A purchasing system is a set of processes used to acquire goods and services for an organization. These processes include the following:
- Accept purchase requisitions from users
- Find and evaluate suppliers
- Negotiate prices
- Place purchase orders
- Monitor procurement cards
- Dispose of excess assets
A purchasing system is an essential control over the cash outflows of a business, so that only what is needed is actually acquired and purchases are made at reasonable prices.
A key input to a purchasing system is the production planning system, which can be used to automatically calculate what needs to be purchased and when; it is possible for the production planning system to automatically place replenishment orders with suppliers, completely sidestepping the traditional purchasing system.