Purchasing Requirements
PURCHASING REQUIREMENTS
1. Introduction
The purpose of this document is to outline the comprehensive purchasing requirements for our company, ensuring all procurement activities are conducted efficiently and effectively. This document includes detailed criteria, policies, and procedures designed to maintain consistent quality, manage costs, and ensure compliance with applicable regulations. By adhering to these requirements, we aim to achieve optimal value in our purchasing activities while minimizing associated risks.
2. Definitions
2.1 Purchase Requisition
A formal request initiated by a department or team within the organization authorizing the procurement of goods or services.
2.2 Purchase Order
A legal document issued by the purchasing department to a vendor or supplier, detailing the types, quantities, and agreed prices for products or services.
3. Policy Overview
All purchasing activities must comply with the established policies and guidelines to ensure the organization achieves the best value while mitigating risks. All purchases must be necessary, justified, and aligned with budget allocations.
4.Approval Workflow
4.1 Requisition Submission
All purchase requisitions must be submitted through the official procurement system. The submission should include the following details:
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Item Description
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Quantity
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Estimated Cost
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Department Code
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Justification for Purchase
4.2 Approval Hierarchy
The approval process must follow the predefined hierarchy to ensure accountability and transparency. The steps include:
|
Step |
Approver |
Action |
|---|---|---|
|
1 |
Department Head |
Review and Approval |
|
2 |
Budget Officer |
Budget Check and Approval |
|
3 |
Purchasing Manager |
Final Approval and Issue PO |
5. Vendor Selection Criteria
Vendors are selected based on the following criteria to ensure quality and cost-effectiveness:
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Price Competitiveness
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Quality of Products/Services
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Delivery Timeframe
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Reputation and References
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Compliance with Industry Standards
6. Purchase Execution
Upon approval, the purchasing manager will execute the purchase by issuing a purchase order to the selected vendor. The purchase order will include all necessary details to ensure the correct delivery of goods/services.
7. Receipt and Inspection
7.1 Delivery Acceptance
Upon receiving the goods/services, the receiving department must inspect the shipment for accuracy, quality, and completeness according to the purchase order.
7.2 Documentation
A receipt must be documented, and any discrepancies should be reported immediately to the purchasing department for resolution.
8. Payment Processing
Invoices received from vendors must be reviewed and matched with the purchase order and delivery receipt. Once verified, payments will be processed according to the agreed payment terms.
9. Record Keeping
All purchasing records, including requisitions, purchase orders, invoices, and delivery receipts, must be maintained for audit and compliance purposes for a minimum period of 7 years.
10. Compliance and Review
The purchasing department must regularly review and update the purchasing policies and requirements to adapt to organizational needs and regulatory changes. Regular audits must be conducted to ensure compliance with the established requirements.
