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Decentralized Purchasing

Decentralized purchasing is purchasing done without the help or need of a centralized purchasing group.

Benefits of Decentralized Purchasing

The top benefits are:

    • Increased Savings: By decentralizing the purchasing process, organizations can often realize cost savings in both the short and long term. This can be achieved through increased competition and better negotiations with suppliers.

    • Increased Transparency: Decentralized purchasing increases the transparency of the purchasing process. All stakeholders can see exactly what is being bought, when, and at what price. This helps to eliminate the possibility of fraud or misappropriation of funds.

    • Reduced Risk: Decentralized purchasing reduces the risk of decisions being made by a single individual or entity. By involving multiple stakeholders in the purchasing process, each decision is evaluated from different perspectives and is more likely to be accurate and in the best interest of the organization.

    • Improved Efficiency: Decentralized purchasing eliminates the need for a centralized purchasing department or individual. This eliminates the need for additional personnel and overhead costs associated with a centralized purchasing process.

    • Increased Compliance: Decentralized purchasing also helps to ensure that all purchases comply with internal policies and external regulations.

Decentralization, when possible, is the least costly way to procure goods. Also, using top purchase order software products, like those from Aestiva, management oversight is retained because information posted is not siloed. Audit trails, transparency, and reporting ensure activity is easily seen by teams and management.

Organizations with decentralized purchasing typically procure goods twice as fast and with less than half the overhead. Single-supplier requisitions, also known as unapproved purchase orders, are often used since they can flip automatically into purchase orders once they are approved. Decentralized purchasing is fast becoming one of the most popular ways to manage purchasing.

Aestiva automates both centralized and decentralized purchasing processes.

Example Usage

"We shifted from centralized to decentralized purchasing after our procurement team retired."

See Also

Purchase Order Process, Purchase Order Receiving Process, Centralized Purchasing