Module 5: Leases, Purchasing and Vendor Management

Types of commercial leases and licences and key terms associated with each arrangement Purchasing, leasing and renting equipment for your business and how to establish the true cost of purchasing equipment How to draw up an effective purchasing strategy for your business Finding and selecting the most appropriate suppliers and vendors for your business Summary/What you will learn: Types of commercial leases and licences and key terms associated with each arrangement Purchasing, leasing and renting equipment for your business and how to establish the true cost of purchasing equipment How to draw up an effective purchasing strategy for your business Finding and selecting the most appropriate suppliers and vendors for your business Great tips for negotiating with vendors.



5.1 Types of commercial lease



As a Facilities Manager, you will no doubt either be responsible for or have some accountability towards the lease arrangements of your particular building or premises. Below, we have summarised the characteristics of some of the main types of occupation arrangements and what you need to know about each. Leases and Licences A lease is essentially an arrangement to grant a tenant with exclusive use of a particular building or property for the purpose of running their business, for a set period of time and for a set price. A lease provides the tenant with specific rights regarding the premises, specifically the right to transfer it to a third party, subject to specific conditions. We will focus our attention more specifically on leases as the more common arrangement for occupying a commercial property. Alternatively, a licence also grants permission to occupy a building, but unlike a lease, the occupier doesn't benefit from exclusive possession and is not able to transfer the licence to a third party. What's more, there is no requirement for the landlord to provide the tenant with a fixed period of occupation. No minimum or maximum term exists for commercial leases and it is therefore up to the landlord to determine the most suitable length of lease for his building. Very long term leases of 999 years for example, do exist and are usually provided for a one-off, lump sum payment, rather than usual rent at market rate. Shorter term leases of 10 to 15 years are more common, as they provide flexibility for both parties to assess the suitability of the arrangement in the medium term and also allow the landlord to reassess pricing, where necessary. Generally, rent will be set at the market rate for these lengths of leases. There is a particular statutory clause which often applies to commercial leases called “security of tenure”. This clause means that the lease will not finish at the end of its contractual term and instead, the tenant should automatically be offered a new tenancy by the landlord. The only exception to this is if the landlord has reasonable grounds for not offering a new lease. Landlords can choose to amend this regulation prior to the lease commencing, by going through a particular process and many landlords choose to do so, to protect their own interests. Early termination of the lease can generally occur if the tenant breaches certain terms of the contractual agreement, such as non-payment of rent. Another example of early termination can be by a third party, although this is not common. For example The local authority may serve notice on a commercial lease if they wish to compulsorily purchase the property for a new land development. Compensation would be payable, if this were the case.




5.2 Ways of acquiring equipment for your premises




In this section, we will discuss the pros and cons of the three main methods of obtaining the equipment needed for your premises, be it office furniture, IT and telephones, machinery, stationery, etc. These main methods are outright purchasing, renting, or leasing. Renting Advantages:- With a short term rental agreement, you will have the flexibility to only pay for the equipment on the basis of when you use it, meaning that you won't have to pay fixed rental charges for equipment that you don't need or use regularly. Most of the additional costs, such as repair and maintenance, are paid for by the owners, meaning fewer variable and unforeseen costs for you to bear. You benefit from the flexibility to rent on an ad-hoc basis that suits you, such as peak periods, or when you need specialist equipment for a particular project for example. Disadvantages:- It is usually the case that it is more expensive to rent equipment on a short-term basis than to lease or buy it, due to the flexibility that renting affords. Availability issues can sometimes cause you problems - for example, if you are not able to give enough notice to the supplier, the equipment that you need may not be in stock when you require it, causing you possible setbacks. Purchasing Advantages:- You don't need to worry about availability issues as you do with renting, as the equipment that you need will always be ready for when you need it. If, after weighing up how often you are likely to make use of the equipment, you feel that you would save money by purchasing it for a one-off cost, you could potentially save a considerable amount of money. You may also find that there are tax benefits from purchasing your own equipment. Disadvantages:- Additional and unforeseen costs, such as repairs, insurance and depreciation, can add a considerable amount to the initial fixed cost of purchasing the equipment, so make sure that you estimate and factor these costs in at the early stages. If you don't end up using the equipment enough to justify its purchase price, plus the extra costs mentioned above, it could work out costlier. Leasing Advantages:- Leasing can often be an effective compromise between renting and purchasing, giving you the benefit of having the equipment always to hand, without outlaying the full purchase cost. Disadvantages:- Leasing usually costs more than buying the equipment outright and you usually have to pay interest costs. Fact Spending by local authorities on IT and technology procurement reached £463m in 2017 - an increase of 75% year on year. Source: Arvato and NelsonHall survey 2016.



5.3 Equipment costs




If you do decide to go down the purchasing route for some of your equipment, it is helpful to understand how to accurately estimate the costs involved. You can either look at the unit cost or the hourly cost, to enable you to draw comparisons between different types of equipment or to work out whether it is cheaper to buy, rent, or lease. Note that there are two components which make up the total costs involved in purchasing equipment - operating costs and ownership costs. Ownership costs These are usually fixed costs and include the following:- Initial outlay - this is essentially the full purchase price of the equipment, plus the costs of having it delivered and assembled, where necessary. Cost of the investment - this is either the rate of return on company investment if purchased outright, or the cost of interest if the monies to fund the purchase were borrowed. Other costs - examples are licences or taxes associated with owning the equipment, storage costs, etc. Operating costs These are usually variable and include the following:- Power/fuel costs -this cost relates to the price of powering the piece of equipment through electricity, gas, petrol, etc. This cost can be difficult to estimate, as it relies on a number of regularly fluctuating factors such as the cost of fuel itself (subject to changes in the price of raw materials, tax, inflation, etc), plus how efficient the equipment is. Repair and maintenance costs - examples include regular servicing of IT equipment, fixing and repairing broken equipment, etc. Insurance premiums - purchasing expensive equipment is likely to have an impact on your insurance premiums. Activity 1 Estimated time: 15 minutes Imagine that you are the Facilities Manager for a brand new office block, housing three small administration/sales companies. Draw up an overarching purchasing strategy, detailing the following:- The main equipment and products that you need to purchase. Whether any could be leased or rented instead. How to shortlist your suppliers and what to look for.



