Purchase of Supplies, Services, and Repairs:

Learning Objective of the article:

Explain the procedure of Purchasing supplies, services and repair
The procedure followed in purchasing productive materials should apply to all departments and divisions of a business. Purchase requisitions, purchase orders, and receiving reports are appropriate for accounting department supplies and equipment, the company cafeteria, the first aid unit, the treasurers office, the building service department, and the public relations, personnel, sales and engineering departments, as well as all other departments. If, for example, the accounting department needs new forms printed, a requisition should be sent to the purchasing department in the usual manner, and a purchase order should be prepared and sent to the printer.
In the case of magazine subscriptions, trade and professional associations memberships for company officials, and similar services, the official or department head may send in a requisition in a usual manner. A requisition, an order, and an invoice for all goods and services purchased are a necessity in properly controlling purchases.
Repair contracts on an annual basis for typewriters, calculators, electronic data processing (EDP) equipment, and some types of factory equipment may be requisitioned and ordered in the usual manner. In other cases, a department head or other employee may telephone for service and shortly thereafter may have a machine repaired and back in operation. In such cases, the purchasing agent issues a so-called blanket purchase order that amounts to approval of all repair and service costs of a specific type without knowing the actual amount charged . When the repair bill is received, the invoice clerk checks the amount of the bill with the head of the department where the repairs took place and then approves the invoices for payment.
The principle forms required in purchasing are the purchase requisition form and the purchase order form.

Purchase Requisition Form:

The purchase requisition originates with (1) stores or where house clerk who observes that quantity on hand is at a set ordering minimum, (2) a materials ledger clerk who may be responsible for notifying the purchasing agent when to buy , (3) a works manager who foresees the need for special materials or unusual quantities, (4) a research or engineering department employee who needs materials or supplies of a special nature, or (5) a computer that has been programmed  to produce replenishment advice for the purchasing department. For standard materials, little information other than the stock number may be needed, and the purchasing agent uses judgment concerning where to buy and the quantity to order. For other purchases requests, it may be necessary to give meticulous descriptions, blueprints, catalog numbers, weights, standards, brand names, exact quantities to order, and suggested prices. Below is an example of the purchase requisition:

Example/Sample of purchase requisition form:

Purchase Requisition				No. 07615 Mo | Day | Yr
To Purchasing Department
Deliver to _________________			Date Required___________________
			Dept No. ________________
			Acct. No. _______________
Suggested Supplier________________________________________________________________
Qty	Item No.	Description	Unit Price	Amount
Budget Control
Allowance for period ____		Balance Available___	Ordered By____
		Amt This Purchase___	Approved By___
		Remaining Balance___

One copy remains with the originating employee, and the original is sent to the purchasing department for execution of the request.

Purchase Order Form:

The purchase order, signed by the purchasing agent or other official, is a written authorization to a vendor to supply specified quantities of described goods at agreed terms and at a designated time and place. As a convenience, the vendors order forms may be used; but in typical practice, the order forms are prepared by the purchasing company, and the form is adapted to the particular needs of the purchaser. As a matter of record and for accounting control, a purchase order should be issued for every purchase of materials, supplies, or equipment. When a purchase commitment is made by mail, telephone, or a sales representative, the purchase order serves as confirmation to the vendor and places the required documents in the hands of those concerned in the purchasing company.
The purchases order gives the vendor a complete description of the goods and services desired, the terms, the prices, and the shipping instruction. When necessary, the description may refer to attached blueprints and specification pages. The original and an acknowledgment copy are sent to the vendor. The acknowledgment copy is a necessary form for contract procedure, because other copies are distributed. The vendor is asked to sign and return the copy to the purchaser, indicating that the order was received and will be delivered according to the specifications enumerated in the purchases order.