Question

Discuss the importance of procurement on a company’s financial reporting and impact on savings. Identify the different financial documents and how procurement activities/decisions impact the financial reporting

Answer 1

Procurement is one of the core functionalities of the business. This is so because procurement helps in defining the quality of the final product developed by the company. If the raw materials have not been procured effectively and in a timely manner, timely implementation of the production process may not be fruitful.

Some of the ways in which the procurement process can be considered critical for a company’s financial reporting and overall cost saving:

• Procurement helps in procuring quality raw materials, thereby facilitating the production of quality products and facilitating overall business
• Supplier company relationship gets facilitated which aids negotiations and cost savings
• After sales of the company is quite good as the overall quality of the product gets facilitated