5.4 What is a purchasing strategy?



A purchasing strategy is a structured way in which to buy the goods and services you need for your business by researching and choosing a group of vendors with whom you can build a long term relationship on mutually agreeable terms. There are a number of reasons why establishing a good purchasing strategy is much more beneficial than purchasing goods and services on an ad-hoc and unstructured basis, as follows:- Offering a vendor a longer term purchasing relationship often means that they are more likely to offer you a good deal on price or quality. Working with a smaller number of vendors means that you will hopefully develop a trusting working relationship, meaning that you can rely on them to stick to the terms of the agreement in relation to delivery times, quality, cost, issues and complaints, etc. It gives you good negotiating power with vendors. It enables you to make clear comparisons between what is being offered by different providers.




5.5 Steps in the purchasing process




Planning Before you make a start on purchasing anything, you should carefully consider your current and future needs. These may include:- The different types of equipment/goods that you need to buy. The quantities that you need to buy them in. Which items you need to purchase on a one-off or rare basis (such as office desks, for example) and which you will have an ongoing requirement for (such as stationery). Whether you have requirements for a particular quality, style, brand, material, etc. Any specific requirements which may make your purchasing more specialist. How quickly you need the goods. Researching potential suppliers and asking for quotes Following the planning that you have undertaken above, the next step is to choose the supplier(s) from whom to purchase. As part of this process, you will need to compare price, quality, delivery, company reputation and product availability across different vendors, before choosing which to purchase from. Your shortlist of suppliers should give you a quotation, detailing the items that you wish to purchase, along with their cost. Gathering quotations is a simple way of comparing the services of more than one vendor. Placing your orders/drawing up of contracts and Service Level Agreements When decided on a supplier, the usual etiquette is to let them know verbally and then issue them with a purchase order. Drawing up a more formal contract for services or a Service Level Agreement (SLA) can be a good idea, if you envisage a longer lasting relationship with that particular vendor. Refer back to Module 4 for more information about what to include in such arrangements. What are purchase orders and invoices and why use them? You have probably used both of these documents in the past, but it is useful to give you an overview of their purpose in relation to facilities management. A purchase order is a document which is produced by the buyer of goods and given to the seller of goods and lists the items which the buyer has agreed to purchase for an agreed price. It also details the other agreed terms, such as payment, delivery, returns, etc. A contract between the buyer and seller is created, after the buyer has accepted the purchase order generated by the seller. The main benefit of purchase orders is that they provide a level of protection for both parties in the transaction. From the buyer's perspective, it means that the terms of the sale are all laid out in writing and therefore, there is confirmation of what product or service they can expect - and for what price. For the seller, the purchase order finalises the buyer's commitment to purchase the goods or services at the agreed terms, to minimise any future disputes or issues, such as non-payment. An invoice is the document sent from the seller to the buyer to request payment after the goods have been dispatched and received. The invoice lists the goods that have been sold, the method of payment and the payment terms - usually 14 or 28 days from the date of issue of the invoice.




5.6 How to select your suppliers




What to look for in a supplier Naturally, you will have different requirements from your vendors, depending upon the type of product or service that you are buying from them and the specifics relating to your particular business and its priorities. For example If you work as the Facilities Manager for an IT company, you may favour suppliers who are able to quickly turn around your orders and provide exceptional after-sales support. This is why it pays to carefully consider the unique requirements of your business, in advance of going out to market to look for suppliers. Generally speaking, there are some key factor to consider, as follows:- Price Of course, price is absolutely one of the most important parts of the equation. Simply put, a vendor's prices must be competitive in order for you to consider buying from them in the first place. However, a more useful phrase is probably “value for money”, as the lowest price on the market is not necessarily the best option, after factoring quality into the mix too. Different business and different departments have different budgets, so make sure that you are clear on how much money you have to spend before you start and then it is well worth shopping around to compare prices and offers between competitors. If you are able to offer regular business to a vendor or buy products in bulk, you may benefit from a lower unit price - if not, ask! We will discuss negotiating strategies with suppliers, later in this module. Quality Your main objective in the purchasing process is to buy the best quality products or services for the best price available - and a price that is acceptable to you and within your budget. Quality, however, is a subjective term and does not always mean the same thing to everybody. Do not necessarily believe advertising which states that one particular product is better quality than another - do your research and involve experts in the field, where necessary. Also remember that, just because a particular product commands a higher price, it does not automatically mean that it is better quality. Great customer service You should be confident that your supplier will always communicate clearly and in a timely manner with you and will be committed to resolving any issues or queries promptly. Reliability Securing a great product for the best price means nothing if you cannot rely on the supplier to stick to the terms of your agreement and get the basics right, such as providing you with the product when they say they will, billing you correctly and dealing with any issues fairly and promptly. A good working relationship Partnerships with suppliers are more likely to succeed if you share similar commercial values and ways of working, etc. Think about the things that are most important to you in business and make sure that your suppliers work in the same way that you do. Reputation and security You may feel more confident working with a vendor who has an established track record in the market and comes with genuine recommendations from other customers. That said, newer suppliers may be more interested in offering superior deals, to get you on board and push their reputation in the marketplace.




