How To Get Maximum Benefit From Procurement Process

The procurement process varies from company to company based on its structure and size. But the following are the typical steps you can adopt to get the maximu…

The procurement process varies from company to company based on its structure and size. But the following are the typical steps you can adopt to get the maximum benefit from the procurement process.

1.  Identify The Needs

The procurement process starts with the generation of demand from any department of an organization. At this step, organizations identify the needs for that demand and assess the importance of the product including its quality requirements and specifications

This demand could be for the routine material or can be for a new item that is not used before in the organization. Usually, department heads send the needs to the inventory manager needs and if that product is not available in the stock.

They send to the procurement department or executives the request to start procurement for that product.

2.  Generate Purchase Request

After analyzing the need for any product or service, the inventory department generates a purchasing request. Usually, the procurement department receives this request, and financial controllers review it.

Upon accepting the purchase request, this request is automatically converted into a purchase order and forwarded to the procurement department to start the purchasing process.

In case the request is denied by the management. It returns to the person who generates it, along with the reason for rejection.

3.  Supplier Verification and Selection

It is the top priority of every organization to get quality goods and services at a minimal cost. That’s why the procurement department is essential in an organization.

After receiving the purchase request, they start getting quotations. Meanwhile, they begin the supplier verification process to know about the supplier’s reputation and capacity.

At this step, procurement managers have to make some significant decisions. They have to perform price negotiations, understand and manage the minimum order quantity, compare the quality with price from different suppliers, settle payment terms, and few others.

However, some organizations keep the catalog of suppliers and vendors ready for the procurement department to quickly find the best supplier, in a database for example.

4.  Order The Goods

After completing the negotiation and verification process, the order reaches the selected vendor or supplier.


Usually, the procurement department involves purchase staff at this stage. They contact the supplier and ensure the order’s acceptance and ensure the expected delivery date.

All the terms & conditions are available with the purchase order provided to the supplier plus the price and total amount. The purchase department remains in contact with the supplier until the goods arrive within the organization’s premises and have been verified for accuracy and completion of the Purchase Order.

Receive And Verify The Goods

On the delivery date, purchasing or warehousing personnel are responsible for receiving the goods and verifying the stock as per the purchase order.

They have to check the products in terms of quantity and quality. If any defect, they reject the entire shipment or can accept the partial delivery and mention delivery order’s flaw.

Usually, the purchasing department completes the verification process using a three-way verification process (“3 way match”).

For example, they can match the purchase order, packaging slips, and supplier invoices to ensure the correct delivery. It helps to detect any problem on the spot rather than creating a dispute later on.

5. Payment and Recordkeeping

After receiving and verifying the goods, purchasing personnel are responsible for arranging payment to a supplier as per decided terms and conditions.

Furthermore, the procurement department also manages the purchase and payment-related record keeping. They have to complete the voucher and all the supporting documents for accounting and tax purposes.


If anyone from the supply chain business wants to get the best benefits in the procurement process, then these six steps represent essential guidelines for the company.

How we help our Clients

The procurement process varies from company to company based on its structure and size. But
Technology has a revolutionary effect on different matters of our life. The commercial sector is
Foremost, what exactly is supply chain management? So, supply chain management is the whole series
Scroll to Top