Introduction to Procurement Process Checklist Template:

Procurement Process Checklist Template

"Procurement involves much more than just handing over the company credit card and paying for a purchase" - Procurify 

The basic purpose of procurement is to make sure that the organization buys the goods and services it needs, to operate in a profitable way.

This involves all sorts of activities, ranging from sourcing materials and services to developing relationships with key suppliers. But the biggest responsibility that a procurement department faces is giving the business confidence that the supplier they are working with is the best supplier for them.

To help them do this, they follow a procurement process. This helps them to reduce prices, cut costs, identify better sources of supply, and make sure potential new suppliers are properly vetted.

Although a company’s procurement process will be influenced by factors like the company’s size, industry, available human resources, and organizational structure, this Process Street checklist will give you a complete procurement process. It will explain, step-by-step, how to identify the true needs of your organization, find the perfect supplier to fulfill those needs, and negotiate favorable contract terms and pricing.

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Enter organization details

Enter your company's details in the fields below.

Identify the Goods and Services to Procure:

Establish what the business needs

Use this Business Needs Assessment Template to conduct a business needs assessment to determine what the business needs. 

Once you have done that, enter the business needs in the fields below. 

If you have more than five business needs, you can add additional form fields to capture these. Find out how to do this here. 

Confirm which business need you are procuring for

Out of the business needs you identified in task 4, select the top priority business need that you need to procure goods and services for.

Enter this need into the field below. 

Establish what goods/services are needed

In the fields below, list the goods/services you need to procure to meet the priority business need you identified in task 5 and establish the costs. 

{{form.Priority_business_need}}

When listing the goods/services, think about the following:

  • 1
    How will the goods/services deliver value for money?
  • 2
    What are the estimated costs for these goods/services?
  • 3
    What are the estimated benefits of procuring these goods/services?
  • 4
    How do these goods/services reflect the priorities of the business?

Approval of Purchase Request:

Send a purchase request to purchasing

Using the email widget below, send a purchase request, to the purchasing/finance department, for the procurement of the following items: 

{{form.Goods/services_needed_to_fulfill_the_business_needs}} 

This purchase request will be reviewed by the procurement/finance team. Assign the next task to the person who will be reviewing this. This will enable them to either approve or reject it using the approval feature.

Approved requests will become purchase orders (PO's).
Rejected requests will be sent back to you with a reason for the rejection.

Approval:

Will be submitted for approval:
  • Send a purchase request to purchasing
    Will be submitted

Receive purchase order

Once your purchase request has been approved, you should receive a PO for the goods/services you want to procure.

Upload this PO in the field below and store it in a central location as you will need this further down the process.

Selection of Supplier:

Make a list of all suitable potential suppliers

Once you have received your PO, create a list of suitable suppliers for the goods/services you want to procure. 

Once you have created this list, store it somewhere central so you have a record of suppliers for future procurement activities, and add the file location/url to the field below.

Make sure you keep this supplier list updated. 

Send request for quotation to suppliers

Now you have your list of suppliers, use the email widget below to send a request for quotation (RFQ) to each one.

Make sure you include as much detail about the potential order as possible so the supplier can give an accurate quotation and you avoid any misunderstandings later down the line. 

Include details such as: 

  • 1
    Quantity
  • 2
    Timings
  • 3
    Expected quality
  • 4
    Location
  • 5
    Preferred delivery method

Your intention with this task is to narrow your list of suppliers down.
You want to end up with a shortlist, so you can compare each one and select the best fit in terms of cost and value for money.

Create a shortlist of suppliers

Once you have received quotations from your suppliers, list the top three in the fields below. 

Research and compare shortlisted suppliers

Now you have your top three suppliers, you need to research and compare each one so you can choose the best supplier for your company.

List the positives and the negatives for each supplier in the fields below. 

It's not just about getting the cheapest deal, it's about getting the best value for money, so don't forget to research and take into the account the following when making your comparisons:

  • 1
    Logistic capabilities
  • 2
    Distribution model
  • 3
    Experience
  • 4
    Company size
  • 5
    Customer reviews
  • 6
    Price

Supplier 1. {{form.Supplier_1_2}}

Supplier 2. {{form.Supplier_2}}

Supplier 3. {{form.Supplier_3}}

Select the perfect supplier

Once you have researched and compared each supplier, you should now be in a position to choose the best supplier for your company and for the goods/services you need to procure. 

