Download - MATERIAL PURCHASING PROCEDURES
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Prepared By:Paras Joshi
A presentation on
MATERIAL PURCHASING PROCEDURES
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Background & Origin Purchasing Procedure Diagram Purchasing Requisition Tenders or Quotations Purchase order Receiving and inspecting material Checking and passing of bills for payment
Table of Contents
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Background & Origin
Material is one of the essential element of production.
The term “material” refers to raw material.
Purchasing involve acquiring materials of right quality in a right quantity at a reasonable price and at right time.
Material & Material Purchasing
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Purchasing requisition
Tenders or quotation
Purchase orderReceiving and
inspecting materials
Checking and passing of bills
for payment
PURCHASING PROCEDURE
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Purchasing Requisition
It is a formal request initiated by the store keeper or a specific department for the purchase of specific items. IT has three purposes which are as follows:
To inform the purchasing department about the need to purchase a material.
To fix the responsibility of the department making the purchase requisition.
To use for future reference.
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After receiving purchasing requisition, the purchasing department has to find the best source to purchase the material from.
Selection of a particular supplier is made after inviting quotations or tenders from possible sources of supply.
Invitations for tender in a prescribed form are sent to prospective suppliers.
Tenders or Quotations
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The purchase order is a contractual agreement with the supplier for the supply of materials.
It is prepared in five copies.
Purchase order
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The receiving department should perform the function of unloading and receiving of materials dispatched by the suppliers.
It has to verify the quantity and condition of materials.
Receiving and inspecting materials
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When the invoices are received from the supplier, they are sent for verification.
After the verification, the store department requests the accounting department to make the payment to the supplier.
Payment will be made according to the terms specified in the contract.
Checking and Passing of Bill for Payment
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It is the first process set by a manufacture to control materials.
Material purchasing process may be different
from one company to another.
It starts with the issue of material requisition and ends with the receipt of materials and payment of the cost of materials.
Conclusion
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Thank you
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