After approval, a formal list is made that is known as the purchase order with one more level of approval which is sent to the vendor. A list of requirements is made and then it is approved by a senior authority within the organization. It is the logical subdivision, where it is determined what material or services are required by the company, and which supplier can fulfill the requirement. This is the first step in a procurement cycle. The important steps in a procurement cycle are as follows − Every organization performs some common sequential steps to procure material in the right quantity at the right price. The steps required to procure material forms the procurement cycle. The process of buying materials and obtaining services from vendors or dealers is called procurement.
Every organization acquires material or services to complete its business needs.
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