MATERIAL PURCHASING PROCEDURES

Purchasing is the formal process of buying goods and services. The purchasing process can vary from one organization to another, but there are some common key elements.

The process usually starts with a demand or requirements this could be for a physical part (inventory) or a service. A requisition is generated, which details the requirements (in some cases providing a requirements speciation) which actions the procurement department. A request for proposal (RFP) or request for quotation (RFQ) is then raised. Suppliers send their quotations in response to the RFQ, and a review is undertaken where the best offer (typically based on price, availability and quality) is given the purchase order.

1. Presented By: Paras Joshi A presentation on MATERIAL PURCHASING PROCEDURES

2. Background & Origin Purchasing Procedure Diagram Purchasing Requisition Tenders or Quotations Purchase order Receiving and inspecting material Checking and passing of bills for payment Table of Contents

3. Background & Origin Material is one of the essential element of production. The term “material” refers to raw material. Purchasing involve acquiring materials of right quality in a right quantity at a reasonable price and at right time.  Material & Material Purchasing

4. P URCHASING PROCEDURE

5. Purchasing Requisition It is a formal request initiated by the store keeper or a specific department for the purchase of specific items. IT has three purposes which are as follows: To inform the purchasing department about the need to purchase a material. To fix the responsibility of the department making the purchase requisition. To use for future reference.

6. After receiving purchasing requisition, the purchasing department has to find the best source to purchase the material from. Selection of a particular supplier is made after inviting quotations or tenders from possible sources of supply. Invitations for tender in a prescribed form are sent to prospective suppliers. Tenders or Quotations

7. The purchase order is a contractual agreement with the supplier for the supply of materials. It is prepared in five copies. Purchase order

8. The receiving department should perform the function of unloading and receiving of materials dispatched by the suppliers. It has to verify and check the quantity and condition of materials by making comparison of the purchase order and the materials received. Receiving and inspecting materials

9. When the invoices are received from the supplier, they are sent to the stores and accounting department for verification. After the verification, the store department requests the accounting department to make the required payment to the supplier. Payment will be made according to the payment terms specified in the contract. Checking and Passing of Bill for Payment

10. It is the first process set by a manufacture to control materials. Material purchasing process may be different from one company to another. It starts with the issue of material requisition and ends with the receipt of materials and payment of the cost of materials. Conclusion

11. Thank you