What are Purchasing cycles?
A purchasing cycle depicts the processes that a company will take before purchasing a product. It begins with the recognition that a product is required, followed by the specification of the required quantities and the deadline for delivery.
Once a purchase requirement has been determined, the pricing and quality of various products and inventory stock from various suppliers must be examined before deciding where to obtain the commodities. After that, a purchase order is approved; in larger organizations, this may require approval from multiple people.
The conditions of the purchase contract are then negotiated between the company and the supplier. It may also be established at this point in the purchase cycle if this is a one-time sale or if the chosen supplier will be a long-term partner.
When the items arrive at the company, they are counted and verified for quality before being entered into the inventory management system.