Link to internal forms: Purchase orders, quote requests, and purchase requisition forms are all vital to procurement.Link to approved vendors: If you have an established relationship with a vendor, keep that information on hand for the future right within the flowchart.But it goes far beyond just tweaking the process. In our visual workspace, you can tweak the process in real time for greater efficiency. With Lucidchart, you can create your own customized procurement process flowchart with one of our templates. Procurement cycles are more easily understood through visuals. If the steps above are giving you some anxiety, don’t worry-we have a solution. Procurement is more complicated than just swiping a credit card. Consider everything from vendors to stakeholders to cost. When you think of the purchase, think of it in the context of your organization and in the procurement process. Purchasing is a part of procurement, but it’s just one step in seven. The seven steps above are much more complicated than hopping online and sending over your credit card for a new pair of leggings. What we’re referring to here is the documentation used in the procurement process. The third P is a bit of a misnomer because there’s often very little actual paper used these days. Following the process properly is vital to the health of procurement. If it’s not, vendors may not get paid on time, purchases may be delayed, and your company's bottom line could be at stake. Your organization’s process must be followed to complete the procurement. If you’re purchasing a $750,000 hand-blown glass chandelier, you’ll need more approval than you would for the purchase of seven new Photoshop licenses. You should also remember that the cost and risk of the purchase will determine how many people are likely to be involved. For instance, if one of the key decision makers is your CFO, and he’ll be in Hawaii for the next two weeks, you’ll need to consider that anomaly into your procurement cycle. This may seem obvious, but as you create your procurement process, remember to account for the busy schedules and complexities of the people involved. Your procurement process involves three main components. Make sure you’ve built in redundancy here you’ll likely be using a digital purchasing method, so it may benefit you to print out paper versions of documentation and store them in a secure place in case of a total electronic apocalypse. Keep for your recordsĪll steps above need to be documented for internal and external audits, so you’ll need a central location to store invoices, orders, and other accompanying documentation. Finance sends the payment over to the vendor in the preferred method of payment. PaymentĪfter you've received the goods or services, it’s time to pay your vendor. This is the last chance your organization has to change the request, so double-check both the invoice and the order for the correct items or services at the correct price. The vendor will also send over an order, which is another detailed description of the goods or services requested. The invoice will also give a deadline for payment, and you’ll need to submit payment before the deadline or else there may be a penalty (which is usually detailed in the invoice, as well). The invoice is a request for payment and gives a detailed breakdown of the cost. The vendor will then submit an invoice to the purchaser. If your company intends on ordering from this vendor long-term (or if your company relies on a lot of third-party suppliers in general), you may want to develop a supplier onboarding process to ensure both parties understand what's expected. That purchase order signals to the vendor that the purchase request has been approved and that they can proceed with the request.
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