Accounting Dictionary

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Procurement

Definition: Procurement is the activities required to obtain goods and services from suppliers. The standard procurement steps are:

1. Department submits a purchase requisition for a specific item.
2. Purchasing agent locates several possible supplier candidates.
3. Purchasing agent selects the supplier having the best combination of price, quality, and delivery time, and may negotiate some terms of the purchase.
4. Purchasing agent issues a purchase order to the selected supplier.
5. The supplier delivers the item, which the receiving staff matches to the purchase order copy supplied by the purchasing agent.
6. The receiving staff delivers the received item to the department that originally requisitioned it.