Corporate purchasing policy template

This template will help HR professionals create a purchasing policy that aligns with their organization’s goals and objectives. It covers essential aspects such as approved suppliers, price negotiation, and documentation requirements, thereby ensuring that all purchases are made in a consistent and ethical manner.

A corporate purchasing policy should include the following:

1. Approved supplier list: A list of authorized suppliers that have been vetted and are qualified to provide goods and services to the organization. This helps ensure that the organization is working with reputable suppliers and can negotiate better prices due to the volume of business.
2. Price negotiation guidelines: Guidelines on how to negotiate prices with suppliers, including when and how to use market research to determine fair market value, how to evaluate supplier bids, and how to negotiate contract terms and pricing.
3. Documentation requirements: Clear guidelines on the documentation required for purchases, including purchase orders, invoices, and receipts. This ensures that all purchases are accurately recorded and accounted for.

It is important to have a corporate purchasing policy in place to avoid fraud and abuse of company resources. Without a policy, employees may make unauthorized purchases or negotiate unfavorable deals, leading to financial losses for the organization.

Additionally, a policy helps ensure that the organization is working with reputable suppliers who can provide high-quality goods and services.

Step-by-step instructions on how to write your own corporate purchasing policy

1. Review existing policies: Research and review existing purchasing policies from other organizations to get a sense of best practices and what to include in your policy.
2. Identify key stakeholders: Identify key stakeholders in the purchasing process, such as procurement managers, financial officers, and department heads, and get their input on what should be included in the policy.
3. Determine approved suppliers: Determine which suppliers are approved to provide goods and services to the organization. This can involve researching suppliers and evaluating their reputation, quality of goods and services, and pricing.
4. Establish price negotiation guidelines: Establish guidelines on how to negotiate prices with suppliers. This can involve researching market rates, evaluating supplier bids, and determining the best negotiation strategies.
5. Define documentation requirements: Define the documentation requirements for purchases, including purchase orders, invoices, and receipts. This ensures that all purchases are accurately recorded and accounted for.
6. Include ethical guidelines: Include ethical guidelines that ensure employees act in the best interest of the organization and avoid conflicts of interest or fraud.
7. Review and revise: Review and revise the policy regularly to ensure it remains relevant and effective.
Sample corporate purchasing policy template:
[Organization name]

Purchasing policy template

1. Introduction

This purchasing policy outlines the guidelines and procedures for making purchases on behalf of [organization name]. It is designed to ensure that all purchases are made in a consistent and ethical manner, aligning with the organization’s goals and objectives.

2. Approved suppliers

The following suppliers are approved to provide goods and services to [organization name]:
[List of approved suppliers]

3. Price negotiation guidelines

All purchases must be negotiated in accordance with the following guidelines:
a. Market research: Conduct market research to determine fair market value before negotiating with suppliers.
b. Supplier bids: Evaluate supplier bids based on factors such as quality, price, and delivery time.
c. Contract terms and pricing: Negotiate contract terms and pricing that are favorable to the organization.

4. Documentation requirements

The following documentation is required for purchases:
a. Purchase orders: All purchases must be made using a purchase order that includes the supplier’s name, item(s) being purchased, quantity, price, and delivery date.
b. Invoices: All invoices must be reviewed and approved by the appropriate department head before payment is made.
c. Receipts: All receipts must be reconciled with the purchase order and invoice to ensure accuracy.

5. Ethical guidelines

Employees must act in the best interest of the organization and avoid conflicts of interest or fraud. The following guidelines must be followed:
a. Gifts and entertainment: Employees must not accept gifts or entertainment from suppliers that exceed $50 in value.
b. Confidentiality: Employees must maintain the confidentiality of all supplier negotiations and not disclose any information that could harm the organization’s interests.
c. Personal interests: Employees must not purchase goods or services for personal use or benefit.

6. Policy review and revision

This policy will be reviewed and revised annually, or as needed, to ensure it remains relevant and effective. All revisions must be approved by the [insert appropriate person/department]

Disclaimer: This policy template is meant to provide general guidelines and should be used as a reference. It may not take into account all relevant local, state or federal laws and is not a legal document. Neither the author nor Workable will assume any legal liability that may arise from the use of this policy.