Material Purchase Procedure.

Q18. Discuss material purchase procedure.
Ans. Following steps are taken for purchase of material:

  1.  Receiving Purchase Requisition: In a big organization, a separate department exist for purchase of goods which is called purchase department. All types of goods and stores is purchased by such department. Such system is called centralized purchasing system. When goods is required in stores, then store keeper fill up specified form and send it to the purchase department as formal request for purchase of goods. Search form is called purchase requisition note. It contain the quality, quantity of goods, department which requires material, date up to which material is required etc.
  2. Exploring and Selection of Material Supplier: On receipt of purchase requisition note, purchase department inform to the supplier of such material for quotation. On receipt of quotation, an analysis sheet is prepared. In analysis sheet, which are considered are price, quantity of material, quantity available, transportation cost, part credit policy etc. After analysis, one or more supplier are selected.
  3. Preparation and Execution of Purchase Order: Purchase Manager prepare and execute, purchase order to the supplier selected. Purchase order contain exact specification of material quality, price, date of delivery, transportation media etc.
  4. Receipt and Inspection of Material: After receipt of goods, receiving department check material for quantity, quality etc. with respect to purchase order is placed. After checking of goods, material note is prepared. If material is not agree with purchase order then goods maybe returned to supplier and material outward note is prepared.
  5. Checking and Passing of Bill of Payment: after checking of bill, store send the invoice of supplier to the account department for payment. In this way payment is made to supplier.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: