{"id":76498,"date":"2020-08-27T18:47:58","date_gmt":"2020-08-27T13:17:58","guid":{"rendered":"https:\/\/simpledocsbu.wpengine.com\/?p=76498"},"modified":"2022-11-21T19:28:06","modified_gmt":"2022-11-21T13:58:06","slug":"10-must-have-documents-in-your-procurement-process","status":"publish","type":"post","link":"https:\/\/www.revv.so\/blog\/sales\/10-must-have-documents-in-your-procurement-process\/","title":{"rendered":"10 Must-Have Documents to Secure Your Procurement Process"},"content":{"rendered":"\n

Making the right purchase within a stipulated time frame is a challenging task for procurement teams across businesses. There are many documents that are generated during the procurement process. Not having these documents in place and ready to use, can de-accelerate your purchasing cycle. These documents are the means of communication between buyers and suppliers as they convey the products or service requirements and how the requirements are met. This means that you should either have the documents ready with you or have a well-defined process in place to create these procurement documents on a need basis.<\/p>\n\n\n\n

What are the essential procurement documents that every business must have?<\/h3>\n\n\n\n

The following list comprises documents used in the procurement process<\/a> (buy-side) that you must possess to streamline your processes and experience smoother business operations.<\/p>\n\n\n\n

Purchase Order<\/strong><\/th><\/tr><\/thead>
A purchase order<\/a> also known as PO is an official document issued by the buyer to the seller. This document holds the confirmation to purchase specific goods and services and conveys the buyer\u2019s intention to commit to paying the seller for the same. POs simplify the purchase process by improving accuracy, enabling better budgeting, and ensuring timely delivery.<\/td><\/tr>
Why is it essential?<\/strong>
\u2022 Outlines exact order details
\u2022 Information on arrival date of the order
\u2022 Easier to track orders
\u2022 Helps to avoid audit problems with a conclusive audit-trail
\u2022 Legally binding to providing protection to both the parties<\/td><\/tr>
Key elements<\/strong>
\u2022 Quantity of items (goods\/services)
\u2022 A detailed description of items (SKUs or model number)
\u2022 Price per unit
\u2022 Date of purchase
\u2022 Payment terms
\u2022 Delivery date and location
\u2022 Billing address<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

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Purchase Agreement<\/strong><\/th><\/tr><\/thead>
Purchase agreements<\/a> are legal contracts that outline the terms and conditions related to the sale of goods. The agreement mainly focuses on the sales of goods rather than services. It covers the transaction for the sale of nearly any type of goods. Generally, the agreement is drafted for transactions that are over $500, but they can be used for smaller transactions as well. It is commonly referred to as a purchase contract or sales contract.<\/td><\/tr>
Why is it essential?<\/strong>
\u2022 Forms acceptable agreement between buyer & seller
\u2022 Helps to determine what the buyer is entitled to

Note: In case of a poorly drafted purchase agreement where ambiguity ensues, the determination will be held against the writer of the contract (the buyer), benefitting the seller. This concept is called \u2018Contra Proferentem\u2019.<\/a><\/td><\/tr>
Key elements<\/strong>
\u2022 Info on the type of sale (products or goods involved)
\u2022 Provisions for agreement amendment or revisions
\u2022 Terms of delivery & shipping (if applicable)
\u2022 Provisions in event of legal disputes
\u2022 Price and quantities of sale
\u2022 Dates for the fulfillment of conditions and requirements
\u2022 Duration of the agreement<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
Service Level Agreement\/SLAs<\/strong><\/th><\/tr><\/thead>
SLAs<\/a> are legally binding agreements between the buyer and the service provider. It provides the statement of objectives, list of services to be covered and the definition of responsibilities to be carried out. The document also lists the services and the service standards that the provider is expected to meet on the day of delivery.<\/td><\/tr>
Why is it essential?<\/strong>
\u2022 Defines the level of security
\u2022 Easier to manage other party\u2019s expectations
\u2022 Defines the performance characteristics of the service to be provided
\u2022 Provides metrics to measure the performance<\/td><\/tr>
Key elements<\/strong>
\u2022 Description of services
\u2022 Service tracking and reporting procedure
\u2022 Performance metrics
\u2022 Provision for termination
\u2022 Payment terms ( defining compensation for redressing issues, failure to meet the standards)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

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Master Service Agreement\/MSA<\/strong><\/th><\/tr><\/thead>
MSAs<\/a> is a contract entered by two parties during a service transaction. The agreement details the expectation of both parties. It allows both parties to spend time and discuss the terms of the deal. This will allow MSA to govern the overall deal and act as an umbrella document for SLAs (and other similar documents) in case of revisions, amendments, or disagreements.<\/td><\/tr>
Why is it essential?<\/strong>
\u2022 Useful for long-term arrangements
\u2022 Assist in decreasing the chances of litigation
\u2022 An extensive document that contains all the required contractual clauses
\u2022 Legally binding – protects the parties to the agreement<\/td><\/tr>
Key elements<\/strong>
\u2022 Description of services
\u2022 Deliverables (Each party\u2019s responsibility, Review procedure for deliverables, Consequences, and implications)
\u2022 Tenure of the agreement
\u2022 Terms of payment
\u2022 Confidentiality clause
\u2022 Indemnity clause
\u2022 Termination clause
\u2022 Limitation of liability
\u2022 Intellectual property rights
\u2022 Warranty and support information
\u2022 Insurance and security requirements
\u2022 General provisions (will include the boilerplate clause)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
Request for Proposal\/RFP<\/strong><\/th><\/tr><\/thead>
A request for proposal is a formal document that is structured in a way to get specific vendor information that includes pricing details too. You can announce the project through a request for proposal document and solicit bids from contractors who will help in finishing the project.<\/td><\/tr>
Why is it essential?<\/strong>
\u2022 Provides short and long-term goals for business
\u2022 Reflects on the negotiation strategy
\u2022 Select proposals based on solution and price

