SOPs to be followed before placing a Purchase Order in the Purchasing Department

  • Created Date27 Apr, 2018
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In a well run purchasing department of a company there is always a set of purchasing procedures.  This is a formal document or manual that sets out each person’s responsibilities in the purchasing cycle as well as detailing each of the specific purchasing procedures. The below Purchase Process is related to Corporate having its Regional Office and Branch Offices in PAN India. However the Process can be modified as per the extension of the offices across India.

Scope: All regional offices (if any) and corporate office. All Branch Offices (If any).

Responsibility: AI- Admin In charge (Administration Department) 

Corporate office will handle the Purchase of Promotional Items, Fixed Assets, IT Purchase, and Office Consumables & Service taken from Outsourced Trainers, Consultants and Contractors. Regional Offices and Branch Offices will handle the Purchase of Fixed Assets, IT Purchase, and Office Consumables & Service taken from Outsourced Trainers, Consultants and Contractors.

1)     Determining and Recording Requirement: A need is established by a user department. Purchase Requisition (PR) is prepared by the user department. The same will be approved by the Department head and forwarded to the purchase department for further action. PR should contain the details of the requirement such as quantity & specifications and date by which the material is required at the user’s end.

Purchase Requisition (PR) is the trigger for any kind of purchases/Services to be procured.

In Corporate Office: In case of promotional items is below MOL (Minimum Order Level), Store In charge to raise a PR, get it approved by Admin In charge and submit to the purchase department for raising Purchase Order (PO). A limit can be prescribed for the amount for the approval. Like for a certain amount Admin In charge is an approving authority but beyond a certain limit, the authority transfers to a senior official of a company.  

In Corporate, Regional, Branch Office : In case of all general purchases like Fixed Assets, Office Consumables, Service taken from outsourced trainers, consultants & contractors (With regard to maintenance work) , PR is to be raised by the user department and need to be submitted to Admin In charge.

IT related Purchases: In Corporate, Regional, Branch Office all approved IT PRs (for Desktop, laptop, software or any other IT related utility etc) are sent directly to IT Department of the corporate office. IT Department will handle complete purchase process since IT persons are well versed with the technical matters in the purchase of IT Items. IT Facilitator will raise the Purchase Order as per requirement and send to Admin In charge once the purchase is done.

PURCHASE REQUISITION FORMAT (PR)

DATE

 

 

 

 

 

 

 

SR. NO

ITEM

QUANTITY

Required By……..

 

 

 

 

 

 

 

 

Sign

 

 

 

User Dept.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2)     Determination of Possible Sources: For repeat order of regular office consumables, order is placed to the vendor by the Purchase Department. For Promotional items or New Requirement, search for vendor is to be done by the Purchase. Quotations are called from at least three vendors. If PR is raised below Rs. 5,000/-. Admin Assistant to put a stamp “Purchase Below 5000/- on PR. PO will not be generated in such cases.

 

3)     Comparison of Quotations: For any specific or new purchase search for suitable vendor is done by Admin Assistant. Call for quotation for latest three vendors for best rate & quality purpose is mandatory.  A comparative chart of quotation is maintained and choice done on the basis of best rates, service along with quality.

COMPARATIVE CHART OF QUOTATION

DATE

 

 

 

 

 

 

 

 

 

 

SR. NO

ITEM

PRICE

DELIVERY/SERVICE

QUALITY

 

 

VENDOR A

VENDOR B

VENDOR C

VENDOR A

VENDOR B

VENDOR C

VENDOR A

VENDOR B

VENDOR C

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL PRICE

 

 

 

 

 

 

 

 

 

 

SELECTED VENDOR

 

 

 

 

 

 

 

 

 

 

PO VALUE

 

 

 

 

 

 

 

 

 

 

SIGN

 

 

 

 

 

 

 

 

 

 

ADMIN IN.

 

 

 

 

 

 

 

 

 

 

 

4)     Authorization: The most favourable quotation to be identified on the basis of price, quality & service. Approved quotation to be stamped with “Quotation Approved” stamped and signed by Admin In charge. Rejected quotations are filed in quotation file.

 

5)     Order Placement:  A purchase order is placed to selected vendor.

 

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