Procurement documents and what they do.
Procurement documents are an essential part of the procurement process. This article discusses some of the more common ones, what they’re for, and how they’re used.
Delve into the vital role and functionality of procurement documents in the procurement process.
What is a procurement document, exactly?
What is a procurement document? Procurement documents can be paper or electronic, but today, they are more commonly digital. They are formal, specific requests for a business to facilitate an equitable bidding process and protect the seller from claims of unfair procurement practices. In nearly every case, procurement documents require the signature of an authorized representative of the buyer and seller.
When is the process of document procurement used?
Many industries use procurement documents in their day-to-day business. You’ll commonly see procurement documents in fields like project or operation management.
Procurement documents are commonly exchanged in supplier relationships and other business-to-business deals. They’re a great way to clearly and legally manage external relationships between businesses, especially when larger deals are involved.
Why is procurement documentation important?
Because it’s so formal, producing procurement documentation can seem tedious. Here are some reasons to still follow through and use it in your business deals:
- Legal protection. Procurement documentation is legal documentation and can have your back if things ever get sticky.
- Clarity and transparency. Representing your negotiations and requests in these formal documents can prevent confusion and keep business flowing smoothly.
- Accountability. Having everything on paper (or electronically documented) helps businesses hold each other to their promises.
- Account keeping. It’s much easier to access and reference formal documentation when it comes time for accounting.
Common types of procurement documents in business.
Your business type determines which procurement documents you’ll need most often. Purchasing goods and services requires a different set of documents than soliciting work from contractors. Learning which document to use and how to use it will save you time and money. As we walk through the significance of procurement documents and what they do, it’s essential to understand how a well-crafted request for proposal for procurement can play a pivotal role in the document procurement process.
Below is a list of common procurement documents used in business today:
- Request for proposal (RFP). This document invites suppliers or contractors to provide a proposal for goods or services. The RFP often includes plans, specifications, and other information needed for the supplier to prepare their bid.
- Request for information (RFI). An RFI is used by both buyers and sellers. A buyer sends an RFI to prospective sellers to learn more about their product or service. In turn, a seller can use an RFI to get clarification about a buyer’s RFP or RFQ.
- Request for quotation (RFQ). This document is appropriate when a buyer knows precisely what they want to purchase. When you use an RFQ, there is usually little information included — other than quantity and part or model number — since no discussion or alternates are needed.
- Letter of intent (LOI). An LOI is issued by the buyer to the seller, indicating that they intend to proceed with the purchase pending the seller meeting insurance or other requirements.
Use tools to manage procurement documents securely.
A secure electronic signature tool is a must for working with procurement documents. Beyond secure signatures, a PDF can easily be password-protected or encrypted for your business’s security.
