In most companies, especially startups, it is a common practice to have any employee do the sourcing of vendor, price evaluation, and buying. Speaking of best practices, buying authority should not be given to everyone. It’s like giving employees an easy access to the company’s wallet. If you don’t want that, then consider assigning persons who should be involved in your purchasing management process and stick to it no matter what.
Yes, NO MATTER WHAT.
If you haven’t encountered internal issues such as unauthorized or fraudulent purchases, false charges, or suspicious personal purchases, then you may consider your company lucky. We’re not saying that you shouldn’t trust your employees, instead, think of this as a step closer to a more streamlined, transparent purchasing process.
Who should be involved in the purchasing process?
In purchasing management, the best practice is to delegate buying tasks to different employees. With proper training, this will guarantee a smooth and efficient purchasing flow and, more importantly, ensure that no single employee has control over the buying activity.
With this, we suggest to assign different employees for the following roles:
- Evaluate the price and approve purchases
- Receive order/s
- Double-check and approve invoices for payment processing
- Review and reconcile financial records
- Manage inventory
Assigning roles to employees develops a culture of accountability and authority. This culture makes them more cautious and productive in doing their duties.
In essence, no matter how urgent or simple your requirements are, always stick to the process. Employees involved must be informed about everything because, as we have said in our previous purchasing tip, “a bad purchase can hurt, too,” even if it’s cheap.
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