What is the difference between a procurement agent and a purchasing agent?
Procurement is the cradle to grave approach and starts with the identification of need and continues until the need has been fulfilled and the contract is closed, or also in case the need no longer exists. The procurement agent is responsible for identification of requirement, authorizing the purchase request, approval of purchase request, procurement, identification of suppliers, negotiation, selection of a vendor, purchase order acknowledgment, advance shipment notice, goods receipt invoice recording, 3-way match and payment to suppliers. A procurement agent also facilitates communication and administration between one department to the other.
A purchasing agent is responsible for purchase order acknowledgment, advance shipment notice, goods receipt, invoice recording, 3-way match and payment to suppliers. The agent will also take care of finding a good supplier or vendor, buying materials, cost control, negotiate the price, and follow the purchasing procedure and regulation. Procurement embraces activities even before the establishment of the purchase contract. While ‘procurement’ is a proactive approach as it works with the user department in identifying its needs; ‘purchasing’ is reactive to the internal needs.
Procurement and purchasing are often used interchangeably, but in reality, purchasing is just one aspect of the wide procurement function. Procurement is basically an umbrella which includes several core business functions and purchasing can be found under it. Purchasing is a subset of procurement and simply refers to buying goods or services. It is the process of how goods and services are ordered and are the transactional function of procurement of goods or services. Procurement, on the other hand, is more relational and deals with establishing and maintaining fruitful and constructive long-term relationship with suppliers.
