Procurement Processes in Companies: The Ultimate Guide

What if we told you that the key to saving thousands of euros a year lies in procurement processes?

When properly managed, companies can reduce expenses, save time, and even minimize errors that could lead to significant financial losses. But how can they be optimized? What is the best way to manage them?

Let’s dive into these processes in detail to answer those questions.

Meaning of “procurement process”

The term “procurement process” can have different meanings: there are procurement processes within companies, which focus on acquiring goods or services, and there are procurement processes related to consumer behavior when making purchases, i.e., from a marketing perspective.

In this blog post, we will focus on the first case—the processes handled by procurement departments.

What are procurement processes?

Procurement processes refer to the steps companies take to acquire the goods or services needed to operate efficiently. These can include raw materials, machinery, supplies, services, and more.

Regardless of their functions, all companies must follow one or multiple procurement processes.

The procurement process is not just about placing an order and receiving it. It is a more complex system that includes several steps: from planning what is needed and selecting the right supplier to obtaining internal approval and ensuring everything is received in the agreed-upon conditions.

These steps are not carried out by just anyone but rather by a designated individual or team responsible for the process.

For example, if you own a shoe store, you will have multiple procurement processes: purchasing shoes, buying store furniture, acquiring bags, labels, and other materials for online shipping, etc. Each of these requires a different procurement process

Why is the procurement process important?

Procurement processes have a significant impact on a company’s financial performance.

To begin with, the price at which products or services are acquired directly affects profit margins: if you buy at a higher price, your profit decreases, and vice versa. A well-managed procurement process ensures that you are obtaining the best value for money.

The quality and immediate availability of products are also crucial. A good procurement process ensures that customers always find what they need.

Beyond financial results, efficient procurement processes strengthen relationships with suppliers.

Are procurement and acquisition processes the same?

Although the terms “procurement process” and “acquisition process” are often used interchangeably, they are not the same. Simply put, procurement is a subset of acquisition.

While procurement focuses on the steps companies take to obtain and store goods and services, acquisition goes further. It includes market research, supplier lists, approval processes, relationship management, negotiations, and more.

Procurement ensures daily operations run smoothly, whereas acquisition establishes long-term strategies for cost savings, efficiency, and quality.

Stages of the procurement process in companies

Although each company is unique and may have different stages, most follow these general steps:

Identifying Needs

The process begins when a company identifies a need for goods or services. At this stage, the company defines what is required, in what quantity, and with what specifications.

Searching and Evaluating Suppliers

Once the company knows exactly what it needs, it searches for the best supplier. Key factors usually include quality, price, delivery times, and supplier reputation.

Requesting Quotes

After selecting potential suppliers, the company requests quotes detailing prices, payment terms, and delivery times.

Negotiation and Supplier Selection

With multiple quotes in hand, the company compares and negotiates terms. Once the best price-value offer is determined, the supplier is selected.

Internal Approval and Purchase Order Issuance

To formalize the agreement, a purchase order is issued. This document details what is being purchased, in what quantity, at what price, and under what conditions.

Receiving, Verifying, and Storing

Upon delivery, the responsible team verifies that everything meets the agreed-upon conditions before storing the goods appropriately. For services, they ensure all agreed-upon terms are met.

Invoice Approval and Payment

Once everything is in order, invoices are reviewed and approved for payment according to the agreed terms.

Optimizing the procurement process

Some key actions to improve your procurement processes include:

Measure, Measure, Measure

Auditing each step of your procurement process and continuously seeking improvements is crucial. You don’t need to optimize everything at once—small changes can make a big difference.

Setting Key Performance Indicators (KPIs) helps measure efficiency. Common metrics include delivery times, average purchase cycle time, and cost savings.

Control and Planning

Stock shortages or excess inventory signal poor procurement control and planning, leading to financial losses and production delays.

A solid inventory management system ensures timely product replenishment based on pre-established criteria.

Following the example of the shoe store, in a good planning you will have established that you will replenish a model and size of shoes when you have, for example, two left in the warehouse.

The more automated these tasks are, the more likely it is that these problems will not occur.

Keep an Eye on Competitors

How do other companies manage their procurement processes? Do they use manual methods or specialized tools? Do they work with different suppliers?

Analyzing competitors can offer valuable insights to refine your own procurement strategy—always adapting, not copying.

Use Technology

Implementing procurement software automates repetitive tasks such as purchase order issuance and inventory management, significantly reducing errors.

Though it requires an initial investment, the efficiency and cost savings quickly justify it.

In fact, 56% of CEOs acknowledge that procurement software pays for itself within the first year.

Special Procurement Processes

Certain procurement processes have unique considerations:

Just-In-Time (JIT) Procurement

JIT purchases are made just before products are needed, based on real demand rather than forecasts. While highly effective in industries like automotive manufacturing, JIT requires reliable suppliers and precise planning to avoid production delays.

International Procurement

When purchasing outside of Spain, companies must check if products from outside the EU meet regulatory requirements and consider customs duties.

Public Procurement

Government entities follow strict procedures to ensure transparency and fairness among suppliers. Public procurement processes are often complex and highly regulated.

Changes in Procurement Processes in 2025

Recent legislative changes, particularly Spain’s “Crea y Crece” law, will impact procurement processes. Electronic invoicing will become mandatory for most commercial transactions. According to Article 12, “all businesses and freelancers must issue and send electronic invoices in their commercial relationships with other businesses and freelancers.”

Additionally, the Verifactu regulation will require immutable invoice records. Any invoicing software used must comply with this regulation.

How to Choose the Right Procurement Software

Now that you understand procurement processes, the next challenge is selecting the right software.

To comply with new regulations, ensure your software meets Verifactu standards—noncompliance can result in fines of up to €50,000. It must also support electronic invoicing.

Beyond compliance, look for key features such as:

• Integrations: It should integrate with your ERP to avoid data duplication and streamline processes.
• Automation: The more tasks it can automate, the less time you’ll spend and the fewer errors you’ll encounter.
• Scalability: The software should adapt to your company’s growth and needs.
• Artificial Intelligence: AI-powered tools can extract invoice data, predict demand, compare suppliers, and more.

At Docuo, we offer procurement software that meets all these requirements. Discover it today!