5.7 How to find a supplier





First of all, revisit your purchasing strategy to work out how many suppliers you are looking for and for which products or services. As we have said, a lot of this will depend on the particular circumstances of your business. For example You may need to utilise the services of lots of different specialist suppliers from which to source individual products of the best quality, for the right price. Alternatively, you may choose to work with a smaller number of suppliers who can provide you with everything that you need. In this situation, you are probably more likely to benefit from discounts by giving the suppliers more regular business, plus there is the increased possibility of building a mutually beneficial and long term relationship with each other. The downside could be that they cannot source all of your requirements effectively. Here is a summary of the steps to be taken, when choosing your suppliers:- Thoroughly research suppliers in your given area, drawing up a final shortlist of any of interest. Ask your shortlisted suppliers for quotations. Compare the quotations of different suppliers in the marketplace. Choose a supplier and negotiate terms and conditions with them. Negotiating terms and conditions with a supplier Negotiating with suppliers is paramount to achieving the best deal from them. In fact, you may need to negotiate on one or a number of different areas, in order to find the right terms for your business, which could include obvious elements, such as price, but also other contractual terms, such as delivery, payment terms, after-sales support, etc. There are two factors that you should carefully consider in advance of starting negotiations with a supplier, to set you up for success:- What are your specific negotiating priorities? Trying to negotiate on every aspect of a supplier's terms would not be very wise and would leave your negotiating unfocused and unlikely to succeed. In this way, it is important that you reach a decision on which areas you are willing to compromise on and which are potential “deal-breakers” for you. What is your preferred outcome? Before entering negotiation, think about your end points, such as your preferred price, but also the highest price that you would be willing to pay. This will add structure to your negotiation and will minimise the risk of you walking away without a good deal. Good tips for successful negotiation Effective negotiation is a skill in itself, learned from practice. As a Facilities Manager, it is very likely that you will be involved in the negotiations with suppliers, but you may not have had experience doing this in the past, or not know where to start. If your company is large enough, you may benefit from a specialist procurement team, who can undertake all or part of this responsibility alongside you. If not, it is certainly worth taking some time to think about your negotiating style and strategy in advance of dealing with your suppliers. Don't be afraid of giving counter offers to a supplier when negotiating on price, before settling on a final, agreed price. The supplier may not budge and you may end up paying the original price in full (if you are happy with it, of course), but you should certainly try to negotiate first. What incentives can you offer the supplier to reduce their price? For example, you may be able to guarantee them a certain amount of business over a given period of time, or a good word of mouth referral to boost their business. On the other hand, consider what you can negotiate for the supplier to add in, to make the price that you pay more competitive. For example, could you negotiate a superior quality product for the same price as a standard one? It is worthwhile trying to keep your negotiating partner guessing as to what your desired final outcome is - although it is important that you establish this yourself early on (see above). You should take care to avoid revealing it to the other party too early. Although you are naturally looking for the best possible product and service at the best possible price, take care that you don't negotiate so that the supplier gives you so low a price that it is not in their interests to treat you as a valued customer, or encourages them to cut corners in other aspects of the purchase. Activity 2 Estimated time: 10 minutes You are in charge of negotiating with a major office furniture supplier to provide your business with office furniture for 100 members of staff in your premises, plus replacement supplies on an ongoing basis. You would like them to reduce their costs by 10%. Brainstorm your negotiating strategy.




5.8 When things go wrong with the purchasing process



If you are involved in regular purchasing, you will quickly learn that the process rarely runs smoothly all of the time. Here are some examples of issues that may arise:- Product availability If your supplier does not have the products that you need in stock, or does not have them in the quantities that you need them, you may need to consider either alternative products with the same supplier or the same products with alternative suppliers. It is useful to have some back-up suppliers available or another contingency plan, in order to avoid the inevitable delays that availability problems can cause. Problems with lead times The lead time is the length of time between ordering the product and receiving it. If the lead time is critical to you, this is something that you should include as a factor in your purchasing strategy upfront. However, lead times may increase due to a late, unforeseen delay to the delivery for example, which cannot be planned for and this can sometimes cause knock on effects to your own work and business. Increases in costs Costs can go up for a number of reasons, including inflation, scarcity of the material, demand and lack of competition in the marketplace. A breakdown in the agreed Service Level Agreement. Problems and disagreements can sometimes occur between buyers and sellers, for a number of reasons. It is obviously preferable to try to resolve these issues quickly and with as little disruption to the supply chain as possible. Hopefully, this will not occur, but if there are issues between yourself and the vendor which are impossible to overcome on a long term basis, put a contingency plan in place, or try to agree some transitional arrangements for the supply of necessary products until you are in a position to find an alternative supplier.