Confirm the supplier you have chosen and enter the following details about them in the fields below.

Negotiation & Contract:

Decide time frame

Now you have chosen {{form.Chosen_supplier}} to supply {{form.Goods/services_needed_to_fulfill_the_business_needs}}, you are now ready to create the contract and start negotiating the terms and conditions of your procurement order. 

First thing you need to decide on is a timeline.

Answer the below questions to get this straight in your mind before adding your timings to the contract. 

Decide delivery method

Next, you need to identify what your delivery preferences are. 

Answer the below questions to get this straight in your mind before adding your preferred delivery method to the contract. 

Decide costs

Finally, you must decide how much you are prepared to pay for the goods/services. 

You know how much internally you are prepared to pay for these goods/services: {{form.Costs_of_these_goods/services}}, and you know how much the supplier is expecting to receive for the goods/services. 

Discuss both costs internally, with the procurement team, and establish a reasonable cost.

It may be exactly what they have asked for, it may beslightly less or slightly more, or it may be somewhere between the two. 

Once you have agreed on a cost for the goods/services, answer the following question, and add the cost and reason you are prepared to pay this amount to the contract. 

Send contract for internal approval

Now you have completed the contract, upload it in the field below and send it for internal approval using the email widget below. 

Assign the next task to the person who will be reviewing the contract. This will enable them to either approve or reject it using the approval feature.

Approval:

Will be submitted for approval:
  • Send contract for internal approval
    Will be submitted

Send contract to supplier

Once you have received internal approval for the contract, send it to {{form.Chosen_supplier}}using the email widget below.

Sign contract

Once the supplier has signed the contract and sent it back, you now need to sign it, scan it, and re-upload it in the field below. 

Don't forget to store the contract in a central location. 

Send the PO to the supplier

Now the contract has been signed by both parties, you can send the supplier the PO you received from the purchasing/finance team, so they can process the order their end. 

Receive Goods & Services:

Inspect the delivered goods

Once you have received the goods/services, you then need to examine the order and notify the supplier of any issues with the received items.

Answer the following questions to determine if there are any issues that the supplier should be notified about. 

If you are happy with the goods/services received scan and store the order receipt/ packaging slip in a centralized place.

(make sure the file is appropriately named so it is easy to find)

Then, upload the scanned receipt in the field below.

Notify the supplier of issues

Notify the supplier of any issues you found with the order, using the email widget below. 

Update your supplier list

Make sure you update the list of suppliers with the issues you found with the order.

{{form.URL/file_location_of_the_supplier_list}} 

Receive the supplier invoice

Once you have received the goods/services and you are satisfied, you will receive an invoice from the supplier. 

Scan this, store it somewhere central, and upload it into the field below.  

Three-Way Matching:

Conduct three-way matching

Now, you need to reconcile the purchase order, the receipt, and the invoice to make sure there are no discrepancies and that the transaction is accurate.  

{{form.Upload_PO}}

{{form.Upload_receipt}}

{{form.Upload_supplier_invoice}}

If the above all line-up, then you will be able to approve the invoice in the next task. 

Approve Supplier Payments:

Approval:

Will be submitted for approval:
  • Conduct three-way matching
    Will be submitted

Send invoice to accounts

Now you have approved the invoice and ensured that the transaction was accurate, send the invoice to accounts for processing using the email widget below as a guide.  

Record Keeping:

Store your documents centrally

Throughout this process, you should have been storing all procurement documentation, such as PO's, invoices, supplier details, contracts, etc.. in one central location.

Doing this creates efficiencies for future procurement endeavors and gives complete transparency over your procurement activity.

Check you have the following documentation for this procurement stored somewhere centrally and provide the URL/file location for this location in the field below.

  • 1
    Purchase order
  • 2
    Receipt
  • 3
    Invoice
  • 4
    Supplier information
  • 5
    Contract

Sources:

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