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1. 4. centralized purchase
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1. 4. centralized purchase

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  • 1. 1. Favourable terms (Trade discount onlarge purchases)2. Specialised Knowledge of Purchasedept personnel3. Better control by Purchase dept (not byall)4. Convenient compilation, consultationof records5. Uniform policy – procedures – practices6. Avoid duplication of efforts
  • 2. 7. Liaison b/w production & service depts8. Economy to vendor
  • 3. 1. Delay in process2. Branches can’t take advantage of localpurchases3. Misunderstandings b/w purchase deptand branches4. High initial cost
  • 4. They need to decide;1. What to purchase?2. When to purchase?3. Where to purchase?4. How much to purchase?5. At what price to purchase?So the following procedures are done;1. Receiving purchase requisition2. Exploring sources of supply & choose3. Preparation & execution of pur/ orders4. Receiving & Inspecting5. Checking & Passing of bills for payment
  • 5. Swadeshi Co LtdNo….…. Purchase Requisition Date……....…Regular / Special Date by whichmaterials required…..S. No Description Stores Code No Qty required RemarksRequested by…….. Approved by………….For use in the Purchase DeptQuotations invited on……..……From 1. ………………………………..2. ………………………………..3. ………………………………..Other Action………………………..…. Purchase Officer1. What? Description, Stores Code2. When? Required date3. How much? Qty required4. Whom? Quotations invited
  • 6. Prepared by (Regular) Store Keeper(Special) Dept HeadApproved by An executive Works managerPlant SuperintendentNo of copies Triplicate1. original Purchase dept2.Duplicate store keeper3. Triplicate Authorising execAction starts Only after receiving requisitionfrom the storekeeper
  • 7. Source is selected after receiving purchaserequisitionFor every group of material, separate listof suppliers (Name & address) maintainedby the purchase deptQuotations are received from them byissuing tendersComparative statement of quotations isPrepared & desirable supplier is selected
  • 8. How do they choose the supplier?1. Manufacturing capacity, reliability2. Financial conditions of supplier3. Mgt of supplying firm4. Price quoted5. Qty applicable to the quoted price6. Terms of payment7. Terms of deliveryPurchase price should b the least(ie., uniform quality – right time, price)
  • 9. Swadeshi Co LtdPurchase OrderNo……. Dated ………… Purchase Requisition No……….To (Supplier)Your quotation No……dated…….has been accepted.Please supply the following items of stores in accordancewith the instructions mentioned therein and terms andconditions listed on the reverse of this purchase orderS No Description Qty Rate TotalcostDeliverydateRemarksTerms of DeliveryTerms of PaymentPacking and Dispatch InstructionsDiscount Allowed Purchase Officer
  • 10. After choosing the supplier, purchase deptprepares purchase orderIt authorizes supplier to supply particularMaterial. It is the evidence of contract.It binds the buyer and supplier to theterms mentioned therein.It is the document authorizes receivingdept to receive, A/c dept to pay.3 – 5 copies may be prepared (supplier-receiving dept-initiator –A/c –purchasedept)
  • 11. Swadeshi Co LtdGoods Received NoteSupplier’s Name……. No …………Purchase Order No……… Date ………S No Description Code No Qty Date Amount RemarksReceived by…………… Inspected by……………Store keeper…………. Costed by……………….Stores Ledger Posted by……………
  • 12. Large concerns Separate Receipt& inspection deptSmall concerns Store keeper does it1. Inspection is completed2. Goods receiving clerk enters t in GR Note3. Five copies of note are prepared (1 forReceiving dept -4 to store keeper along withmaterial)4. Sore keeper check qty –qly- and sign all 4,keep 1 copy & send copies to purchase, A/cand Initiator.
  • 13. When invoice received from supplier, it is sendto a/c section to check authenticity &arithmetical accuracyQty & price are checked with ref to storesreceiving noteA/sc section certifies & passes the invoice forPaymentCashier makes the payment as per T&Cmentioned in the purchase order

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