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Procurement process is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, this is often done through a tendering or competitive bidding process.
There are seven steps involved in procurement process in school system:
Step 1: Identify the requirement for goods and services from all the departments
the first step of the procurement process entails identifying and consolidating the requirements of all departments in the school. This provides visibility into the spend areas and categories to identify areas for cost savings through spend analysis.
Step 2: Identify and evaluate a list of suppliers
Once the requirements of the various departments in the school are identified, the next step is to identify a list of potential vendors that supply the requested goods/services.
Step 3: Negotiate the contracts with selected supplier
After a supplier is selected to fulfill the requirements of the school, the contract process begins. Contracting is a crucial step for any organization for maximum value creation and stimulating buyer-supplier collaboration. This process involves assessing critical factors mentioned in a contract like pricing structure, scope of work, terms and conditions, timelines of delivery, etc. Detailed analysis and negotiation of contracts also gives insights into more cost savings opportunities such as dynamic discoun
Step 4: Raise a purchase requisition and release the purchase order
After the contract is finalized between the school and its supplier, the next step is to raise a purchase requisition (PRs) and release of purchase order, i.e. POs, for the supplier.
PRs act as internal approvals for procuring any good/service from external suppliers and generally include information regarding the description of the good/service to be procured, pricing and quantity, supplier information and the approval workflow. Once the PRs go through the entire approval workflow, the finance team releases the PO to the supplier that documents information like the PO number, payment terms, supplier information
Step 5: Complete the payment process upon receiving an invoice
Once the supplier receives a PO, an invoice listing all requested goods/services along with corresponding pricing is sent to the organization. Then the POs and invoices are matched by the procurement team to ensure they have received the quality and quantity (includes best pricing) as requested.
Depending on the payment terms established between the organization and its suppliers, the payment is released pre- or post-delivery.
Step 6: Receive and audit delivery of requested goods/services
Based on payment and contractual terms, the supplier delivers the goods/services. It is necessary for organizations to audit the delivery upon its arrival to ensure the suppliers have met quality expectations.
Step 7: Maintain proper records of invoices
After receiving the delivery, as a best practice, it is important to effectively store all invoices in order to track spend and the various expenditure categories within the school
CONCLUSION
Procurement has started its journey towards becoming a long-term strategic function of an organization in contrast to its tactical past. Hence, the objective of this article has been to help organizations design a well-structured and effective procurement process.
While organizations have diverse procurement needs and various procurement processes in place, the steps highlighted in this article can be customized to an organization’s specific requirements.
amosoduogo answered the question on July 19, 2019 at 13:04
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