Question

What is procurement of material and what is purchasing of material . i want valid source , not copy from anywhere else with reference .

Answer 1

Procurement of material:

This includes the whole process by which the material is selected, then ordered, billed, and then purchased from the supplier.

Under this, firstly we would identify the goods and services needs of the company. After that, we would assess different suppliers and invite the quotations from them, from that, we would select one which is best suited for the organization. We can also negotiate accordingly. Afterward, we would prepare a purchase order and send it to the supplier. Then we would receive the order, inspect the quality and other terms and conditions. There would be a cross examination of different documents available in order to detect any errors or frauds. And then, if satisfied, will make payment for the same. At last, the transaction will be recorded in the books of accounts.

Purchase of materials:

It only includes the steps related to ordering, receiving, and making payment regarding the goods and services. That means, it merely means buying the material. As such, procurement is a wider term than purchase and includes it.

This process includes placing orders, receiving goods, recording it in books of accounts, cross-examination with the documents, and finally, making payment regarding the same.

Reference:

Article: What is the difference between Procurement and Purchasing?

Article by: Matt Lim