A company’s purchase process is directly related to its profits. Every business should keep a track of the items they purchase. Senior employees should closely monitor the purchase process to avoid additional expenditure. Maintain a list of what is being purchased, how much is spent and for what purpose. It is an art to manage purchase process. Unnecessary purchases can lead to loss and debts. Appoint a person to head the purchase process. They should have a good grip over purchasing procedures and purchasing processes.

Q. Do you want to improve your purchase process?
Q. Are you facing difficulties in managing it?

Here are some tips to manage the purchase process:

Identify the requirements

Make a list of the products required to purchase. Purchase only when necessary. Do not purchase products in advance. Purchase fewer products, if they change constantly. Calculate the expenditure required for the purchase process. Check for the life span of the products.

Purchase Head / Team

Appoint a purchase head for your company. He/she should finalize the list of products required to purchase. The purchase team should work towards minimizing expenditure. Always work out the purchase budget for a year. Do not forget to negotiate with the vendor to reduce the cost. Don’t be harsh with them. Be polite to bag a good deal. Purchase in bulk when required. Bulk purchase reduces the cost. Closely monitor the budget to avoid excess expenditure. The purchase order or bill should be signed by the vendor and the buyer.

Closing the purchase order

Find out the existing product prices in the market. The lesser the price, more you save. But, do check for the quality of the product. Senior members should carefully check the invoice. Bill should contain company name, place, date, price, etc. Go through the terms and conditions. The product should have a warranty period. Discuss the terms and conditions before purchasing an item. Retain the invoice to avoid problems in the future. Ask for replacement, if the product is damaged. Apart from the bill / invoice ask for a purchase order. A purchase order should include: order number, vendor name and address, shipping information, delivery date, date of the order placed, etc. Purchase order is different from invoice / bill. It’s good to have both.

Keep a track of the purchases

Maintain a record of the purchases done. Retain all original copies of purchase orders, confirmations, cancellations requests and confirmations. Save all the bills for further use. Dispose bills, only when you dispose the product. Bills act as proof, so don’t lose them. Also maintain the list of vendors for particular products and their prices for easy access. It saves time and promises quality.

Entrepreneurial Learning

Purchase process is the biggest task for any company. Appoint senior employees to handle the purchase process. Experience helps in handling the purchase orders efficiently. Make a list of all the requirements. Purchase accordingly, do not buy in excess. Retain all the receipts of the purchase orders with you.

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