Purchase vs Procurement

Difference Between Purchase vs

Procurement
A purchase will generally be referred to simply as buying
services or goods. Purchase mostly includes payment and
receiving as well. There are fundamental or most basic
steps of purchasing the goods or services and it should be
employed frequently as a best practice in all the
businesses. Procurement is a broader concept and in fact, it
includes purchasing as its part. Procurement is
comprehensive, and this will generally include everything
from selecting a supplier or the vendors until the negotiation
of those contracts. All services or goods that are used by
the firm or the company should be procured. Purchasing is
merely a section of this whole process, and it will involve
payment to the other firm or the company for services or
goods.

The steps involved in purchase are:

Purchase Order (PO) Acknowledgment

Advanced Notice of shipment
Receipt of Goods
Recording of Invoice
Three-way matching
Payment to the supplier

The steps involved in procurement are:

Identification of the requirement

Authorization of the Purchase Request
Approval of the Purchase Request
Procurement
Identification of Vendors
Inquiries or Receipt of the Quotation
Negotiation of the contract
Selection of the Supplier
Purchase Order (PO) Acknowledgement
Advanced Notice of Shipment
Receipt of Goods
Recording of Invoice
Three-way matching
Payment to the supplier
Head To Head Comparison Between Purchase
vs Procurement(Infographics)

Below is the top 5 difference between Purchase vs

Procurement
Key Differences Between Purchase vs
Procurement

Both Purchase vs Procurement is popular choices in the

market. let us discuss some of the major Difference
Between Purchase vs Procurement

The key difference between the two: Procurement, as

stated earlier, is a broader term which includes
designing, processing, sourcing, negotiating and fixing
standards, whereas purchase is a simple and a concise
term which shall incorporate providing of the money for
products or the goods. It can be concluded that
purchase is one of the aspects of procurement.
 Another key difference between Purchase vs
Procurement is the fact that purchase is considered
more of a casual and an informal term, to the flip side
procurement will be considered as a more of a formal
business term.
A purchase is a type of process that we partake every
day. We would go out and purchase the stuff we want,
whether the stuff is cheap or small and expensive or
big. However, to the contrary, the term procurement
will be mainly used in the corporate or say in the
business.
Purchase or buying is an action and hence it is a verb
whereas procurement is a noun to the contrary.

Purchase vs Procurement Comparison Table

Below is the 5 topmost comparison between Purchase vs

Procurement

The Basis of
Comparison
Between Purchase Procurement
Purchase vs
Procurement
Procurement
encompasses end-
to-end supply
 chain management
strategies which
include negotiating
contracts,
Purchasing is a
sourcing, and
simple and concise
acquiring services
term that will
or work from
incorporate
external sources,
providing money
goods, raw
for a product or
Basic Definition materials, then it
goods. It can even
will follow through
be said that
to make sure
purchasing is a
contracts will be
small and one of
fulfilled according
the aspects of
to the terms of the
procurement.
contract. The goal
or the objective of
the procurement
are spending
control, cost
savings, and
workflow
efficiency.
A broader term
A simple and
that will include
concise term that
designing,
will incorporate
processing,
Context giving the money
sourcing,
for a product or
negotiating and
goods as stated
fixing the
earlier.
standards.
Procurement
generally will
Incorporate the
aspect of
 Purchasing term specifications
generally will development,
Incorporate administration of a
What it purchasing or say contract, supplier
incorporates buying of goods or market research,
an object, i.e. marketing,
paying the money negotiation, value
against the goods analysis, buying
or the object. activities, and
control of the
inventory, the
traffic, receiving
and the stores.
Procurement
Purchasing is a
includes the term
subset of the
Is it inclusive purchasing as part
process of
of its process as
procurement.
explained above.
The
procurement
process took
place around
William five or six
usually months.
purchases his The biggest
groceries on savings are
Sundays. most likely to
The Linda’s come in the
are form of
purchasing a procurement.
new home. The
We need to procurement
purchase a department
new bike. had to face
Few Examples
There was an cutbacks
 ongoing recently.
online sale, July has
we bought recently
from there procured a
many items. huge order of
I need to high-quality
purchase the designer
books for this bags.
final year. The procured
shipment of
small parts
will be
arriving
coming week.

Conclusion – Purchase vs Procurement

Because the purchase is a kind of process within the

overarching process of the procurement, both the purchase
of the term vs procurement is commonly used as
interchangeably. In the world of the business, the practice
of using the same terminology in either printed materials or
in the conversation is a routine task, although it is
often perplexing, and it must be avoided. Procurement will
deal with the negotiation, the sourcing activities, and the
strategic selection of services and the goods that are
usually of more importance to an entity. Purchasing is the
process of how services and the goods will be ordered.
Purchasing can usually be defined as the transactional
function or activity of procurement for services or the
goods.

A procurement strategy will generally seek to streamline

those operations by defining every aspect of the supply
chain management and setting the protocols for the
purchase requisition, approval process, automated spend,
and the most optimal delivery options.

Where a purchase will begin and will end with the

acquisition of services and the goods, procurement is an
ongoing and continuing detailed design function or the
process which makes informed purchase decisions which
are based upon the available data, and that should be kept
up to date. The purchasing department will continually seek
and will monitor in order to improve and optimize the
supplier relationships, forge connections, and will also try to
find out the ways to lower supply chain management cost
and further minimize the losses of the entity.

This has been a guide to the top difference between

Purchase vs Procurement. Here we also discuss the
Purchase vs Procurement key differences with infographics,
and comparison table. You may also have a look at the
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