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In a firm with a good system of internal control, all purchases of machinery, equipment and materials must go through the purchasing department. The department that wishes to purchase something cannot directly order it, but instead creates a document called a requisition, which must be approved by the appropriate person (i.e., the one with the authority to approve the purchase). The requisitioning department sends the approved requisition form to the purchasing department.
The purchasing department should be familiar with various outside vendors, and it will locate the vendor who is offering the requisitioned item for the lowest possible price. It will order the goods from that vendor. It will then issue an approved purchase order and send it to the chosen vendor as the vendor's authorization to ship the goods. The purchasing department sends a copy of the purchase order to Accounts Payable and to the receiving (warehouse) department that will accept the purchased goods when they arrive. In a good system, the quantity of order goods does not appear in the receiving department's copy, forcing that department to manually count the number of items received, to confirm independently that the number of items received equals the number ordered. When the goods are received, the receiving department creates a receiving report and delivers the goods to the requisitioning department (and it should require the requisitioning department to sign off on the report, indicating that it received the items it requisitioned).
When the vendor sends its invoice to accounts payable, that department will match that invoice to its copies of the purchase order and the receiving report, to make sure that everything on the invoice has in fact been properly ordered and received by company personnel before the invoice is authorized for payment.
The purchasing department is a control on the purchase of items to be paid for by the company. It prevents company personnel in different departments from ordering items without authorization and at too high a price, and it helps to ensure that all authorized purchases are captured by the firm's accounting system.
What else can I help you with?
What is the relationship between purchasing department and other functional departments in an organisation?
The purchasing department plays a crucial role in an organization by procuring goods and services needed by other functional departments. This department works closely with departments such as finance, operations, and inventory management to ensure that the organization's needs are met efficiently and cost-effectively. Effective communication and collaboration between the purchasing department and other functional departments are essential to streamline processes, manage costs, and maintain smooth operations.
What is the relationship between sales department and other departments?
if i would have known i could have written in my exam
What are the relationship between stores and other department?
Stores and other department are working hand in hand, be it stores with the accounting department or stores with the sales department etc. We don't work individually and that is why businesses exist for such reason. Please let me know if you would need more clarifications
An expense that does not require allocation between departments is a?
direct expense
The relationship between consignor and consignee?
The relationship between the Consignor and the Consignee is that of a principal and agent.
Relationship between purchasing department and production department?
Describe the relationship between the purchasing and production of a manufacturing company
What is the relationship between stores department and purchasing department?
The purchasing department buys the raw materials used by the production department so there has to be close cooperation between the two. Purchasing must know in advance what the production department will be in need of so that the items can be provided in enough time.
What is the relationship between purchasing department and sales and marketing department?
the relationship b/w purchasing, marketing and sales
What is the relationship between purchasing and Engineering department?
check
What is the relationship between human resources and purchasing department?
Both human resources and purchasing are departments that spend money in order to provide resources to a business, but one spends money on people, and the other spends money on supplies.
What is the relationship between housekeeping and purchasing department?
The acquisition of cleaning supplies.
What is the relationship between purchasing department and finance department?
The purchasing department and finance department have a close relationship within an organization. The purchasing department is responsible for acquiring goods and services needed by the company, while the finance department manages the organization's financial resources. The finance department works closely with the purchasing department to ensure that purchases are within budget, approved, and align with the overall financial goals of the company. Effective communication and collaboration between these departments are essential to maintain financial stability and operational efficiency.
What is the relationship between purchasing department and other functional departments in an organisation?
The purchasing department plays a crucial role in an organization by procuring goods and services needed by other functional departments. This department works closely with departments such as finance, operations, and inventory management to ensure that the organization's needs are met efficiently and cost-effectively. Effective communication and collaboration between the purchasing department and other functional departments are essential to streamline processes, manage costs, and maintain smooth operations.
What is the relationship between sales department and other departments?
if i would have known i could have written in my exam
What is the relationship between purchasing functions and marketing department?
The answer is that marketing and purchasing both uses money. and etc. Such as if i buy an outfit im purchasing something and the marketing department would get benefits.
What is the relationship between purchasing department and accounting department?
The power of the purchasing department is greatly influenced by the success of the accounts department. Without accounts to produce revenue, the resources needed for the function of the purchasing simply do not exist. In simpler terms: No money=No purchases.
What is the relationship between marketing and other departments?
The marketing department must rely on the other departments to develop their strategies for how they market the products. If the marketing department did not have access or communicate with other departments, it would not be able to advertise and market their products.
