Today’s Journal QuestionToday’s Journal Question

►Why is it important to keep a Why is it important to keep a consistent inventory count? Why is consistent inventory count? Why is inventory important to ensure a inventory important to ensure a business will succeed?business will succeed?

Inventory Control #2Inventory Control #2

Purchasing ProcedurePurchasing Procedure

►Purchasing is the formal process of Purchasing is the formal process of buying goods and services for your buying goods and services for your business or organizationbusiness or organization

►These goods are then resold, used as These goods are then resold, used as raw materials or parts to manufacture raw materials or parts to manufacture other goods, or used up to run the other goods, or used up to run the businessbusiness

►The Purchasing Process can vary from The Purchasing Process can vary from one organization to another but there one organization to another but there are some key elements that are are some key elements that are common throughout common throughout

►The common elements areThe common elements are Step 1: RequisitioningStep 1: Requisitioning Step 2: QuotingStep 2: Quoting Step 3: OrderingStep 3: Ordering Step 4: ReceivingStep 4: Receiving

We’re out of Paper!We’re out of Paper!

►To exemplify the purchasing To exemplify the purchasing procedure we will work through the procedure we will work through the following examplefollowing example

Acme Accounting Firm is all out of printer Acme Accounting Firm is all out of printer and photocopy paper, how do they go and photocopy paper, how do they go about getting more?????about getting more?????

Step 1: RequisitioningStep 1: Requisitioning

►someone at Acme Accounting realizes someone at Acme Accounting realizes we need more paper.we need more paper.

►they put in a formal written they put in a formal written requestrequest for the paper to the Purchaser (the for the paper to the Purchaser (the person who does the purchasing at the person who does the purchasing at the business or organization)business or organization)

►Formal request is usually a business Formal request is usually a business form or memoform or memo

Step 2: Quoting (Quote)Step 2: Quoting (Quote)

►A quote is a request for a price from A quote is a request for a price from your suppliers for the object or service your suppliers for the object or service you want to purchaseyou want to purchase

►Your supplier will prepare the quote Your supplier will prepare the quote and send it to you. Then you can and send it to you. Then you can decide if you want to purchase from decide if you want to purchase from them or someone else them or someone else

►The quote will come as an official The quote will come as an official business formbusiness form

Step 3: OrderingStep 3: Ordering

►After you receive the quotes and you After you receive the quotes and you have chosen whom is going to be your have chosen whom is going to be your supplier, you order the productsupplier, you order the product

►Businesses order products with a Businesses order products with a business form called a P.O. – Purchase business form called a P.O. – Purchase OrderOrder

►Acme would sent a Purchase Order to Acme would sent a Purchase Order to the paper supplier they have chosen. the paper supplier they have chosen. (This is the official order)(This is the official order)

Step 4: ReceivingStep 4: Receiving

►The final step in the purchasing The final step in the purchasing procedure is to receive the goods.procedure is to receive the goods.

►This occurs when the goods are This occurs when the goods are delivered or when the service is delivered or when the service is performedperformed

► It is crucial that someone at the It is crucial that someone at the business ensures that the proper goods business ensures that the proper goods and amount were received by and amount were received by comparing it to the P.O.comparing it to the P.O.