How to Purchase Stationeries for your office?

In small concerns, it is generally seen that the office manager purchases stationery. If there is a separate department for purchases, then all the stationery will be purchased by it.

The department head must have a good knowledge of making purchases of durable and standard stationery in an economical way. Stationery may be stored and reserved on the basis of consumption. Large firms usually adopt the following ways to purchase the items.

(a) By Tender

The office manager or the authorized person first decides the quantity of items to be purchased. After having decided the items, he must advertise in newspapers inviting tenders for certain quality and quantity. The last date for submitting tenders will also be published.

By seeing the advertisements, suppliers will quote the prices, sometimes along with samples. After receiving the tenders, the concerned person opens them, compares the prices of different suppliers and usually accepts the lowest tender.

Order will be placed with the firm, which has quoted the lowest rate. Orders may be placed for the whole quantity or in parts. This is being done on the basis of agreement.

Advantages of Tender System

1. Time is saved by ordering the required quantity in bulk otherwise, every time enquiry has to be made as to the price and quality. Thus, time is saved.

2. Generally, prices go up. Moreover, there is a tendency to accept the lowest tender. Hence suppliers quote their lowest price, and the supply of items may be lasting for a year or for a contracted period. Therefore the contract price is generally lower than the rate prevalent in the market. Moreover, money can be saved on such a purchase.

3. In tender system, even one can order for items in installment supply, so as to get fresh items.

4. Supplier will generally stick to the customers by supplying standard items. Supply of bad quality will be an obstacle for long standing relationship.

5. Fraudulent practices are minimized, because no officer can show any undue favor to a particular supplier.

Disadvantages of Tender System

1. If the rates go down within the contracted period, the firm cannot place the order with outsiders. Thus even if the prices go down; the agreed prices will have to be paid.

2. The best quality of items may not always be available in the tender system, because the lowest price means the lowest standard.

(b) By Quotations

The system is similar to that of tender. In quotation system of purchase, the officer writes to different firms (suppliers) instead of advertising it in the newspapers. Suppliers will be informed of the quality and approximate quantity of items to be purchased.

Sometimes, samples will also be sent for clear understanding. In this system also, orders may be placed with the firm that quotes the lowest rates. The merits and demerits of quotation system are similar to those of tender system.

(c) Through Salesmen or from Manufacturers

There are many occasions when sales representatives or salesmen approach customers to book orders. Such people will also carry samples to show and literature of full information. A particular manufacturing firm may produce a particular brand.

It is very difficult to compare its cost with the cost of similar items produced by different firms as qualities may differ. It is likely that in many cases the supply of items will not be of the same standard as the samples shown at the time of placing the order. But purchase can be made through representatives or salesmen of standard supplier; otherwise it will be a waste.

(d) From Single Supplier

Certain firms do not purchase stationery items by calling quotations or tenders. They simply send orders to a particular supplier, who will supply the required items. Orders will be placed on the condition that the supplier will supply standard articles and will charge only reasonable prices.

In the field of business, blind belief is always not safe, because, it is possible that supplier will charge higher rate than the rate prevalent in the market. Therefore periodical check up is essential to measure the honesty of the suppliers.

But, if the firm is standard one usually reasonable prices are charged, sometimes lower than the market rates, in order to attract the customers. This type of purchase is allowed only for urgent needs and for a small amount. If the amount is heavy, quotation system or tender system is to be followed.

Merits of Single Supplier

1. An intimacy is created; thereby goodwill is created.

2. Customers will be given priority in time of scarcity.

3. Generally, since all the purchase is made from one supplier, normal prices will be charged by supplying standard items; otherwise business may be affected.

4. The supplier takes the responsibility of supplying stationery items of good quality at a cheaper rate.

Demerits of Single Supplier

(1) The position can be exploited if the purchasing officer is self-interested.

(2) If the single firm fails to supply the required items, it may be difficult to purchase them from outsiders.

Purchasing System in Firms

Different departments of the concern intimate their requisition to the purchasing officer. The purchasing officer goes through all the requirements and makes out a complete list of items to be purchased. He will also keep constant touch with the departmental heads to know the opinion about stationery items issued to them.

If the report is favorable, he proceeds further. He makes out a list of all items required and invites tenders or quotations. Specifications of items will be given to the suppliers. A few days after the prices are known, the firm accepts the lowest quotation by taking into account the quality required.

If the terms and conditions are agreed upon, order may be placed with the firm, stipulating the mode of delivery period, payment, etc. On receipt of all the articles, at the store, entries are made in the stock register.

Centralised Versus Decentralised Purchasing

Centralized Purchasing

In big concerns, generally the purchasing of stationery and store keeping are centralized the centralized purchase means collecting the requirements, deciding the quality, enquiring ordering, maintenance of records and issuing them properly to the departments that need the stationery items. Purchase is the responsibility of the centralized department.

Decentralized Purchasing

Decentralised purchasing is an arrangement in which processes of purchasing are decentralised. Each department or section of the organisation has to make its own arrangement for the purchase of supplies. That is, the authority and responsibility for purchasing have been decentralised.

