Overview
Purchasing costs a company money in two ways. The obvious one is the price paid. The expensive one is everything around it: the rush shipment because nobody saw the stockout coming, the four departments that each ordered separately from the same supplier, and the invoice that was paid because it looked right and nobody compared it to what actually arrived.
Nama’s purchasing chain is built around those three, not around the order form.
The need, before it is an order
An item request is where a purchase starts: 500 kg of steel, 200 nails, 50 litres of paint for the production line next week, with the reason — a production order, a project, a stock replenishment — and the urgency. Requests are raised by the people who know they need something: planners, department heads, project managers, storekeepers. They then go through approval, where the question is not only “may we buy this” but “do we already have it” and “can it wait and go with the others”.
A consolidated purchase request is what answers that last question. It gathers several departments’ needs by supplier, category or urgency into one order worth negotiating over — which lowers the freight, raises the negotiating position and cuts the administrative work of many small orders.
Further upstream still, a purchase forecast estimates demand for an item over a coming period from a quantity source you choose, then suggests what to buy after deducting what is in stock and what is already committed. It is the difference between buying at standard delivery on a normal price and buying at air freight because production stops on Thursday.
Comparing on more than price
A quotation request goes out to several suppliers on identical specifications, so the replies are actually comparable. Each reply is recorded with its prices, promised delivery, payment terms and validity.
The price comparison then puts them side by side, item by item, with delivery against each. The decision that follows is deliberately not automatic, because price is not the only axis: reliability, quality, the cash-flow difference between 30 and 60 days of credit, and the relationship all belong in it. The comparison carries an approval so the chosen supplier is a decision on record rather than a preference.
The order, and what happens to it
The purchase order is the commitment: items, quantities, agreed prices, delivery terms and place, payment terms, and a reference number both sides can use. Once it is out, the system tracks its state as reality arrives against it — open, partially received, fully received, cancelled — so “what is still owed to us” is a query rather than a phone call. Where the order should not yet be binding, a proforma purchase invoice covers budget approval, preliminary sign-off or a letter-of-credit request.
Receiving what actually turned up
The truck rarely brings exactly what the order says. You ordered 100 and 95 came, or 105 came, or the right quantity arrived in the wrong specification, or one pallet is damaged. Each of those has a handling: accept part and keep the rest open, accept all, reject and return, or accept the sound goods and reject the damaged.
For anything critical, receiving is two steps: the goods land in an inspection area first, quality checks them, and only then does someone accept, reject or partially accept — which is why an inspection warehouse exists as its own type. Nothing enters available stock until it has passed.
Three-way matching, before anyone is paid
The supplier’s invoice arrives days later, and this is the control that pays for the system. Three documents are matched: what you agreed to buy (the order), what you actually received (the receipt), and what you are being billed for (the invoice). Quantities must agree or the difference must be explained, prices must match the agreement, and the arithmetic must hold.
Saving the purchase invoice posts it: inventory or expense debited, recoverable input tax debited, the supplier’s payable credited — and a payment schedule created from the payment terms, with the due dates that ageing and reminders then work from. Where the goods came without a prior receipt, the invoice can raise one so stock is not left waiting on paperwork.
And because the true cost of a purchase includes the freight, customs and clearance that arrive after it, those charges are distributed back over the receipt’s items as landed cost rather than dropped into an expense account where they stop being part of what the item cost.
The full chain — requests, consolidation, comparison, orders, receiving, inspection and matching — is documented in the purchasing journey and purchase forecast.
