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The terms purchasing and procurement interchangeably, but despite their similarities they do have different meanings.
Procurement involves the process of selecting vendors, establishing payment terms, strategic vetting, selection, the negotiation of contracts and actual purchasing of goods. Procurement is concerned with acquiring (procuring) all of the goods, services and work that is vital to an organization.
Purchasing is a subset of procurement. Purchasing generally refers simply to buying goods or services.
When we go to the food store we purchase our groceries.
When we research, source, communicate, negotiate, further negotiate & purchase products - we procure.
Purchasing is part of Procurement.
*Purchasing is Buying items, creating Purchase Orders, Follow up suppliers, coordinating deliveries of items to store and claiming warranty of defective or Dead on Arrival items, etc.
*Procurement is sourcing and selecting, evaluating supplier and products based on quality, prices, delivery terms, payment terms and warranty period, etc. It also include product and stock controlling, etc.
Procurement is a whole process of procuring of a product or services whereas purchasing is an activity of procuring of an end product or a service.
Procurement is to broad concept of buying or hiring process and purchasing is a narrow or stipulated area of buying process.
Procurement Involve complete process of purchase such as bidding, comparing, negotiating and finalizing etc and purchasing can be a direct purchase from the market without any comprision or quotation.
Purchasing is just to buy a product, but Procurement based on complete analysis like, where to buy, how to buy and in which price to buy. Even in sub category Quality and Made is also very important.
Procurment and Purchasing are interchangable, but Procurement includes strategic and planning issues whereas Purchasing includes the activity of procure somthing
Procurement deals with the sourcing activities, negotiation and strategic selection of goods and services that are usually of importance to an organization. Purchasing is the process of how goods and services are ordered. Purchasing can usually be described as the transactional function of procurement for goods or services
Procurement involves the process of selecting vendors, establishing payment terms, strategic vetting, and selection, the negotiation of contracts and actual purchasing of goods. Procurement is concerned with acquiring (procuring) all of the goods, services and work that is vital to an organization.
Procurement Process
Identification of Requirement, Authorization of Purchase Request, Approval of Purchase Request ,Identification of Suppliers, Inquiries Receipt of the Quotation, Negotiation ,Selection of the Vendor, Purchase Order Acknowledgement, Advance Shipment Notice,Goods Receipt, Invoice Recording, Payment to Supplier, Purchase Order Acknowledgement ,Advance Shipment Notice, Goods Receipt
Purchasing is a subset of procurement. Purchasing generally refers simply to buying goods or services. Purchasing often includes receiving and payment as well.
Steps in purchasing
Purchase Order Acknowledgement, Advance Shipment Notice, Goods Receipt, Invoice Recording ,Payment to Supplier
To perhaps simply the answer for you, think of procurement as a strategic function where lets say the personnel identify vendors, and ultimately shortlist the sources of goods/services, and purchasing as a tactical function where you are handed down the requirements to act upon (execute).
I have noted that several companies do not differentiate between the two functions, and in other places these functions overlap.
