Discover the deal qualification process for procurement with airSlate SignNow

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hi friends welcome to my channel and in today's video let us understand about the procurement and then you will understand what are the steps involved in procurement process so procurement is a process of buying goods or service for a business purpose procurement is a much broader term that includes purchasing also so we can say that purchasing is a part of procurement so procurement involves sourcing and purchasing goods and service from an external source to fulfill the requirements of the organization which will lead to the profitability and efficiency procurement involves all kind of acquisitions which include leasing renting and contract to arrange the goods and service procurement is done when we aim to acquire raw materials and supplies specifically for a large business at a large scale at the best possible price here various factors are considered like quantity quality and delivery time procurement is a simple purchasing arrangement specifically with a single supplier the effective procurement process involves multiple stages such as choosing a potential supplier negotiating the terms and prices with the supplier investigating the purchases and then purchasing the actual product or service and then monitoring the delivery of the product and also renewing the orders and establishing a relationship with the supplier a strong procurement process will help in the financial efficiency of the business it will help in paying the right price for the goods and services helping in minimizing the delivery time and also helping in choosing the best partner for your business the procurement process will completely depend on the size and type of the business here we will discuss 7 key steps which we should follow in the procurement process the first step is identifying the goods and services needed the first step in the procurement is to realize and understand the need to obtain the goods and services from the external organization here recognize the need of each and every department so that you will have overall visibility of the spending that is required in the company this helps in financial planning and cutting the cost wherever necessary for example if you are setting up a printing press initially you need to outline how many and what type of printing machines you need or if the printing press is expanding its current operations the organization should come back to this stage and assess what kind of machines do they need to meet the customer need and the demand second step is considering the list of suppliers finding the right kind of supplier who meet your expectation is very vital in this business so if you choose to work with the wrong supplier then it will have a negative impact on your business in the long term not only you end up paying more but it will affect the deliveries and it could delay our business operations also so thorough research is needed before finalizing the supplier so we should always have some options in the suppliers and compare all the different options and then finalize the best suited for your business the supplier should have certain characteristics which are he should be accountable for the timely delivery you should have the production capability to meet your demands there should be no communication gap between you and supplier the supplier should also have work ethics and you should focus on building the relationship with the buyer third step in procurement process is negotiating the price and terms with the selected supplier once the supplier is finalized the next step is to negotiate the terms and conditions with the supplier this is very important because this is the stage where the price negotiation happens and it is important for both the parties to create a win-win situations contract and terms not only cover the price negotiated but also cover the business condition and timeline of delivery here in this stage analyze if any previous agreements are there so that you can streamline the cost and save the money the fourth step is finalizing the purchase order once the contact is ready between the two parties it is time to finalize the purchase order the purchase order is a commercial document prepared by the buyer and sent to the supplier the purchase order will have details like description of goods and services required by the buyer negotiated and agreed prices quantity required place of the order and delivery to be made date and time of the supplier once the purchase order is approved then it is sent to the finance team for its release and sent to the supplier once the purchase order is received at supplier site then the order is made ready and sent to the buyer as per the delivery timelines agreed in the contract stage the fifth step in procurement is receiving the invoices and payment processing so once the supplier receive the purchase order he will send the invoice and instructions of payment to the buyer on this invoice the order details are mentioned so it is important to keep the record of this invoice for future reference depending on the agreed terms the buyer will have a certain amount of days to make the payment to the supplier usually in business it will be 30 days credit period payment depends on the agreed terms between the buyer and the supplier and also on the strength of the relationship between both the parties it is always recommended to pay your invoices as you receive them this will make supplier appreciate the fact that you always pay on time and during certain times the supplier may also include extra material in your order at little or no extra cost due to your loyalty the next step is delivery of the order again depending on the terms the delivery will be happening soon after the purchase order has been sent in always double check once the order is received at your place so when the order arrives take the invoice and have a thorough chuck in the delivery made if there is any discrepancy then immediately inform the supplier with proof to rectify the delivery issues such as shortages and access deliveries for example suppose if the printing press has ordered any upgrade on their machines and it is delivered with the missing parts then it will affect the production of the prints and it may delay the orders going out this delay will affect the relationship of the printing press with their customers so the 7th and final step in procurement process is maintaining the records of the invoice always make sure that you keep all the records of your invoices and payment records here in case of any audits carried out you will get to know how much exactly we have spent within the allotted time it will also help in analyzing the spending in future also keeping all invoices will help in understanding whether you are overspending or sticking to the planned budget for example if the printing press business looks back and analyze the records and find any overspending in the materials then they can decide to look upon for a new alternative supplier so friends this was the brief discussion about the procurement and the steps involved in the procurement process so if you like the video then please hit the like button and please subscribe to my channel to get such more updates in the future thanks for watching and see you all soon in my next video you