What are the main objectives of the purchasing function?
To make overall company management easier, a good purchasing function needs to be put in place. This is a policy that includes the various rules governing the company’s purchasing and supply operations. Above all, it rationalizes the production and sale of products.
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Determining the company’s needs
The purchasing function is an important step in the company’s development. Its creation begins with the definition of the company’s needs. This involves not only identifying procurement needs, but also those in the other areas covered by the purchasing department. The company must also ensure that its procurement is subordinated to the production cycle or to accounting, in order to better manage its cash flow. Purchasing management requires knowledge of many sectors and departments within the company, and failure to take account of the needs of other departments can lead to dysfunctional operations. That’s why more and more companies are turning to purchasing management software to keep track of their needs at a glance. The software synchronizes all the data for each branch and provides a detailed report, enabling the purchasing department to make the best decision for the company.
Finding the best supplier
As part of its strategy, the purchasing department seeks to find the supplier that best meets the company’s needs. Through an analysis of their offers and services, it obtains a precise idea of the ideal supplier. Knowledge of the company’s needs enables it to work harmoniously with them. The purchasing function minimizes delivery pressures and stock-outs in the supplier-company relationship. With a working methodology well in place, the purchasing department is constantly informed of any problems relating to stock management. Suppliers inform them of any price increases or stock-outs, and a good policy ensures that suppliers receive payment on time. Poor management, on the other hand, means that suppliers receive payment late, with serious consequences for their management and, consequently, a poor relationship. A company that pays its invoices late is necessarily neglected by its suppliers. To avoid being relegated to the background, it is therefore important to implement a good purchasing policy. Digitizing transactions improves relations between company and supplier. Everything is done on time, with no risk of oversight.
Purchasing development
The aim of a purchasing function is to promote company growth. Thanks to an efficient purchasing process, the company can take advantage of all the latest developments in its field. The purchasing function even looks for the best possible supplier. Indeed, it’s important for the purchasing department to be aware of trends in its field. If it’s a production company, it needs to know about new raw materials, both quality and affordable. If it’s a commercial company, purchasing managers need to anticipate their customers’ future needs, especially in the event of changing trends. That’s why it needs to equip itself with various tools, such as digitalization. It must also constantly monitor the networks to keep abreast of new developments, and above all it must make its suppliers its best allies. They are the best informants a purchasing department can have. However, without a good purchasing policy, it is virtually impossible to control all these aspects.
Supporting the company’s development.
To ensure company growth, all departments need to be in sync. The purchasing department’s policy is designed to support the company’s development. If the marketing department attracts targets and they become customers, but the purchasing department is then unable to manage everything, the efforts are in vain. If the sales department offers a multitude of products, but the purchasing department can’t supply them properly, the sales shortfall increases. If the finance department generates cash, but the purchasing department can’t control costs, it disrupts the company’s entire accounting system. To avoid disrupting the company’s operations, you can entrust the implementation of your purchasing policy to an expert company like Weproc. Weproc has a panel of professionals capable of perfecting your purchasing function.
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Weproc is a SaaS software specialized in digitizing the procurement process of companies. From purchase requests to supplier invoicing, through the validation process, Weproc is designed to simplify the purchase management of SMEs and mid-sized companies by centralizing all purchase-related activities.