Before diving into the procurement process, it is important to understand where this function stands in terms of financial management.  For any financial management system to function well, there needs to be a system of policies and procedures in place.  The procurement process is just a sub-part to the policies and procedures of an organization.  According to Zietlow (2007), this system is beneficial for multiple reasons:

1.  Policies help maintain communication of “standard operating procedures” between board members, staff, volunteers and donors.  They establish a procedure and can be referred to as needed.
2.  Policies also the micromanagement of organizations.  Provided that the executive director/chief executive officer cannot be present for every decision made, policies act as a vehicle “through which the board influences and governs the organization.
3.  Policies help with fraud prevention, risk management, investments, debt, employment and employee relations by making the organization more accountable and transparent.
4.  Policies also serve as a way for new board members and new staff or volunteers to help orient them to the organization.

"The most important aspects of proficient financial management in the nonprofit sector are the primary financial objective and the financial policies the organization uses."  (Zietlow, 2007)

The procurement process can be defined as being a process by which organizations go by in order to acquire all goods and services needed besides those provided by employees:  materials, supplies, equipment, furniture.  Procurement has the aim of purchasing these goods and services and "should be acquired in the appropriate quantity and quality at the place, manner and time desired at the lowest cost possible" (McKinney, 2004).  Although having the lowest cost is the most desired outcome, it is important to remember that the time efficiency of receiving the product and the quality are both just as important.

The following are responsibilities, objectives, attributes and steps to an efficient and general procurement procedure according to Jerome B. Mckinney (2004):

* To begin, the following are the responsibilities and objectives organizations should maintain for such a process:
o    Maintaining adequate supplies of materials at all times
o    Developing qualitiative performance measures to aid in evaluating the performance function
o    Working individucally and collectively (with vendors and using agencies) to achieve cost reductions
o    Conducting comparative cost-benefit studies to determine whether to undertake work in-ouse or to contract it out
o    Automating procedures and processes where this serves to promote efficiency and productivity
o    Develping and conducting training programs for buyers and supervisors
o    Employing team-buying and other appropriate arrangements that will facilitate more effective performance
o    Arranging for alternative supply systems and sources to minimize or avoid interruption in the delivery of public goods and services
o    Using a benchmarking system to achieve best results (McKinney, 2004, p. 169)


* Here are the attributes of an effective purchasing program:
o    A purchase-requisition system to communicate purchase requirements
o    A purchase-order system to communicate commitment to the vendor, the accounting department, the person who will receive the materials, and the requisitions
o    An updated list of employees who are authorized to request purchases, with specific dollar limits
o    A preaudit system with which to compare requisitions before issuing the purchase order
o    A well-functioning system for evaluating “bill” type purchases
o    A system to expedite overdue orders
o    Maintenance of a system to locate suppliers that meet specified requirements in terms of the most affordable price and delivery schedules (McKinney, 2004, p. 169)

* Although, as previously mentioned, each organization takes a different procurement process route to purchase equipment, the following is the typical procedure:
o    Specifying quantities essential to meet necessary requirements
o    Preparing purchasing requisitions
o    Selecting sources or advertising
o    Soliciting bids
o    Conducting informal bidding
o    Analyzing bids
o    Issuing purchas orders
o    Following up or expediting purchase orders (when required)
o    Receiving and inspecting goods or services
o    Making payments for goods (McKinney, 2004, p. 171)