate the vendors. They will ask for quotes from different dealers and select the one that caters to all the deals. The selection of the vendor is one of the most crucial steps because this process involves cost, reputation, dependability, and speed of service before the final decision is taken.
3. A purchase requisition must be submitted
- : After the vendor has been selected, it’s time to seek approval for placing the purchase order. But, this approval needs to be in writing. Some of the details that you need to provide along with the purchase order are:
- The professional and personal, both details of the party that is requesting the service or item
- The requirement of the service or article should be provided with details of the quantity as well
- Information about the Vendor
- The exact price imposed
4. Purchase order to be generated
- : Once the purchase request is approved, a purchase order shall be issued to the vendor from the finance department. This purchase order acts as a signal to the vendor that the order has been approved, and so the vendor can now move ahead with the request made.
If your company intends to make a purchase from the same vendor or generally relies upon third-party suppliers, you may want to think of issuing a Supplier Onboarding Process with someone such as Ivalua, which will ensure that both the parties have understood, what is expected of them.
5. Order and Invoice
- : The final step is when the vendor will submit his invoice to the one who is making the purchase. The invoice is generally is a payment request and provides a breakdown of the price imposed on the products. The invoice will also provide details of the payment’s deadline. Also, the invoice can include the modes of payment that the buyer can select. The vendor will also issue an order, which will provide details of the services or the goods that have been requested to be purchased.
If your organization wants to make any of the changes in the order placed, you can do it now. Therefore, make sure to double-check the order and invoice for the correct service/items at the fair price.
Once you finish all the steps, you have to wait to get the goods. Once the service has been provided or the goods have been received, you must make the payment to the vendor. Now the finance department of your organization must take over to dispose of the payment to the vendor in their desired method.
Documentation during whole is mandatory for all people involved in the process such as buyer, seller, and vendor. The companies dealing with the Procurement Process Flow such as Ivalua say that you must maintain all your records for external as well as for internal audits. Therefore, all the documentation involved such as the order, invoice, and any other documents must be stored in a central location. Make sure to adopt the method of redundancy here, which will undoubtedly prove to be helpful when there is any form of an electronic apocalypse.
The procurement process flow is much more complicated than just making use of your cards to buy a pair of denim online. Although purchasing is the soul part of the procurement process, there are several other steps involved as well. When you are thinking of a purchase, you will have to think of it from the perspective of your company or in the process of procurement.