Note: The RFPs should not be overly detailed to hinder the third party\u2019s creativity and not be very less on information that leaves room for ambiguity.<\/td><\/tr>
Key elements<\/strong>
\u2022 Details about the project or task at hand (business needs)
\u2022 Evaluation process
\u2022 Describe the selection process – performance measures
\u2022 Request for a cost breakdown
\u2022 The due date for submission<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\t\t
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Request for Information\/RFI<\/strong><\/th><\/tr><\/thead>
Request for information document helps to obtain general information from the vendor, goods, or product. This document is just a request and is not legally binding to either of the parties. It is sent usually before an official requisition for items.<\/td><\/tr>
Why is it essential?<\/strong>
\u2022 A general overview of the current market
\u2022 Faster method to gather information
\u2022 Helpful if you are in the early stage of the buying process
\u2022 Draft effective RFPs with the information<\/td><\/tr>
Key elements<\/strong>
\u2022 Company overview
\u2022 Details of the product or service required
\u2022 Guidelines on response procedure
\u2022 Timeline for the response
\u2022 Clarification points (Any specific requirements)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

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Invitation for Bid\/IFB<\/strong><\/th><\/tr><\/thead>
IFB is used in situations when the product or service offered is barely different. The only big differentiator is the price. A competitive method where vendors submit their prices for the offering. Invitation for bids is useful for projects that are predictable like when the requirements to provide the end product are clearly defined.<\/td><\/tr>
Why is it essential?<\/strong>
\u2022 Provides standardized information to all bidders
\u2022 Establishes strict minimum requirements to avoid compromise on quality
\u2022 Zero negotiations with awarded bidder over price concerns<\/td><\/tr>
Key elements<\/strong>
\u2022 Overview of the company
\u2022 Requirement details
\u2022 Basic information about the project
\u2022 Submission guidelines (Withdrawal, late bids, modifications)
\u2022 Evaluation method and criteria
\u2022 Timeline for response<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
Supply Agreement<\/strong><\/th><\/tr><\/thead>
A supply agreement establishes the terms according to which the seller will supply the goods, products, or services to the customer. The party drafting the contract should ensure that the terms are communicated clearly to ensure that the end product, goods, or services are handed to the customer quickly involving less complication.<\/td><\/tr>
Why is it essential?<\/strong>
\u2022 Ensures that business requirements are met on time
\u2022 Lays the foundation for a profitable relationship between supplier and buyer
\u2022 Some agreements are drafted with a specific end date<\/td><\/tr>
Key elements<\/strong>
\u2022 Information on parties to the agreement
\u2022 Minimum quantities of purchase and sale
\u2022 Inspection and acceptance
\u2022 Pricing and payment terms
\u2022 Legal & contract clauses
\u2022 Time, date & place for delivery of product or service
\u2022 Boilerplate clauses<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
Reseller Agreement<\/strong><\/th><\/tr><\/thead>
In a reseller agreement<\/a>, the vendor grants the right to the reseller to enter into contracts with the customer. The reseller agrees to sell products on behalf of the vendor or wholesaler.<\/td><\/tr>
Why is it essential?<\/strong>
\u2022 Contractually the vendor or wholesaler is not bound by the actions of the reseller
\u2022 Vendor or wholesaler can get into multiple reseller agreements<\/td><\/tr>
Key elements<\/strong>
\u2022 Appointment of reseller
\u2022 Purchase order with provision for modifications
\u2022 Reseller responsibilities
\u2022 Price, discounts, and resale prices
\u2022 Acceptance and rejection of product delivery
\u2022 Product materials<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

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Purchase Requisition<\/strong><\/th><\/tr><\/thead>
This document is mainly used for internal purposes wherein a purchase requisition is shared with a department manager or purchase officer, informing them of any purchase made on behalf of the company. With this document, you are not ordering something but getting approval to do so.<\/td><\/tr>
Why is it essential?<\/strong>
\u2022 Useful in an efficient audit trail for purchasing
\u2022 Coordinate reporting procedures with the accounting department<\/td><\/tr>
Key elements<\/strong>
\u2022 Details of the supplier
\u2022 Budget information
\u2022 Who authorized the purchase
\u2022 Date of procurement<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The cure to your procurement sores<\/h3>\n\n\n\n

Jean Moore, 32, is a newly appointed procurement manager at Ray Solutions, Ltd. She has been working in the procurement department for over five years. Her work was mainly focused to connect with vendors and suppliers to negotiate prices over emails and phone calls.<\/p>\n\n\n\n

\"Change<\/figure>\n\n\n\n

But after getting promoted to the role of Procurement Manager, she wishes to improve the procurement procedure by streamlining the documents used in the – process. She has already worked with the current process and knows the issue that crops up at the grassroots level.<\/p>\n\n\n\n

\"A<\/figure>\n\n\n\n

The earlier procurement process followed by the department was old school. The procedure involved a lot of paper trails and manual work at times leading to duplication. And the stacks of documents piling up and filling the file cabinets were looking close to unmanageable. Imagine finding a document from that stack on time.<\/p>\n\n\n\n

\"Overcome<\/figure>\n\n\n\n

Procuring your document the Revv way!<\/h4>\n\n\n\n
\"A<\/figure>\n\n\n\n

The more number of documents, the messier the management. Jean can achieve her goals with the help of Revv document management solution –<\/p>\n\n\n\n