Module Summary



We began this module by looking at some common types of commercial occupancy arrangements, namely commercial leases and licences and some of the key features of these arrangements. We then moved on to looking at the important process of acquiring equipment for your premises, both general and specific and three of the most common methods of obtaining it (purchasing, renting, or leasing) and some of the main pros and cons of each approach. This led us on to the area of purchasing and procurement in general and we discussed what a purchasing strategy is and why it ought to be a useful tool for you to use if you are responsible for making the purchasing decisions in your organisation. We looked in more detail at the main steps involved in the purchasing process and some of the key documents that you are likely to come across in this regard, such as purchase orders and invoices. You also learned more about the important factors to consider when finding and selecting suppliers or vendors to work with and some tips for how to successfully negotiate with them in order to secure the best possible deal for your business. Finally, we discussed some common issues that might arise during the purchasing process and how to mitigate them. [Tweet "I just completed Module 5 of the Facilities Management Course"]

Module 5: Leases, Purchasing and Vendor Management

Types of commercial leases and licences and key terms associated with each arrangement Purchasing, leasing and renting equipment for your business and how to establish the true cost of purchasing equipment How to draw up an effective purchasing strategy for your business Finding and selecting the most appropriate suppliers and vendors for your business Summary/What you will learn: Types of commercial leases and licences and key terms associated with each arrangement Purchasing, leasing and renting equipment for your business and how to establish the true cost of purchasing equipment How to draw up an effective purchasing strategy for your business Finding and selecting the most appropriate suppliers and vendors for your business Great tips for negotiating with vendors.

5.1 Types of commercial lease

As a Facilities Manager, you will no doubt either be responsible for or have some accountability towards the lease arrangements of your particular building or premises. Below, we have summarised the characteristics of some of the main types of occupation arrangements and what you need to know about each. Leases and Licences A lease is essentially an arrangement to grant a tenant with exclusive use of a particular building or property for the purpose of running their business, for a set period of time and for a set price. A lease provides the tenant with specific rights regarding the premises, specifically the right to transfer it to a third party, subject to specific conditions. We will focus our attention more specifically on leases as the more common arrangement for occupying a commercial property. Alternatively, a licence also grants permission to occupy a building, but unlike a lease, the occupier doesn't benefit from exclusive possession and is not able to transfer the licence to a third party. What's more, there is no requirement for the landlord to provide the tenant with a fixed period of occupation. No minimum or maximum term exists for commercial leases and it is therefore up to the landlord to determine the most suitable length of lease for his building. Very long term leases of 999 years for example, do exist and are usually provided for a one-off, lump sum payment, rather than usual rent at market rate. Shorter term leases of 10 to 15 years are more common, as they provide flexibility for both parties to assess the suitability of the arrangement in the medium term and also allow the landlord to reassess pricing, where necessary. Generally, rent will be set at the market rate for these lengths of leases. There is a particular statutory clause which often applies to commercial leases called “security of tenure”. This clause means that the lease will not finish at the end of its contractual term and instead, the tenant should automatically be offered a new tenancy by the landlord. The only exception to this is if the landlord has reasonable grounds for not offering a new lease. Landlords can choose to amend this regulation prior to the lease commencing, by going through a particular process and many landlords choose to do so, to protect their own interests. Early termination of the lease can generally occur if the tenant breaches certain terms of the contractual agreement, such as non-payment of rent. Another example of early termination can be by a third party, although this is not common. For example The local authority may serve notice on a commercial lease if they wish to compulsorily purchase the property for a new land development. Compensation would be payable, if this were the case.

5.2 Ways of acquiring equipment for your premises

In this section, we will discuss the pros and cons of the three main methods of obtaining the equipment needed for your premises, be it office furniture, IT and telephones, machinery, stationery, etc. These main methods are outright purchasing, renting, or leasing. Renting Advantages:- With a short term rental agreement, you will have the flexibility to only pay for the equipment on the basis of when you use it, meaning that you won't have to pay fixed rental charges for equipment that you don't need or use regularly. Most of the additional costs, such as repair and maintenance, are paid for by the owners, meaning fewer variable and unforeseen costs for you to bear. You benefit from the flexibility to rent on an ad-hoc basis that suits you, such as peak periods, or when you need specialist equipment for a particular project for example. Disadvantages:- It is usually the case that it is more expensive to rent equipment on a short-term basis than to lease or buy it, due to the flexibility that renting affords. Availability issues can sometimes cause you problems - for example, if you are not able to give enough notice to the supplier, the equipment that you need may not be in stock when you require it, causing you possible setbacks. Purchasing Advantages:- You don't need to worry about availability issues as you do with renting, as the equipment that you need will always be ready for when you need it. If, after weighing up how often you are likely to make use of the equipment, you feel that you would save money by purchasing it for a one-off cost, you could potentially save a considerable amount of money. You may also find that there are tax benefits from purchasing your own equipment. Disadvantages:- Additional and unforeseen costs, such as repairs, insurance and depreciation, can add a considerable amount to the initial fixed cost of purchasing the equipment, so make sure that you estimate and factor these costs in at the early stages. If you don't end up using the equipment enough to justify its purchase price, plus the extra costs mentioned above, it could work out costlier. Leasing Advantages:- Leasing can often be an effective compromise between renting and purchasing, giving you the benefit of having the equipment always to hand, without outlaying the full purchase cost. Disadvantages:- Leasing usually costs more than buying the equipment outright and you usually have to pay interest costs. Fact Spending by local authorities on IT and technology procurement reached £463m in 2017 - an increase of 75% year on year. Source: Arvato and NelsonHall survey 2016.

