What is procurement process | The Procurement Life

Welcome to The Procurement Life channel! Today, we're exploring Procurement Process
The procurement process is a series of steps or activities that an organization follows to acquire goods, service, or works from external suppliers or contracts. It involves various stages from identifying the need for procurement to the final delivery and payment for the acquired goods or services. Here are the typical step involved in the procurement process.
Let's discuss the step-by-step process of procurement.
Needs Recognition: This step involves identifying the goods, services, or works that are required to fulfil the organization's needs or objectives.
• Purchase Requisition: Once the needs are recognized, a formal request is made within the organization to initiate the procurement process. This request, known as a purchase requisition, specifies the details of what needs to be procured.
• Review of Request: The purchase requisition is reviewed by relevant stakeholders, such as managers or procurement officers, to ensure that it aligns with organizational goals and meets any necessary criteria or regulations.
• Negotiation and Contract: If necessary, negotiations may take place with potential vendors to finalize the terms and conditions of the contract, including pricing, delivery schedules, and other relevant terms.
• Quotation Requests: Requests for quotations (RFQs) may be sent out to potential vendors to solicit their proposals and pricing for the required goods or services.
• Budget Approval: Once quotations are received and negotiations are complete, budget approval is sought from the appropriate authority within the organization to ensure that funds are available for the procurement.
• Receive Goods/Services: Upon approval, the selected vendor delivers the goods or performs the services as specified in the contract.
• 3-Way Matching: This step involves comparing the purchase order, the goods received, and the vendor invoice to ensure that they all match in terms of quantity, quality, and price.
• Invoice Approval Payment: Once the goods or services are verified, the vendor's invoice is approved for payment according to the terms of the contract.
• Record Keeping: Finally, all relevant documentation related to the procurement process, including purchase orders, contracts, invoices, and payment records, is properly recorded and maintained for auditing and compliance purposes.
By following these steps systematically, organizations can effectively manage their procurement processes, ensuring timely acquisition of goods and services while adhering to budgetary constraints and quality standards.
Subscribe to The Procurement Life channel for more insights on procurement