Page 236 - F1 - AB Integrated Workbook STUDENT 2018-19

Chapter 15

Purchasing (procurement)

The purchasing/buying function is responsible for placing and following up orders. It
co-ordinates with the accounting department as follows:

The accounting department will work with the
Establishing credit purchasing department to liaise with suppliers

terms to obtain a credit account and to negotiate
acceptable credit terms.

The accounting department can advise the
Prices buying department of the maximum price that

should be paid to maintain margins.

Payments may be approved by the buying
Payment department but are made by the accounting
department.

Order details will be input by the buying
Data capture, e.g.
orders department and details passed to the
accounting department.

The purchasing department will consult with the

Inventory inventory section of the accounting department
to determine the quantity of items already in
stock and therefore the quantity required.

The accounting department will consult with the
Budgeting purchasing department on likely costs in

preparing budgets.

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