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Purchasing process
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<p><a href="/facts/Purchasing/Vk9GPuLm">Purchasing</a> is the formal process of buying <a href="/facts/Goods_and_services/zsMmYyUJ">goods and services</a>. The purchasing process can vary from one organization to another, but there are some common key elements. </p><p>The process usually starts with a <a href="/facts/Demand/mtb1m6F0">demand</a> or requirements – this could be for a physical part (<a href="/facts/Inventory/vSBu0d9r">inventory</a>) or a <a href="/facts/Service_(economics)/B7L4tR8r">service</a>. A <a href="/facts/Purchase_order_request/caBsYrlP">requisition</a> is generated, which details the requirements (in some cases providing a requirements specification) which actions the <a href="/facts/Procurement/y35C00fn">procurement</a> department. A <a href="/facts/Request_for_proposal/rneQaVvs">request for proposal</a> (RFP) or <a href="/facts/Request_for_quotation/k5w1tUmH">request for quotation</a> (RFQ) is then raised. Suppliers send their quotations in response to the RFQ, and a review is undertaken where the best offer (typically based on <a href="/facts/Price/yWQ8edfN">price</a>, <a href="/facts/Availability/l8SGSyyf">availability</a> and <a href="/facts/Quality_(business)/V3IzcDc3">quality</a>) is given the <a href="/facts/Purchase_order/caBsYrlP">purchase order</a>. </p><p><a href="/facts/Purchase_orders/caBsYrlP">Purchase orders</a> (PO) can be of various types, including: </p> <ul><li>standard - a one time buy</li> <li>planned - an agreement on a specific item at an approximate date</li> <li><a href="/facts/Blanket_order/xWVkvTSm">blanket</a> - an agreement on specific terms and conditions: date and quantity and amount are not specified.</li></ul> <p>Purchase orders are normally accompanied by <a href="/facts/Contractual_term/yXmFGwEv">terms and conditions</a> which form the contractual agreement of the transaction. The supplier then delivers the products or service and the customer records the delivery (in some cases this goes through a goods inspection process). An <a href="/facts/Invoice/Ad1XP7qp">invoice</a> is sent by the supplier which is cross-checked with the purchase order and documents specifying which goods have been received. The payment is then made and transferred to the supplier. </p>