A procurement process involves various steps, including value analysis, requirements determining, raising a purchase request, supplier research, contract administration, more. Automating the procurement process by the procurement subcontractors is the first and the foremost thing an organization should focus on. This aids in streamlining the cluttered procurement processes, thereby keeping them transparent. An efficient procurement process allows stakeholders to keep a check on every piece of information and ensures no information is lost. Before you automate the process, you need to look at the various stages involved in a procurement process. This context will shed light on the same. Read on to know the stages.
The first step involved in a procurement lifecycle is initiating business recognition needs. Business owners can structure an exact procurement plan for procuring services through this step, at a reasonable amount, and on time. In this step, procurement officers and functional managers look for analysis requirements, emergency justification forms, total cost finder, fact-finding agenda, and due diligence research. They also solve queries related to the existing contracts and check if they require special approval.
The next step in a procurement process involves the procurement team who look for the needs of internal customers. Based on their needs, the team members go for a purchase requisition process where electronic or written documents are raised. The requisition process comprises vital information regarding procuring the right services that work.
Review of requisition
In this step, the procurement team members will review the requisition process. It is only after the requisition process is reviewed, approved, and cross-checked, the procurement process will legally commence and budget requirements will be discussed. In this step, the functional heads will double-check the requested services and see if they require them. Also, the quality control freelancers will review the requisition package and check if the required funding is available. If the requisition package is rejected it will be sent back to the requisitioner and approved packages will become POs. There is a software named purchase order software that operates the enter requisition review process.
After reviewing the requisition process and approving the same, the functional managers will sketch out an accurate procurement plan and the corresponding solicitation process will be developed. The complexity of the procurement requirements will finally decide the solicitation plan. in this step, the procurement managers will arrange for documents that will involve a letter of invitation to the suppliers, a general information worksheet for suppliers, a market analysis worksheet, and a request for an information worksheet. The information gathered will help procurement heads proceed with the vendor shortlisting process. Then they can finally move on to requesting quotations from suppliers to compare the bids.
Assessment and contract
After closing the solicitation process officially, the procurement subcontractors will collaborate with the evaluation committee members. They will work together to review the suppliers’ quotations and eventually decide on selecting the vendor who fits best to fulfill the existing business requirements. In this step, the procurement officers will evaluate the RFQ negotiation process, evaluate the committee agenda, request for clarification, evaluate templates, offer contract terms, and review the summary sheet.
After the vendor acknowledges and accepts the PO, both parties can legally bind a contract and activate it.
After the final contract is signed, the vendors start with the product manufacturing process. A stipulated time is decided within which the vendor has to deliver the goods and services. After receiving the goods, the buyer evaluates the products and notifies the supplier of any problem related to the products. After ensuring that the product quality is good, the buyer will line up invoices, pinpoint discrepancies, if any, and ensures its accurate transaction to the supplier.
Approval of invoice and dispute analysis
After the three-way matching process is completed, the procurement officers approve the invoice and forward it to the payment process depending on the norms of the organization. In this step, the officers finalize documents, including the original vendor contract, dispute settlement form, arbitration documents, complaints registration, and settlement receipts. They will check if the service was delivered within the stipulated time, was the settlement handled properly, and if there were any dispute clauses.
With this step, the procurement process comes to an end. The quality control freelancers look after the quality of the products delivered and launches in the market. The buyers can keep a record of the payment process for auditing and bookkeeping. They can store the documents, starting from the purchase requests to the invoices slips, in a centralized position. Organizations can resolve the difficulties of a cluttered procurement process by following these procurement steps. They can use automated tools and technologies that are capable of straightening the procurement process. the procurement steps mentioned above coupled with automated tools can scale up your business and meet the requirements.