Procurement process: the seven steps and where they go wrong

A procurement process is the path from someone needing something to the supplier being paid for it. In a small company it is often four informal steps and a card payment; the moment it involves other people's budgets, recurring commitments, or amounts that would hurt to lose, the informal version starts producing surprises — duplicate subscriptions, a supplier nobody vetted, an invoice for work nobody remembers commissioning.

The point is not procurement as a department. It is that spending is agreed before it is committed, and that the invoice arriving later can be matched to something that was agreed.

The seven steps of a procurement process

• Identify the need, stated as a requirement rather than as a product. "We need a way to track leave" invites options; "we need this specific tool" has already chosen one.
• Approve the spend against a budget, before anything is promised to anyone. This is the step that is skipped most often and costs the most.
• Select the supplier: quotes where the amount justifies it, checks proportionate to risk, and a written comparison for anything significant.
• Agree terms — price, scope, delivery, payment terms, notice period — in a document both sides signed.
• Raise a purchase order with the agreed amount and reference, so the commitment is recorded before the invoice exists.
• Receive and check: was it delivered, is it what was ordered, does the quantity match. Recording receipt is what makes the later match possible.
• Match and pay: purchase order, receipt and invoice agree, then the payment is released by someone other than the requester.

Scale the process to the amount. A single threshold turns everything into paperwork; three tiers work better — below a small figure the budget owner just buys it, above it a purchase order and one quote, above a larger figure competitive quotes and a signed agreement. Write the thresholds down, because a rule people cannot recite is a rule that gets applied inconsistently.

Making it work in a small company

1. Collect requests through one form rather than by message, so every request arrives with budget line, amount, supplier and reason.
2. Approve on a rhythm — twice a week is enough — so approval is a task rather than an interruption.
3. Keep an approved supplier list, and treat adding to it as a deliberate act with the checks done once rather than at payment time.
4. Number purchase orders sequentially and put the number on everything, including the email to the supplier. The number is what makes matching cheap.
5. Record receipt the day it arrives, by whoever received it. Reconstructing this later is guesswork.
6. Review recurring spend quarterly — subscriptions, retainers, licences. This is where the quiet money goes, and nothing in the process catches it after the first purchase.
7. Keep the agreement, the purchase order and the invoice together, so an audit or a dispute is a lookup rather than an excavation.

The three-way match, and why it matters

Purchase order, goods received note, invoice. When all three agree, the payment is almost certainly correct; when they do not, you have found either an error or something worse before the money left. This single control catches duplicate invoices, quantities billed but not delivered, and prices that changed between order and invoice. It is also the reason the purchase order step is not bureaucracy — without it there is nothing to match the invoice against, and approval becomes a judgement about whether an amount looks plausible.

In Ettex, requests fit Ettex Forms — one form with budget line, amount, supplier and reason, landing timestamped in a shared inbox with file uploads for quotes. The purchase order and the invoice live in Ettex Invoices: line items with quantities, rates, multiple tax rates and discounts, notes and terms fields where the PO and contract references belong, sequential auto-numbering with your own prefix, a client and supplier book so entity names stay consistent between documents, and statuses so nothing sits in an ambiguous state. Supplier records and contacts sit in Ettex Contacts, the agreement goes through Ettex Signature, and the policy with its thresholds belongs in Ettex Docs.

Plainly: Ettex has no procurement module. There is no approval routing by amount, no automatic three-way match, no supplier portal, no contract-renewal reminders, no spend analytics, and no punch-out to supplier catalogues. It gives you the documents, the numbering and a shared inbox for requests — the thresholds and the matching are a routine somebody runs. Above a few hundred purchase orders a month, buy software built for it.

Supplier risk checks belong before the purchase order, not after. A vendor due diligence checklist scaled to the supplier's exposure keeps the checks proportionate and the decision defensible.

Where procurement goes wrong

• Commitment before approval — the supplier is told yes, and the approval becomes a formality nobody can refuse.
• No purchase order, so the invoice arrives with nothing to check it against.
• Suppliers onboarded at payment time, when the pressure is on and the checks get skipped.
• One threshold instead of three, so either everything is paperwork or nothing is.
• Receipt never recorded, which removes the middle leg of the three-way match.
• Recurring spend never reviewed, so subscriptions outlive the projects that needed them.
• The requester also releasing the payment, which is the gap every control in the process exists to close.

The supplier side of the same transaction is worth understanding, because it explains the delays. An rfp response is a project with its own owners and deadlines at the other end, and a request arriving with two weeks to answer and forty questions will either produce thin submissions or none at all.

Two documents further down the chain decide whether the process actually controls anything. A three-way match ties the order, the receipt and the invoice together before payment, and a supplier audit is how the qualification decision gets tested after the first year.

A procurement process is worth exactly what its approval and matching steps are worth. Agree before committing, raise a purchase order, record receipt, match all three — and review the recurring spend that no process catches twice.