The Procurement Schedule | Definition | Key Steps

Procurement is essentially about making smart purchasing decisions that keep a company running smoothly, efficiently, and profitably.¹ A business with a sloppy procurement process can waste money, deal with unreliable suppliers, and struggle with delays. But when done right, procurement helps companies save cash, secure high-quality goods and services, and stay competitive in the market.

So, how does procurement actually work, and how can businesses make it better? This article will explore the procurement process and its implementation strategies to learn how procurement can streamline your operational success and financial efficiency. We'll also talk about how Wise Business could help you save on cross-currency payments and integrate into your existing accounting software.

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What Exactly is Procurement?
At its core, procurement is the process of acquiring goods, services, or works from external sources. Companies need everything from office supplies to manufacturing equipment to outsourced customer support. But instead of going through different channels, they go through a structured process to ensure they’re getting the best value for their money.

A well-managed procurement process reduces costs, minimizes risks, and strengthens relationships with reliable suppliers. Without a solid procurement strategy, businesses might overpay for materials, experience supply chain disruptions, or, worst case scenario, get stuck with faulty products.

The Key Stages of the Procurement Schedule

Let's going over the key steps of procurement.

1. Identifying What You Need

Procurement starts with recognizing a need. The IT department may need new laptops, or the warehouse is running low on packaging materials, as an example. Once the need is identified, it’s crucial to clearly define what is required—down to the specifics like quality, quantity, and delivery timelines.

2. Finding the Right Suppliers

With the requirements in place, the next step is to find potential suppliers. This means conducting market research, checking reviews, and evaluating vendors based on reputation, experience, and pricing. The goal is to choose a supplier with the best quality, reliability, and affordability.

3. Requesting Proposals and Quotes

Once a list of potential suppliers is created, businesses send out a request for proposals (commonly abbreviated as RFP) or a request for quotations (RFQ). This step invites suppliers to compete for the contract, outlining how they can meet the business’s needs and at what cost.

4. Choosing the Best Offer

In this stage, businesses review the bids. Companies evaluate proposals based on pricing, delivery timelines, service levels, and overall value. It’s not always about choosing the cheapest option; it’s about balancing cost with quality and dependability.

5. Negotiating the Contract

Once a supplier is selected from the list of proposals, the two parties enter negotiation mode. This stage ensures that the terms and conditions benefit both sides, covering key information such as payment schedules, delivery expectations, warranties, and dispute resolution.

6. Placing the Order and Managing Delivery

With a signed contract, the company sends a purchase order specifying exactly what’s being bought, when it should arrive, and how much it costs. Once the supplier delivers, quality checks are performed to ensure everything matches expectations.

7. Making the Payment

Once the order is verified, payment is processed according to the contract terms. In some cases, businesses might use a staggered payment system to ensure quality control before making the final payment.

8. Reviewing Supplier Performance

Although it might seem like the payment is the final stage, the procurement process doesn’t actually end once the order is fulfilled. After entering into a contract with a supplier, businesses continue to evaluate supplier performance, tracking things like on-time delivery, product quality, and responsiveness. Suppliers who consistently meet or exceed expectations may secure long-term contracts. If not, the company may explore other options.

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How to Build a Stronger Procurement Strategy

Because the procurement process involves multiple key steps, it would be easy to assume that following them is all it takes. But, for your business to run smoothly, it’s important to implement those steps in accordance with a solid procurement strategy.

1. Develop clear policies

The first step in developing a strong procurement strategy is setting clear policies. That means creating standardized policies for approvals, spending limits, and supplier selection. A clear process ensures consistency, prevents unnecessary delays, and keeps everyone accountable.

2. Hire skilled procurement professionals

A great procurement process also depends on having a skilled team. Procurement professionals do much more than simply approving purchases—they negotiate contracts, find cost-saving opportunities, and manage supplier relationships. That’s why ongoing training is a must. Procurement teams must stay ahead by learning about industry trends, new negotiation tactics, and emerging procurement technologies. The more knowledge they have, the better decisions they make, ultimately benefiting the entire business.

3. Centralize operations

Technology is another factor. Gone are the days of managing procurement with endless spreadsheets and paperwork. Companies using e-procurement software can automate purchase orders, track spending in real time, and monitor supplier performance.

Instead of chasing down approvals and manually processing invoices, procurement teams can manage everything from one central system. Tools like SAP Ariba ³ and Coupa ⁴ take the guesswork out of procurement, helping businesses stay on budget, prevent errors, and streamline the purchasing process.

4. Develop strong supplier relationships

But let’s not forget about the human side of procurement—strong supplier relationships are just as meaningful as having the right tools. Procurement isn’t just about getting the lowest price; it’s about working with reliable vendors who consistently deliver quality products on time. Businesses that build long-term partnerships with suppliers often get better pricing, priority service, and extra flexibility when unexpected issues arise. Good supplier relationships are built on trust, communication, and fair negotiations.

It’s also important to remember that your procurement strategy should never be set in stone. While you should always have procurement policies in place, you should also be able to adapt those policies if (or when) they no longer serve you well. The market is constantly changing, business needs often evolve, and new challenges can arise. That’s why companies need to audit and optimize their procurement process regularly.

Keeping an eye on supplier performance, reviewing purchasing trends, and identifying areas for cost reduction ensures that the procurement workflow stays efficient. If a supplier isn’t meeting expectations or a process is creating bottlenecks, adjustments must be made. Procurement teams should always look for ways to improve, whether by renegotiating contracts, exploring new vendors, or upgrading their procurement technology.

A strong procurement strategy is about being proactive, not reactive. Businesses that take the time to refine their procurement approach will save money, reduce stress, and create a system that supports long-term success.

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How to Improve the Procurement Workflow

Improving your procurement process’ workflow is another key reason your strategy should evolve. Miscommunications, bottlenecks, and delays can turn a simple purchasing process into a frustrating, time-consuming ordeal. But improving workflow isn’t just about making things run faster; it’s about making your procurement process more flexible, efficient, and resilient.

1. Create visibility

One of the most significant ways to streamline procurement is by boosting visibility across all purchasing activities. If teams don’t have a clear view of supplier performance, order statuses, and budget tracking, small inefficiencies can spiral into larger issues.

2. Create a centralized dashboard

A centralized procurement dashboard can help businesses stay on top of everything in real time, preventing duplicate orders, unnecessary spending, and last-minute surprises. The more transparency you have, the easier it is to make informed, cost-effective decisions.

3. Cut down approval steps

Another major game-changer is cutting down on unnecessary approval steps. If every minor purchase has to go through multiple layers of approval, your procurement process could slow to a crawl. Instead of creating an unintentional obstacle course for every order, businesses should set clear spending thresholds, assign decision-makers, and use digital approvals. This way, low-risk purchases can be processed quickly while keeping important oversight..

4. Strong collaboration

Stronger collaboration with suppliers is another way to keep procurement running smoothly. The more procurement teams and vendors are on the same page, the fewer mistakes, miscommunications, and delays. Businesses can improve workflow by establishing clear communication channels, scheduling regular check-ins with key suppliers, and ensuring faster response times. If an issue pops up—like a production delay or a price change—having a good working relationship with suppliers means you’ll find out before it becomes a major problem, not after.

Key Takeaways

Procurement isn’t just about spending money—it’s about spending it wisely. A strong procurement process helps businesses cut costs, improve efficiency, and build reliable supply chains.

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Sources:

1. The Procurement Cycle: Sourcing From Beginning to End - Responsive
2. SAP Ariba Buying and Invoicing
3. Award-Winning E-Procurement Management Software | Coupa