A buyer and a seller are involved in the procurement process. The buyer must clearly state what they wish to purchase as well as all other planned terms and conditions. The seller must present the buyer with a proposal that contains all of the specifics of their bid. They negotiate and come to an understanding based on the details exchanged between the buyer and the seller.
Since the buyer-seller agreement is legally binding, the information exchanged between them must be completely accurate. Such data must be exchanged in a structured, recorded manner. Procurement documents are a type of document that falls into this category. As a result, the procurement records become the most significant tool in the process.
Table of Contents
Request for Proposal (RFP) Document
A request for proposal (RFP) is a standardized document that is designed to collect relevant vendor information, as well as pricing specifics. It publicizes the project by releasing a request for proposal paper and soliciting offers from vendors that will assist in completing it. It is crucial to outline the company’s short and long-term objectives, which will influence the negotiating approach, as well as choose solutions based on solution and cost. RFPs should not be too precise, as this will limit the imagination of the third party, nor should they be light on facts, as this will leave space for uncertainty.
Request for Information (RFI) Document
For request for information (RFI) is a document that is used to gather general information about goods, providers, or suppliers. It’s an information submission that’s not binding to either the provider or the customer, and it’s often used before detailed item requisitions. It is normally submitted before an official object requisition. It is essential for a general analysis of the current industry, as well as a quicker way of gathering knowledge and information that is useful in the early stages of the purchasing process. As a result, it is essential to draft successful RFPs that provide material such as a business summary, specifics of the product or service required, and recommendations for responding.
Request for Quotation (RFQ) Document
A Request for Quotation (RFQ) is a standardized document that sets out the criteria for individual purchases and asks for a price quote. Since it only lists the products to be ordered and demands a quote, an RFQ is a much simpler document than an RFP. In answer to an RFQ, the buyer can include a price quote and other terms. As the RFQ format is uniform within a given company, when the RFQs come back with price quotes, the soliciting company may compare them easily. Typically, an RFQ process consists of four sections: the preparation phase, the processing phase, the awarding phase, and the closing phase.
Invitation for Bid (IFB) Document
When the product or service being offered is scarcely different, an Invitation for Bid (IFB) is issued. The price is the only significant factor. Vendors send their prices for the offering in a competitive manner. Invitations to bid are useful for predictable projects, such as when the end product’s specifications are well-defined. It is critical to provide all bidders with standardized information, set strict minimum standards to prevent compromising efficiency, and have no price negotiations with the winning bidder. The key elements are the nature of the materials or the skills required to complete a project and submission guidelines.
Purchase Requisition (PR) Document
A purchasing requisition (PR) is a document that is primarily used by an organization. It is exchanged with a department manager or purchasing officer, who is informed of all transactions made on behalf of the corporation. The contact information for the provider, the budget information, the authorized personnel for the order, and the procurement date are all included in the Purchase Requisition. It is essential for keeping a purchase audit trail and arranging reporting processes with the accounting department. The supplier’s data, budget statistics, staff to approve the purchase, and the acquisition date are the most critical elements.
Purchase Order (PO) Document
A purchase order is given before arrival and is used by a customer to position an order. When an order is delivered, a vendor issues an invoice using invoicing tools. It states the price the buyer owes for the bought goods as well as the deadline for payment.For better order monitoring, it is essential to describe exact order specifics and to indicate information on the order’s arrival date. This will prevent audit issues by having a definitive audit trail, and it is therefore technically obligated to defend all parties. The key elements are quantity of items, a detailed description of items and indicating the SKU or model number.
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References
Ashish Deshpande (2020). ”How to Manage the 7 Most Common Procurement Risks”. Retrieved from https://www.frevvo.com/blog/procurement-risks, accessed 27/03/2021.
Ben Ng Boon Hee, DPSM (2018). “Key Strategies to enhance Supplier Relationship”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/key-strategies-enhance-supplier-relationship, accessed 27/03/2021.
Calvin Khoo EngChye, DPSM. (2019). “Key Procurement Methods for Pharmaceutical Drugs and Devices”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/key-procurement-methods-pharmaceutical-drugs-devices, accessed 20/03/2021.
Diksha, Revv (2020). “10 Must-Have Documents to Secure Your Procurement Process”. Retrieved from https://www.revv.so/blog/sales/10-must-have-documents-in-your-procurement-process/, accessed 20/03/2021.
Keith Murphy (2019). ” Procurement”. Retrieved from https://planergy.com/blog/what-is-a-purchase-order/, accessed 20/03/2021.
Tina Wong Woan Chuen, DPSM (2019). “Five Essential Criteria for a Successful Procurement Contract”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/five-essential-criteria-successful-procurement-contract, accessed 20/03/2021.
Wong Siew Kuan, PDPM (2019). “Essential Stages of a Procurement Tender for the Services Sector”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/essential-stages-procurement-tender-services-sector, accessed 20/03/2021.