5.3 Equipment costs

If you do decide to go down the purchasing route for some of your equipment, it is helpful to understand how to accurately estimate the costs involved. You can either look at the unit cost or the hourly cost, to enable you to draw comparisons between different types of equipment or to work out whether it is cheaper to buy, rent, or lease. Note that there are two components which make up the total costs involved in purchasing equipment - operating costs and ownership costs. Ownership costs These are usually fixed costs and include the following:- Initial outlay - this is essentially the full purchase price of the equipment, plus the costs of having it delivered and assembled, where necessary. Cost of the investment - this is either the rate of return on company investment if purchased outright, or the cost of interest if the monies to fund the purchase were borrowed. Other costs - examples are licences or taxes associated with owning the equipment, storage costs, etc. Operating costs These are usually variable and include the following:- Power/fuel costs -this cost relates to the price of powering the piece of equipment through electricity, gas, petrol, etc. This cost can be difficult to estimate, as it relies on a number of regularly fluctuating factors such as the cost of fuel itself (subject to changes in the price of raw materials, tax, inflation, etc), plus how efficient the equipment is. Repair and maintenance costs - examples include regular servicing of IT equipment, fixing and repairing broken equipment, etc. Insurance premiums - purchasing expensive equipment is likely to have an impact on your insurance premiums. Activity 1 Estimated time: 15 minutes Imagine that you are the Facilities Manager for a brand new office block, housing three small administration/sales companies. Draw up an overarching purchasing strategy, detailing the following:- The main equipment and products that you need to purchase. Whether any could be leased or rented instead. How to shortlist your suppliers and what to look for.

5.4 What is a purchasing strategy?

A purchasing strategy is a structured way in which to buy the goods and services you need for your business by researching and choosing a group of vendors with whom you can build a long term relationship on mutually agreeable terms. There are a number of reasons why establishing a good purchasing strategy is much more beneficial than purchasing goods and services on an ad-hoc and unstructured basis, as follows:- Offering a vendor a longer term purchasing relationship often means that they are more likely to offer you a good deal on price or quality. Working with a smaller number of vendors means that you will hopefully develop a trusting working relationship, meaning that you can rely on them to stick to the terms of the agreement in relation to delivery times, quality, cost, issues and complaints, etc. It gives you good negotiating power with vendors. It enables you to make clear comparisons between what is being offered by different providers.

5.5 Steps in the purchasing process

Planning Before you make a start on purchasing anything, you should carefully consider your current and future needs. These may include:- The different types of equipment/goods that you need to buy. The quantities that you need to buy them in. Which items you need to purchase on a one-off or rare basis (such as office desks, for example) and which you will have an ongoing requirement for (such as stationery). Whether you have requirements for a particular quality, style, brand, material, etc. Any specific requirements which may make your purchasing more specialist. How quickly you need the goods. Researching potential suppliers and asking for quotes Following the planning that you have undertaken above, the next step is to choose the supplier(s) from whom to purchase. As part of this process, you will need to compare price, quality, delivery, company reputation and product availability across different vendors, before choosing which to purchase from. Your shortlist of suppliers should give you a quotation, detailing the items that you wish to purchase, along with their cost. Gathering quotations is a simple way of comparing the services of more than one vendor. Placing your orders/drawing up of contracts and Service Level Agreements When decided on a supplier, the usual etiquette is to let them know verbally and then issue them with a purchase order. Drawing up a more formal contract for services or a Service Level Agreement (SLA) can be a good idea, if you envisage a longer lasting relationship with that particular vendor. Refer back to Module 4 for more information about what to include in such arrangements. What are purchase orders and invoices and why use them? You have probably used both of these documents in the past, but it is useful to give you an overview of their purpose in relation to facilities management. A purchase order is a document which is produced by the buyer of goods and given to the seller of goods and lists the items which the buyer has agreed to purchase for an agreed price. It also details the other agreed terms, such as payment, delivery, returns, etc. A contract between the buyer and seller is created, after the buyer has accepted the purchase order generated by the seller. The main benefit of purchase orders is that they provide a level of protection for both parties in the transaction. From the buyer's perspective, it means that the terms of the sale are all laid out in writing and therefore, there is confirmation of what product or service they can expect - and for what price. For the seller, the purchase order finalises the buyer's commitment to purchase the goods or services at the agreed terms, to minimise any future disputes or issues, such as non-payment. An invoice is the document sent from the seller to the buyer to request payment after the goods have been dispatched and received. The invoice lists the goods that have been sold, the method of payment and the payment terms - usually 14 or 28 days from the date of issue of the invoice.

5.6 How to select your suppliers

What to look for in a supplier Naturally, you will have different requirements from your vendors, depending upon the type of product or service that you are buying from them and the specifics relating to your particular business and its priorities. For example If you work as the Facilities Manager for an IT company, you may favour suppliers who are able to quickly turn around your orders and provide exceptional after-sales support. This is why it pays to carefully consider the unique requirements of your business, in advance of going out to market to look for suppliers. Generally speaking, there are some key factor to consider, as follows:- Price Of course, price is absolutely one of the most important parts of the equation. Simply put, a vendor's prices must be competitive in order for you to consider buying from them in the first place. However, a more useful phrase is probably “value for money”, as the lowest price on the market is not necessarily the best option, after factoring quality into the mix too. Different business and different departments have different budgets, so make sure that you are clear on how much money you have to spend before you start and then it is well worth shopping around to compare prices and offers between competitors. If you are able to offer regular business to a vendor or buy products in bulk, you may benefit from a lower unit price - if not, ask! We will discuss negotiating strategies with suppliers, later in this module. Quality Your main objective in the purchasing process is to buy the best quality products or services for the best price available - and a price that is acceptable to you and within your budget. Quality, however, is a subjective term and does not always mean the same thing to everybody. Do not necessarily believe advertising which states that one particular product is better quality than another - do your research and involve experts in the field, where necessary. Also remember that, just because a particular product commands a higher price, it does not automatically mean that it is better quality. Great customer service You should be confident that your supplier will always communicate clearly and in a timely manner with you and will be committed to resolving any issues or queries promptly. Reliability Securing a great product for the best price means nothing if you cannot rely on the supplier to stick to the terms of your agreement and get the basics right, such as providing you with the product when they say they will, billing you correctly and dealing with any issues fairly and promptly. A good working relationship Partnerships with suppliers are more likely to succeed if you share similar commercial values and ways of working, etc. Think about the things that are most important to you in business and make sure that your suppliers work in the same way that you do. Reputation and security You may feel more confident working with a vendor who has an established track record in the market and comes with genuine recommendations from other customers. That said, newer suppliers may be more interested in offering superior deals, to get you on board and push their reputation in the marketplace.

