Basic Steps Involved in Procurement

Procurement

The process of obtaining good or services

There are several steps involved in procurement process

STEP 1. Requirement By Users

The goods or services that are required by users are raised in form of hard copy in
form of several forms such as purchase request form or indent forms.
Any Department th0P([[[[[[\at need material or good plus services will contact
procurement department

The above mentioned forms are forwarded by Head of Department then

approved by operational director through collaboration of procurement manager
and director Finance.
STEP. 2 Vendor Selection and Acquiring Quotation

The purchasing department takes responsibility for the vendor selection which is
an integral part of the procurement management process. The vendor selection is
a subsidiary process that allows clearly stating, defining and approving those
vendors which meet requirements of the procurement process. The buying
department is responsible for creating a list of potential suppliers and submitting
that list to the project manager in order to decide on the vendors in conference.
However, the ultimate decisions on the vendors cannot be made without vendor
selection criteria, so the purchase department in cooperation with the project
manager needs to develop and use such criteria.
Often vendor selection criteria vary between organizations; however, they need to
be identified and included as a component of the inventory management plan.
The criteria for vendor selection include the following:
 Delivery – an ability of the contractor to procure all required items within
desired delivery dates
 Quality of the procurement services – an ability of the contractor to provide
products with the expected quality
 Cost of the procurement services – a comparison of prices provided by several
contractors
 Past performance – records on the contractor’s procurement activities
undertaken in the past

A Request for Quotation (RfQ) is used when you plan to purchase

some products and you would like to receive a quote for those
products. In Odoo, the Request for Quotation is used to send your list of
desired products to your supplier. Once your supplier has answered
your request, you can choose to go ahead with the offer and purchase
or to turn down the offer.

STEP 3 Prepare CST and Financial evaluation

 STEP 4 Prepare Purchase Order
urchase order process flow
1. Create a purchase order.
2. Send out multiple requests for quotation(RFQ)
3. Analyse and select vendor.
4. Negotiate contract and send PO.
5. Receive goods/services.
6. Receive and check invoice (3-Way Matching)
7. Authorize invoice and pay vendor.
8. Record keeping.
1. PO Creation

2. Purchase Order Approval

3. PO Dispatch

4. Binding Contract

5. Goods Delivery

6. Three-way Matching

7. PO Closure

1. PO creation:
Purchase orders are created from approved purchase requisitions
2. Approval flow:
POs are approved after budget and document verification

3. PO dispatch:
Once approved, purchase orders are forwarded to the selected vendor

4. Binding contract:
A legally binding contract is invoked once the vendor accepts the PO

5. Goods delivery:
The vendor delivers goods, and the buyer does a quality check and notifies the sender in

case of defects

6. Three-Way matching:
Buyer performs three-way matching (with purchase request, PO, and invoice)

7. PO closure:
After PO matching, if there are no discrepancies, purchase orders are closed
STEP 5 ISSUE PURCHASE ORDER

Project
manager

Finance
HOD
Department

Company

Project manager hand over payment invoice to Finance department and finance
department in return gives pay bill slip . Project manager hand over complete
procurement financing to HOD
STEP 6 Delivery of Store

STEP 7 Inspection and Acceptance by user

Last step in procurement is inspection and acceptance of goods and

services by the user . User provide their feedback that either the good they

received were upto their standards or not.

Preparing Of Payment Note and issuance of Payment

Three documents must match when an invoice requests payment - the invoice itself, the

receiving document and the original purchase order. The agreement of these documents

provides confirmation from both the receiver and supplier. Any discrepancies must be resolved

before the recipient pays the bill. Usually, payment is made in the form of cash, check, bank

transfers, credit letters or other types of electronic transfers.

Record Maintenance
In the case of audits, the company must maintain proper records. These include purchase

records to verify any tax information and purchase orders to confirm warranty information.

Purchase records reference future purchases as well.

 7 Inspection and
Requirement by
Delivery of Store Acceptance by
User
user

2 Vendor Preparing Of
Selection and ISSUE PURCHASE Payment Note
Acquiring ORDER and issuance of
Quotation Payment

Prepare CST and

Prepare Purchase Record
Financial
Order Maintenance
evaluation