Purchasing management is the management of purchasing process, and related aspects in an

organization. Because of production companies purchase nowadays about 70% of their turnover,
and service companies purchase approximately 40% of their turnover], purchasing management
is one of the most critical areas in the entire organization and needs intensive management.

Purchasing Process includes as usual 8 main stages as follows:

1. Requisitioning
2. Approving
3. Studying Market
4. Making Purchase Decision
5. Placing Orders
6. Receipting Goods and Services Received
7. Accounting Goods and Services
8. Receiving Invoices and Making Payment
9. Debit note in case of material defect

[edit] Purchasing Management Process

Purchasing Management Process consists usually of 3 stages:

1. Purchasing Planning
2. Purchasing Tracking
3. Purchasing Reporting

[edit] Purchasing Planning

Purchasing Planning may include steps as follows:

 creating purchasing projects and tasks

 providing related information (files, links, notes etc.)
 assigning purchasing tasks to employees
 setting task priorities, start/finish dates etc.
 assigning supervisors
 setting reminders
 control and evauation

[edit] Purchasing Tracking

Purchasing Tracking consists of:

 checking task's status and/or history of changes

 receiving status notifications
 sorting, grouping or filtering tasks by current status
  highlighting overdue tasks,,,

[edit] Purchasing Reporting

Purchasing Reporting includes:

 comparing actual and estimated values

 calculating purchasing task and project statistics
 sorting, grouping or filtering tasks by attributes
 creating charts to visualize key statistics and KPIs

Procurement Management
Increasing the Strategic Value of Purchasing

Manage your major suppliers actively.

© iStockphoto/kirstypargeter

Everyone buys things - groceries, clothes, transport services, housing.

When you're buying vegetables, you probably only spend a few seconds deciding what and
where to buy. After all, if you make a mistake and finish up with apples that rot in your fruit bowl
after a few days, the money you've wasted is insignificant. When you choose a new car, though,
you'll spend longer evaluating what you want, and you'll consider things like prices, and the
levels of after-sales service that different dealerships offer.

Procurement - buying goods and services at work - also demands a range of approaches
depending on the situation, although the decisions are usually bigger ones. What's more, since
it's someone else's money you're spending at work, you need to be more rigorous about
ensuring you've considered all the factors required to make a good purchasing decision. Who
do you use as a supplier? What kind of contract terms do you need? What constraints and
restrictions do you have on your purchasing power? And should you make something, or buy it
in?

Procuring - or purchasing - goods and services from external suppliers is a critical part of most
organizations. The materials and support provided by your suppliers are often key to their
organization's overall success. Therefore, it's good practice to manage the entire supply
acquisition process carefully to make sure you get what you want - and what you pay for.

Having a process in place allows you to manage the ordering, receipt, review, and approval of
items - and it sets up procedures for managing the supplier relationship. Doing this properly
helps you ensure that everything you buy is fit for purpose, and it helps you identify and resolve
issues quickly. Developing an effective procurement management process will help you
maximize the value of your supplier relationships - and safeguard and maximize the results of
your project.

Sure, this takes a lot of work. However, if you get procurement right you can drive down the
prices you pay for resources, at the same time that you protect yourself from all of the stress,
disruption, delay and cost that comes with unreliable suppliers or defective inputs.

By concentrating all purchase responsibility in one organization, it is possible to achieve

standardization to eliminate duplication of effort, and to lower prices as a result of volume
buying.  Such organization permits the hiring of people professionally trained in the business of
purchasing.  The vendors and the general public may thus look to one professional staff for
information and for assurance that the State's purchases are being handled properly and
economically.

An invoice is essentially a detailed bill left by vendors and outside suppliers for goods or services rendered to a company.
A typical invoice might list the quantity of each item, prices, billable hours, service description and a contact address for
payment. While some expenses may be paid out of a general fund or petty cash account, an invoice is usually paid through
an accounts payable department by the posted due date.

In the United States, a group purchasing organization (or GPO) is an entity that is created to
leverage the purchasing power of a group of businesses to obtain discounts from vendors based
on the collective buying power of the GPO members.

Many GPOs are funded by administrative fees that are paid by the vendors that GPOs oversee.
Some GPOs are funded by fees paid by the buying members. Some GPOs are funded by a
combination of both of these methods. These fees can be set as a percentage of the purchase or
set as an annual flat rate. Some GPOs set mandatory participation levels for their members, while
others are completely voluntary. Members participate based on their purchasing needs and their
level of confidence in what should be competitive pricing negotiated by their GPOs.