5.7 How to find a supplier

First of all, revisit your purchasing strategy to work out how many suppliers you are looking for and for which products or services. As we have said, a lot of this will depend on the particular circumstances of your business. For example You may need to utilise the services of lots of different specialist suppliers from which to source individual products of the best quality, for the right price. Alternatively, you may choose to work with a smaller number of suppliers who can provide you with everything that you need. In this situation, you are probably more likely to benefit from discounts by giving the suppliers more regular business, plus there is the increased possibility of building a mutually beneficial and long term relationship with each other. The downside could be that they cannot source all of your requirements effectively. Here is a summary of the steps to be taken, when choosing your suppliers:- Thoroughly research suppliers in your given area, drawing up a final shortlist of any of interest. Ask your shortlisted suppliers for quotations. Compare the quotations of different suppliers in the marketplace. Choose a supplier and negotiate terms and conditions with them. Negotiating terms and conditions with a supplier Negotiating with suppliers is paramount to achieving the best deal from them. In fact, you may need to negotiate on one or a number of different areas, in order to find the right terms for your business, which could include obvious elements, such as price, but also other contractual terms, such as delivery, payment terms, after-sales support, etc. There are two factors that you should carefully consider in advance of starting negotiations with a supplier, to set you up for success:- What are your specific negotiating priorities? Trying to negotiate on every aspect of a supplier's terms would not be very wise and would leave your negotiating unfocused and unlikely to succeed. In this way, it is important that you reach a decision on which areas you are willing to compromise on and which are potential “deal-breakers” for you. What is your preferred outcome? Before entering negotiation, think about your end points, such as your preferred price, but also the highest price that you would be willing to pay. This will add structure to your negotiation and will minimise the risk of you walking away without a good deal. Good tips for successful negotiation Effective negotiation is a skill in itself, learned from practice. As a Facilities Manager, it is very likely that you will be involved in the negotiations with suppliers, but you may not have had experience doing this in the past, or not know where to start. If your company is large enough, you may benefit from a specialist procurement team, who can undertake all or part of this responsibility alongside you. If not, it is certainly worth taking some time to think about your negotiating style and strategy in advance of dealing with your suppliers. Don't be afraid of giving counter offers to a supplier when negotiating on price, before settling on a final, agreed price. The supplier may not budge and you may end up paying the original price in full (if you are happy with it, of course), but you should certainly try to negotiate first. What incentives can you offer the supplier to reduce their price? For example, you may be able to guarantee them a certain amount of business over a given period of time, or a good word of mouth referral to boost their business. On the other hand, consider what you can negotiate for the supplier to add in, to make the price that you pay more competitive. For example, could you negotiate a superior quality product for the same price as a standard one? It is worthwhile trying to keep your negotiating partner guessing as to what your desired final outcome is - although it is important that you establish this yourself early on (see above). You should take care to avoid revealing it to the other party too early. Although you are naturally looking for the best possible product and service at the best possible price, take care that you don't negotiate so that the supplier gives you so low a price that it is not in their interests to treat you as a valued customer, or encourages them to cut corners in other aspects of the purchase. Activity 2 Estimated time: 10 minutes You are in charge of negotiating with a major office furniture supplier to provide your business with office furniture for 100 members of staff in your premises, plus replacement supplies on an ongoing basis. You would like them to reduce their costs by 10%. Brainstorm your negotiating strategy.

5.8 When things go wrong with the purchasing process

If you are involved in regular purchasing, you will quickly learn that the process rarely runs smoothly all of the time. Here are some examples of issues that may arise:- Product availability If your supplier does not have the products that you need in stock, or does not have them in the quantities that you need them, you may need to consider either alternative products with the same supplier or the same products with alternative suppliers. It is useful to have some back-up suppliers available or another contingency plan, in order to avoid the inevitable delays that availability problems can cause. Problems with lead times The lead time is the length of time between ordering the product and receiving it. If the lead time is critical to you, this is something that you should include as a factor in your purchasing strategy upfront. However, lead times may increase due to a late, unforeseen delay to the delivery for example, which cannot be planned for and this can sometimes cause knock on effects to your own work and business. Increases in costs Costs can go up for a number of reasons, including inflation, scarcity of the material, demand and lack of competition in the marketplace. A breakdown in the agreed Service Level Agreement. Problems and disagreements can sometimes occur between buyers and sellers, for a number of reasons. It is obviously preferable to try to resolve these issues quickly and with as little disruption to the supply chain as possible. Hopefully, this will not occur, but if there are issues between yourself and the vendor which are impossible to overcome on a long term basis, put a contingency plan in place, or try to agree some transitional arrangements for the supply of necessary products until you are in a position to find an alternative supplier.

