As NGOs receive funding, implement projects and expand their offices, they will be required to make purchases of goods and services. Ideally, it is better to draw up a plan for making such purchases and also outline it in the financial management policy.
Procurement, Stock & Inventory
Purchasing
The purchasing function involves:
- Identification of needs, for goods and services,
- Identification of costs to cover the needs for those goods and services,
- Identifying the suppliers, procuring estimates (at least three)
- Negotiating favorable trading terms with them,
- Placing an order.
- Receiving the goods and/or services and paying for them
- Preparation of accounting and archiving expenditures.
Identifying the Supplier
The purchasing function involves:
- Credibility of the supplier in terms of being able to supply the requirements and in time
- Cost effectiveness of the goods supplied
- Quality of goods supplied
- Supplier should meet all necessary formalities in connection with its status as per the rules and regulations of the Government.
- Supplier must be able to supply all the good in the requisition/or of the specification prescribed in the purchase order
- Must be local, reliable and known
- Must be able to supply large quantities if necessary
- Past performance
- Availability of supplier
- Reputation of supplier