Purchasing of Material- Simplified
What Is Meant by the Purchasing of Materials? Purchasing of materials refers to the procurement of materials for a price. It is usually handled by a specific department (e.g., purchase manager in the procurement department), particularly in large companies. A purchasing department can function effectively if: It is organized on a centralized basis Full co-operation between purchasing department and other departments is assured A close relationship exists between the purchasing department and the accounts department The purchase manager is technically qualified and sufficiently experienced A proper procedure is clearly set out and strictly adhered to Purchasing is a critically important and specialized activity in manufacturing companies. Materials account for a considerable portion of production costs. As such, the purchase manager in such a business is responsible for spending more of its money than anyone else. Any errors on the part of the purchase manager, therefore, ma...