Module Summary

We began this module by looking at some common types of commercial occupancy arrangements, namely commercial leases and licences and some of the key features of these arrangements. We then moved on to looking at the important process of acquiring equipment for your premises, both general and specific and three of the most common methods of obtaining it (purchasing, renting, or leasing) and some of the main pros and cons of each approach. This led us on to the area of purchasing and procurement in general and we discussed what a purchasing strategy is and why it ought to be a useful tool for you to use if you are responsible for making the purchasing decisions in your organisation. We looked in more detail at the main steps involved in the purchasing process and some of the key documents that you are likely to come across in this regard, such as purchase orders and invoices. You also learned more about the important factors to consider when finding and selecting suppliers or vendors to work with and some tips for how to successfully negotiate with them in order to secure the best possible deal for your business. Finally, we discussed some common issues that might arise during the purchasing process and how to mitigate them. [Tweet "I just completed Module 5 of the Facilities Management Course"]

Types of commercial leases and licences and key terms associated with each arrangement
Purchasing, leasing and renting equipment for your business and how to establish the true
cost of purchasing equipment
How to draw up an effective purchasing strategy for your business
Finding and selecting the most appropriate suppliers and vendors for your business
Summary/What you will learn:
Types of commercial leases and licences and key terms associated with each arrangement
Purchasing, leasing and renting equipment for your business and how to establish the true
cost of purchasing equipment
How to draw up an effective purchasing strategy for your business
Finding and selecting the most appropriate suppliers and vendors for your business
Great tips for negotiating with vendors.

5.1 Types of commercial lease

As a Facilities Manager, you will no doubt either be responsible for
or have some accountability towards the lease arrangements of your particular building or
premises.
Below, we have summarised the characteristics of some of the main types of occupation
arrangements and what you need to know about each.
Leases and Licences
A lease is essentially an arrangement to grant a tenant with exclusive use of a particular building or
property for the purpose of running their business, for a set period of time and for a set price. A
lease provides the tenant with specific rights regarding the premises, specifically the right to
transfer it to a third party, subject to specific conditions. We will focus our attention more
specifically on leases as the more common arrangement for occupying a commercial property.
Alternatively, a licence also grants permission to occupy a building, but unlike a lease, the occupier
doesn't benefit from exclusive possession and is not able to transfer the licence to a third party.
What's more, there is no requirement for the landlord to provide the tenant with a fixed period of
occupation.
No minimum or maximum term exists for commercial leases and it is therefore up to the landlord to
determine the most suitable length of lease for his building.
Very long term leases of 999 years for example, do exist and are usually provided for a one-off, lump
sum payment, rather than usual rent at market rate. Shorter term leases of 10 to 15 years are more
common, as they provide flexibility for both parties to assess the suitability of the arrangement in
the medium term and also allow the landlord to reassess pricing, where necessary. Generally, rent
will be set at the market rate for these lengths of leases.
There is a particular statutory clause which often applies to commercial leases called “security of
tenure”. This clause means that the lease will not finish at the end of its contractual term and
instead, the tenant should automatically be offered a new tenancy by the landlord. The only
exception to this is if the landlord has reasonable grounds for not offering a new lease. Landlords
can choose to amend this regulation prior to the lease commencing, by going through a particular
process and many landlords choose to do so, to protect their own interests.
Early termination of the lease can generally occur if the tenant breaches certain terms of the
contractual agreement, such as non-payment of rent. Another example of early termination can be
by a third party, although this is not common.
For example
The local authority may serve notice on a commercial lease if they wish to compulsorily purchase the
property for a new land development. Compensation would be payable, if this were the case.

5.2 Ways of acquiring equipment for your premises

In this section, we will discuss the pros and cons of the three main
methods of obtaining the equipment needed for your premises, be it office furniture, IT
and telephones, machinery, stationery, etc.
These main methods are outright purchasing, renting, or leasing.
Renting
Advantages:-
With a short term rental agreement, you will have the flexibility to only pay for the equipment
on the basis of when you use it, meaning that you won't have to pay fixed rental charges for
equipment that you don't need or use regularly.
Most of the additional costs, such as repair and maintenance, are paid for by the owners,
meaning fewer variable and unforeseen costs for you to bear.
You benefit from the flexibility to rent on an ad-hoc basis that suits you, such as peak periods,
or when you need specialist equipment for a particular project for example.
Disadvantages:-
It is usually the case that it is more expensive to rent equipment on a short-term basis than to
lease or buy it, due to the flexibility that renting affords.
Availability issues can sometimes cause you problems - for example, if you are not able to give
enough notice to the supplier, the equipment that you need may not be in stock when you
require it, causing you possible setbacks.
Purchasing
Advantages:-
You don't need to worry about availability issues as you do with renting, as the equipment that
you need will always be ready for when you need it.
If, after weighing up how often you are likely to make use of the equipment, you feel that you
would save money by purchasing it for a one-off cost, you could potentially save a considerable
amount of money.
You may also find that there are tax benefits from purchasing your own equipment.
Disadvantages:-
Additional and unforeseen costs, such as repairs, insurance and depreciation, can add a
considerable amount to the initial fixed cost of purchasing the equipment, so make sure that
you estimate and factor these costs in at the early stages.
If you don't end up using the equipment enough to justify its purchase price, plus the extra
costs mentioned above, it could work out costlier.
Leasing
Advantages:-
Leasing can often be an effective compromise between renting and purchasing, giving you the
benefit of having the equipment always to hand, without outlaying the full purchase cost.
Disadvantages:-
Leasing usually costs more than buying the equipment outright and you usually have to pay
interest costs.
Fact
Spending by local authorities on IT and technology
procurement reached £463m in 2017 - an increase of 75% year on year.
Source: Arvato and NelsonHall survey 2016.

