The nine main stages of the procurement process can be thought of in three separate phases: Research, Purchase, and Payment.
This phase covers the initial stages in which the business identifies its needs, creates a purchase requisition, and evaluates suppliers. Even after the initial sourcing steps are completed, it’s a good idea to build strong relationships with suppliers over the long term, allowing them to learn about your organization’s needs and improve products and processes, ultimately developing trust in your organization.
The purchase phase
The purchase phase includes negotiating the terms of the purchase, creating purchase orders, and testing the goods and services.
The payment phase
The accountants perform a 3-way match to ensure the association between the order, the invoice, and the delivery note. The invoice can then be approved, and the payment settled. A record of all invoices, purchase orders, and payments must be kept carefully according to the law.
Procurement life cycle
Organizations usually think of steps in the procurement process as a life cycle. This point of view provides a reminder that all the tasks and actions in the procurement process overlap and rely on each other in a continuous process. A carefully calculated procurement life cycle enables integration between the process and the business as a whole, including the need to adhere to the existing rules and procedures of the organization in areas such as budget. The process is not always linear, and sometimes adjustments need to be made to address a dynamic digital supply chain with changing suppliers, availability, and costs.