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Best practices for implementing a Purchasing/Procurement Policy

Procurement Best PracticesHello everyone, was curious if others have had any experience developing and implementing a purchasing policy from scratch. Here's a high level TOC I came up with: - Summary - high level overview of what policy covers and benefits - Scope - what policy applies to, what organizations/depts - Responsible Persons - who is responsible for following and enforcing policy - Definitions - some key terms used throughout doc - Policy and Procedures - full policy and process. Includes how to create PO, how to fill out form, what happens if invoice is received with no PO # specified, etc. Approval Levels. I'm sure there's more I can throw on this skeleton but I want to keep it succinct and to the point. We don't have a formalized purchasing department but do need to move to something more controlled and structured. We use paper based ordering and invoice processing for now with goal of introducing automation here which this policy will help become backbone of. Would love to hear any suggestions on content or if folks have templates, examples or samples they could pass on. Cleaned up of all proprietary secret info of course. Any recommendations/best practices on how to roll this out in terms of communication, etc would also be appreciated. Thanks in advance! Jim


Nicole Lucarelli
Title: Director
Company: Financial Services
LinkedIn Profile
(Director, Financial Services) |

Hello, James

Please check out my blog posts - I have written several regarding the rollout and components of a procurment policy.

From what you describe, you are focusing mainly on the procurement process? One area I didn't see was contracting, who can sign, does legal review, what are your preferred terms, etc. This could be considered in conjunction with the PO process.

You may also want to give some thought to the evaluation and selection of vendors. More than just a "3 bids" policy, but how, for large or important spend areas, you can develop a sourcing process as well. This can be in the form of in house staff, consultants, or something you outsource. It would depend on your spend profile and what you are trying to achieve.

In any case, don't underestimate the amount of change management this will entail. Those who have been handling this in the past, may feel like something is being taken away from them. Communicating the goals, benefits, and asking for their input will help the rollout.

I have done this several times. I would be happy to talk more offline.

alfred minnaar
Title: ceo
Company: Smart-It Accounting Software
(ceo, Smart-It Accounting Software) |

If you are looking for procurement / accounting software to help you with the process, I would look for the following features in a program:
A good program must offer the following:
Be able to order only for a certain number of days. Usually determined by your terms with the supplier.
Must show re-order levels as supplied by you bat also show predictions figures for future sales and by this I don't mean only average figures.
To help in the decision making process it must show statistics like Minimum Levels, Maximum Levels, Growth Rate per item, reliability of growth prediction, Days since sold etcetera.
Must take lead times into consideration.
Must be able to link the same item to different suppliers and the program must be able to select from which supplier to buy without human interference.
Must be able to see if the negotiated price was delivered.
Complete history (sales and purchases) with graphs must be easily accessible.
Must be able to see at a glance Pending Orders, Orders Not Received, Partially Arrived and Cancelled Orders.
Must be able to handle or supporting documents as well as document imaging.
Split costs among cost centres.


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