For many organizations, buying inventory, parts, and other goods are one of the most important aspects of the business process to get right each week. You need to always have the right items in stock, at the right times, and to avoid issues such as paying too much for goods, not getting them in quickly enough, having damaged stock sitting there rather than being returned to vendors, and more.
However, purchasing processes can get convoluted and incredibly time-consuming, particularly if you’re running a small business and don’t have dedicated staff members on hand to concentrate on looking after this area. If you’re in this position or want to find ways to save time, stress, and money, read on for some tips for streamlining purchasing you can follow today.
Identify Issues in Your Purchasing Process
Starters need to look at your current purchasing process analytically to find out what issues you have at the moment and where they’re stemming from. For example, are your staff members less productive than they could be because they have to wait for the equipment they need? Or are you spending too much money on inventory or the wrong items?
Perhaps your customers complain because you don’t get materials quickly enough to fulfill their orders, or the purchase orders you use may be lacking, or other types of paperwork could be causing a bottleneck. Once you have examined the process from end to end, you’ll be able to get an idea of what you can do better.
Determine Who Will Handle What, and Perhaps Increase Authority
Next, make sure everyone in the business is clear on who handles what when it comes to purchasing. Create a set of guidelines that break it down for people and ensure the team members responsible for different aspects of the process are aware of what they need to do and what kind of timeframe it needs to be done.
Also, often it’s worthwhile giving more people the authority to put through purchase orders. When you only have one or two people handling the task, bottlenecks can quickly crop up, and those employees can get stressed, resentful, and make mistakes. Avoid this by extending authority to a bigger range of people within the business.
To ensure this doesn’t lead to overspending, always set specific parameters for staff to follow, such as particular credit card guidelines and a set spending limit (you might want to keep this lower for newer employees or those less experienced with purchasing). You can also define what kinds of goods or services each particular worker is allowed to purchase, and you may want to limit certain employees to only using particular vendors.
Allowing more of your team to make purchases, particularly for regular items such as office supplies, gets necessary goods in stock more quickly, ensures you’re actually getting the items you need, and increases productivity. To make the process even smoother, create a company-wide purchase order document for employees to use. If you need help with this, check out this free printable purchase order template.
Create a Pre-Approved List of Vendors
Lastly, another way to streamline your purchasing process is to create a pre-approved list of vendors. Think about it: if your team members have to research and confirm vendors every time they want to purchase something and wait for their managers or the accounting department to look into the company, this wastes their time and makes them less efficient. It also means items may be out of stock for much longer, holding customer orders up.
However, if you regularly work with the same suppliers you know and trust to provide good pricing and excellent service, and who you might get vendor discounts with, it pays to get everyone to use them.
Create a document or online purchasing system with all the approved vendors listed, including all the relevant contact details, product brochures, prices, order forms, and the like, as required. Also, give these same suppliers a list of the various employees who can complete orders through them, or give workers a specific purchasing code.
Also, it pays to put together a ‘request for proposal’ template for your teams. They can then use these when they need to source a variety of bids on a job. Again, this will streamline the process quite quickly.