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Centralized Purchasing

Centralized purchasing is purchasing that runs through a purchasing group. With centralized purchasing, requisitions for goods and services go through an approval process after which they are sent to a centralized purchasing group. The purchasing group selects the suppliers, often utilizing requests for quote. They also issue the final purchase order and own the purchasing and delivery process.

Centralized purchasing is different than decentralized purchasing where there is no purchasing department to manage each purchase. Centralized purchasing is well suited for situations with complex buying processes involving, for instance, the need for compliance documentation, greater levels of project specification, and coordination.

Centralized purchasing systems often utilize multi-supplier requisitions (purchase requests), sourcing RFQs, perhaps RFX's (requests for proposal, information, verification, quotation, etc), and purchase orders. The best purchase order software, like the systems provided by Aestiva, are configured around the business process of the purchasing group since they vary from organization to organization.

Example Usage

"Our procurement used centralized purchasing. We have three buyers and a coordinator."

See Also

Purchase Order Process, Purchase Order Receiving Process, Decentralized Purchasing

Purchasing Note

Aestiva deploys both centralized and de-centralized purchasing systems based on the needs of the customer.