Purchase Management
Purchase Management is a process of managing the whole purchase and related activities in an organization. The purchasing of an organization is highly depends on the re order level of the stocks for the further process of business activities. In the case of manufacturing companies the purchase is about 70 percent of the turn over of the business but in the case of service organizations it is limited to 40 percent of the turn over of the company.
Process or Steps involved in the purchasing
Basically the purchase management process involves three major things such as (1) Purchasing planning (2) Purchasing Tracking and (3) Purchasing Reporting. the major process involved in the Purchasing are as follow:-
1. Purchase requisition
The process of purchasing is stars when the purchase requisitions are generated from the internal organizations. This is the indication of the managers that there is an urgent need of purchasing of goods and services in an organization.
2. Study of Market
The main process of purchasing is depends on the market trends and technologies for a particular product or services. The study of market and trends leads to the decision regarding the purchase of the goods and services.
3. Making Purchase decision.
After the selection of a particular market the next process is to take the purchase decision for the particular concern. This is done through the effective analysis of quotations from different companies.
4. Placing orders
After the finalization of the particular company with the analysis, the purchase order will be placed to the proposed company.
5. Receipting goods and services received
The placing of an order is the final decision for the purchase of goods and services in the company. After the placing the next step is to the receipt of the same. This will happen the effectively only after the continous follow up activity.
6. Accounting goods and services.
After the receipt of the goods and services it is necessary to account the number of items received in the organization. This is the main duty of the store keeper under the guidance of the accountant in the concerned organization.
7. Receiving invoice and making payments
The receiving of invoice and making payments are the responsibility of the accountant. This will be happen only after the verification of goods and services along with the invoice received.
8. Debit note incase of any defects in products.
Every organization is liable to pay the bills immediately after the receipt of items ordered. If there is any damaged goods they can return the goods and can be avail of the reduction of the value of money along with the invoice received.
These all are the process involved in the purchasing management of an organization.
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