one of important procedure & should be done early in the process, before offering quotes or bids

underestimate budget-> bring loss

overestimate budget -> reduce satisfaction of customer

if there any changes , must redo it

Purchasing department obtains pricing comparison on material order. Purchasers will compare the terms and pricing between multiple suppliers and negotiate with suppliers when necessary.

A request for quote (RFQ) is a document that’s often used in construction when contacting a supplier of goods or services such as construction materials to estimate how much project resources will cost.

should be used when one knows what product or service is needed, but need more information from various vendors to make the best decision based on company's needed.

Information About the Buyer and Vendor: The first part of any request for quotation is to add contact information for both the buyer and the vendor. This includes the company name, address, contact information, such as name, phone, and email, as well as the date the RFQ is issued and the deadline for a response.

Product: DescriptionDescribe the product goal and detail for the project. This allows the vendor to have a clear picture of what your final project deliverables will look like and how they’ll

Quantity: This is how many items you’ll want to purchase.

Unit Price: The unit price is how much one of the items will cost

Cost: This is the total price. It’s calculated by multiplying the unit price by the quantity.

Shipping Information: Finally, the shipping information isn’t only where the items should be shipped, but how you want them shipped, such as how they’re packed, what sort of transportation and payment details.

Engineer

Quality Control Department

Document Control Department

Primary Issuer: The supplier or vendor is commonly responsible for issuing the delivery order. This document accompanies the shipment of goods and provides instructions to the logistics or shipping department regarding the delivery.

Purpose: To detail the items to be delivered, the delivery address, and any special instructions. It ensures that the correct goods are shipped to the right location.

Accuracy Verification: It ensures that the details on an invoice match the purchase order and receiving report. This helps confirm that the goods or services billed were actually ordered and received, and that the amounts and terms are correct.

Fraud Prevention: By matching invoices with purchase orders and delivery receipts, companies can detect and prevent fraudulent activities, such as overbilling or billing for items not received.

Financial Control: It helps maintain tight control over expenditures, ensuring that payments are made only for goods and services that have been properly authorized and received.

Error Resolution: Invoice matching helps identify and rectify discrepancies, such as pricing errors or quantities that don't match, before payments are processed.

Budget Management: Accurate invoice matching helps ensure that spending is in line with budgets and financial forecasts.

systematic approach used by companies in identifying, evaluating, and choosing third-party product vendors or service providers.

Involves seven main stages, starting from determining the needs of the organizations and ending with managing the relationship with the supplier.

The entire process ensures that suppliers meet the organization’s specific needs and requirements for their operations.

Purpose: This document provides confirmation that the payment has been made to the supplier. It may include details such as the payment amount, date, method of payment, and invoice number.

Recipient: Sent to the supplier as proof that their invoice has been paid

Purpose: Remittance advice details the payment made and often includes a breakdown of which invoices or accounts the payment covers. It helps the supplier match the payment with their records.

Recipient: Sent to the supplier to aid in reconciling their accounts.

Purpose: A payment voucher is an internal document used to authorize and record the payment transaction. It often includes details about the invoice being paid, payment amount, and payment method.

Recipient: Maintained internally for financial records and audit purposes.

There is a risk that an order is unauthorised and not for business use.

To ensure that orders are only placed once authorised and vetted to ensure they are for business use.

1.1 There is a risk that goods ordered are not received, potentially leading to stock outs.

1.2 To ensure that all goods ordered are received.

2.1 There is a risk that faulty goods are accepted.

2.2 To ensure that goods are only accepted if they are of the correct quality.

Employees regularly update and review material requisition records

Clear communication between the project managers, site personnel and the procurement team to address any issues in materials

Supplier pre-approval to expedite the procurement process and ensure quality materials are sourced