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What are the steps in procurement of material?
Following are the steps in procurement of material:
Purchase Requisition is an indication to the purchase department to purchase certain material required for the production. Following particulars appear in the purchase requisition
- Material to be purchased
- When it is required
- How much to be purchased
- Selection of Source of Supply
- Single Tender
- Limited Tender
- Open Tender
- Global Tender
- Purchase Order
- Description of Materials to be supplied
- Quantity to be supplied
- Cash and trade discount Rates at which materials are supplied
- Additional charges e.g. Excise duty, Sales tax, packing charges, insurance Instructions in
respect of delivery
- Guarantee clause
- Inspection clause
- Method of settlement of disputes
- Terms of payment Receipt and Inspection
- After the receipt of materials, inspection of the material is done. Inspection of materials
means that the quantity actually received is compared with the quantity ordered; also the quality of the material is inspected.
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