An example of a business purchasing procedure is one that starts with identification of a needed product and ends with the execution of a purchase order. An eight-step purchasing process frequently used by businesses consists of identifying the need, selecting a specific product, appointing a purchasing team, determining technical specifications, establishing a budget, researching potential suppliers, soliciting bids and awarding the business.Continue Reading
The eight-step purchasing process outlined creates an organized, informed process that results in the company purchasing the right product from a qualified supplier. Such processes save businesses a tremendous amount of money by ensuring that they buy the most durable product for the best price. Like consumers, businesses must balance cost with value, though in most business situations, striking this balance is complex and often requires the input of several departments.
Once a need is identified and a product selected, such as a certain type of mower for a lawn-care company, the purchase team is assembled to complete the remaining steps in the process. The team creates a list of required technical specifications and determines the budget based on the company's financial position and the team's research into the price range for the needed product. The team's goal is to find the most durable product for the best price, and heavy research into potential suppliers is required to successfully carry out this objective. The team weighs all competitive bids and awards the business based on what it believes to be the best value within the established budget.Learn more about Business Resources