The decision to centralise or decentralise purchasing of stationery and supplies depend upon the benefits and drawback of centralised and decentralised purchasing.

Benefits of Centralized Purchasing

(1) Stores are in one department, and so better supervision and control can be exercised.

(2) Layout of stores can be arranged in a better way.

(3) Greater specialization in purchase is possible.

(4) Discount, credit facility etc., can be had on huge purchase.

(5) Better utilization of store equipment and store space, is possible.

(6) Standardization of stationery in all departments can be drawn up.

Drawbacks of Centralized Purchasing

1. Separate staff has to be appointed to look after the work which involves cost of maintenance of the records and issue of stationery. This is added to the overhead cost.

2. It is experienced that delay is likely to happen in the supply from the centralized store, because of procedures to be followed before getting the stationery.

Benefits of Decentralized Purchasing

1. The purchasing procedure can be shortened.

2. It has flexibility and cuts delay.

3. Purchasing can be made according to exact specifications.

4. Overhead cost of centralized system is eliminated.

Drawbacks of Decentralized Purchasing

1. Standardization cannot be practiced.

2. The benefits of buying in bulk cannot be enjoyed.

3. Specialization in purchase is not possible.

Purchase Procedure of Stationery

1. Purchase requisition

2. Calling quotations

3. Selecting suppliers

4. Placing orders

5. Receipt of items

6. Maintenance of accounts

7. Storage

8. Safeguarding

Purchase Procedure

Whether the purchasing is centralized or decentralized, it is essential to have a scientific procedure for the purchase of stationery and supplies in the office. The following procedure may be followed:

(a) Purchase Requisition:

Purchase requisition is a printed form which is generally used as a formal request to the purchasing department. The purchase department receives purchase requisitions from various departments of the organization.

Purchasing requisition may be written in duplicate, the original being sent to the purchasing person and other being retained by the person initiating the request.

(b) How much to Order:

The purchase in-charge should decide the quantity of order very carefully. No doubt, large orders bring trade discount and cash discount. But sometimes, they result in heavy waste because of over buying as there are certain articles which deteriorate when they are held in stock for too long a period.

For example stamp pads, carbon papers, typing, ribbons etc. dry out. The purchasing authority should determine the quantity to be ordered at one time after taking in view the following factors:

(i) Usual consumption during a period.

(ii) Storage space available.

(iii) Finance available.

(iv) Cost of storage and capital investment.

(v) Quantity of safety stock.

(vi) Risk of obsolescence.

(vii) Minimum and maximum quantities to be held in stock.

(viii) Savings to be effected on bulk purchase.

(xi) Time needed to get supplies.

Obtaining Quotations:

After the receipt of purchase requisition, the source of stationery and supplies is to be selected. Generally, the purchasing department keeps a list of suppliers for all needed items.

The quotation will be called for by keeping in view the benefits to the concern lowest price, better quality, quick delivery, reliable supplies according to specifications etc. After receiving the quotations, they are opened at the time prescribed and a comparative statement is prepared.

Terms and conditions of supply are negotiating with one or more suppliers on a scrutiny of the price lists and examination of samples.

(d) Placing the Order:

After comparing quotations and terms of delivery the actual order is placed with the selected firm in a prescribed form. The order indicates all particulars of the various items, quantity required, the price agreed upon, terms of payment, mode of delivery and delivery date. The order should be signed by the officer of the purchasing section or office manager.

(e) Follow up:

Once an order has been placed, it would be proper to follow it up so that supplies are received in time. If there is any irregularity or delay in delivery, reminders must be issued to the supplier. The name of defaulting suppliers should be struck off from the list of suppliers.

(f) Receipt of Stationery:

In large concerns, items are supplied along with the delivery note in duplicate to the customers. As soon as the items are received, the clerk concerned verifies the items with the delivery note. After that one copy of the delivery note is returned to the supplier.

Credit bill will also be received either along with the delivery of items or after a day or two. When the bill is received, it will be tallied with the items. If the entries relating to the items are correct, then entries are made out in the records in respective pages.

If all the items are satisfactory, the bill duly signed by the purchasing officer is sent to the accounts department for further action. Sometimes, goods received notes are prepared by the store-keeper instead of passing the bills.

Standardization of Office Supplies

Standardization of office stationery and supplies means securing uniformity in the specification of articles. The process of standardization involves laying down the exact size, dimensions, quality and other specifications relating to each item of supply to be required. Procurement of various items of office supplies involves a consideration of the purpose for which they are to be used.

Benefits:

Standardization has the following advantages:

1. It helps the purchase officer to know the exact requirements of various departments of the firm.

2. It ensures efficiency in office operations by increasing the speed of work.

3. It brings economy in purchasing by buying in bulk and reducing the number of purchase orders.

4. It avoids lose which may be caused by the purchase of sub-standard supplies.

5. It ensures uniformity in the specification of various items.