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Material Purchasing And Receiving Procedures

Purchasing of materials involves a number of steps, which may be different from one company to another. Generally, following steps are involved in purchasing and receiving materials.
1. Purchase Requisition
A purchase requisition is a formal request initiated by the store-keeper. The purchase requisition can also be initiated by other departments for purchase of special items not normally stocked. With the help of purchase requisition, the purchase manager comes to know the types of materials required for different departments. Generally, printed forms are used for this purpose. It is prepared in three copies. Each of the three copies is sent to the purchasing department, initiating department and accounting department respectively. Only an authorized person should sign a purchase requisition.
Purchase requisition has three purposes
* To inform purchasing department of the need to purchase materials.
* To fix the responsibility of the department making the purchase requisition.
* To use for further reference.
2.Request For Quotations Or Tenders
After receiving a purchase requisition, the next step of purchase procedure is to find the convenient and economical sources of supply. The purchase department must maintain a list of suppliers. Selection of a particular supplier is usually made after inviting tenders or quotations from possible sources of supply. Invitations for tender in a prescribed format are sent to prospective suppliers. It contains detailed information about the availability of goods, price of materials and terms and conditions of purchasing. Tenders are received in sealed covers before the due date expires and are opened on the date fixed for the purpose.
3. Purchase Order
After completion of the above procedure, the purchase department prepares a purchase order for the supply of materials. The purchase order is a contractual agreement with the supplier for the supply of materials. Purchase order is prepared in five copies, the original copy is sent to the supplier, the second copy for receiving department, third for account department, fourth for initiating department and fifth one is retained in the purchasing department for reference.
4. Receiving And Inspecting Materials
The receiving department should perform the function of unloading and receiving of materials dispatched by the supplier. The receiving department verifies the materials with the help of a delivery note and the copy of the purchase order after receiving the delivery of goods. The supplier sends detailed information and an invoice of the materials supplied by it. It has to verify and check the quantity and physical condition of materials by making a comparison of the purchase order and the materials received.
5.Checking And Passing Bills For Payment
When the invoices are received from the supplier, they are sent to the store and accounting departments for the verification of the quality and price of materials mentioned in the invoices. After checking the required documents, the store department requests the accounting department for making the payment of the invoice to the supplier.

3 comments:

Sandy Sharma said...

This post is very nice, Because your post is giving very nice information. So we are very thankful to you.

Ogunwale Adekunle said...

The contents of the write up is very understandable. Keep it up. Please i need informations on Goods Recieved Notes and Store Issue Voucher. Thanks.

jagjivan said...

good , covered all work.

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