5.3 Equipment costs

If you do decide to go down the purchasing route for some of your
equipment, it is helpful to understand how to accurately estimate the costs involved.
You can either look at the unit cost or the hourly cost, to enable you to draw comparisons between
different types of equipment or to work out whether it is cheaper to buy, rent, or lease.
Note that there are two components which make up the total costs involved in purchasing
equipment - operating costs and ownership costs.
Ownership costs
These are usually fixed costs and include the following:-
Initial outlay - this is essentially the full purchase price of the equipment, plus the costs of
having it delivered and assembled, where necessary.
Cost of the investment - this is either the rate of return on company investment if purchased
outright, or the cost of interest if the monies to fund the purchase were borrowed.
Other costs - examples are licences or taxes associated with owning the equipment, storage
costs, etc.
Operating costs
These are usually variable and include the following:-
Power/fuel costs -this cost relates to the price of powering the piece of equipment through
electricity, gas, petrol, etc. This cost can be difficult to estimate, as it relies on a number of
regularly fluctuating factors such as the cost of fuel itself (subject to changes in the price of
raw materials, tax, inflation, etc), plus how efficient the equipment is.
Repair and maintenance costs - examples include regular servicing of IT equipment, fixing and
repairing broken equipment, etc.
Insurance premiums - purchasing expensive equipment is likely to have an impact on your
insurance premiums.
Activity 1
Estimated time: 15 minutes
Imagine that you are the Facilities Manager for a brand new office block, housing three
small administration/sales companies.
Draw up an overarching purchasing strategy, detailing the following:-
The main equipment and products that you need to purchase.
Whether any could be leased or rented instead.
How to shortlist your suppliers and what to look for.

5.4 What is a purchasing strategy?

A purchasing strategy is a structured way in which to buy the goods
and services you need for your business by researching and choosing a group of vendors
with whom you can build a long term relationship on mutually agreeable terms.
There are a number of reasons why establishing a good purchasing strategy is much more
beneficial than purchasing goods and services on an ad-hoc and unstructured basis, as
follows:-
Offering a vendor a longer term purchasing relationship often means that they are more likely
to offer you a good deal on price or quality.
Working with a smaller number of vendors means that you will hopefully develop a trusting
working relationship, meaning that you can rely on them to stick to the terms of the agreement
in relation to delivery times, quality, cost, issues and complaints, etc.
It gives you good negotiating power with vendors.
It enables you to make clear comparisons between what is being offered by different
providers.

5.5 Steps in the purchasing process

Planning
Before you make a start on purchasing anything, you should carefully consider your current and
future needs.
These may include:-
The different types of equipment/goods that you need to buy.
The quantities that you need to buy them in.
Which items you need to purchase on a one-off or rare basis (such as office desks, for example)
and which you will have an ongoing requirement for (such as stationery).
Whether you have requirements for a particular quality, style, brand, material, etc.
Any specific requirements which may make your purchasing more specialist.
How quickly you need the goods.
Researching potential suppliers and asking for quotes
Following the planning that you have undertaken above, the next step is to choose the supplier(s)
from whom to purchase. As part of this process, you will need to compare price, quality, delivery,
company reputation and product availability across different vendors, before choosing which to
purchase from.
Your shortlist of suppliers should give you a quotation, detailing the items that you wish to purchase,
along with their cost. Gathering quotations is a simple way of comparing the services of more than
one vendor.
Placing your orders/drawing up of contracts and Service Level Agreements
When decided on a supplier, the usual etiquette is to let them know verbally and then issue them
with a purchase order.
Drawing up a more formal contract for services or a Service Level Agreement (SLA) can be a good
idea, if you envisage a longer lasting relationship with that particular vendor. Refer back to Module
4 for more information about what to include in such arrangements.
What are purchase orders and invoices and why use them?
You have probably used both of these documents in the past, but it is useful to give you an overview
of their purpose in relation to facilities management. A purchase order is a document which is
produced by the buyer of goods and given to the seller of goods and lists the items which the buyer
has agreed to purchase for an agreed price. It also details the other agreed terms, such as payment,
delivery, returns, etc.
A contract between the buyer and seller is created, after the buyer has accepted the purchase order
generated by the seller. The main benefit of purchase orders is that they provide a level of
protection for both parties in the transaction. From the buyer's perspective, it means that the terms
of the sale are all laid out in writing and therefore, there is confirmation of what product or service
they can expect - and for what price. For the seller, the purchase order finalises the buyer's
commitment to purchase the goods or services at the agreed terms, to minimise any future disputes
or issues, such as non-payment.
An invoice is the document sent from the seller to the buyer to request payment after the goods have
been dispatched and received. The invoice lists the goods that have been sold, the method of
payment and the payment terms - usually 14 or 28 days from the date of issue of the invoice.

5.6 How to select your suppliers

What to look for in a supplier
Naturally, you will have different requirements from your vendors, depending upon the type of
product or service that you are buying from them and the specifics relating to your particular
business and its priorities.
For example
If you work as the Facilities Manager for an IT company, you may favour suppliers who are able to
quickly turn around your orders and provide exceptional after-sales support. This is why it pays to
carefully consider the unique requirements of your business, in advance of going out to market to
look for suppliers.
Generally speaking, there are some key factor to consider, as follows:-
Price
Of course, price is absolutely one of the most important parts of the equation. Simply put, a vendor's
prices must be competitive in order for you to consider buying from them in the first place.
However, a more useful phrase is probably “value for money”, as the lowest price on the market is
not necessarily the best option, after factoring quality into the mix too. Different business and
different departments have different budgets, so make sure that you are clear on how much money
you have to spend before you start and then it is well worth shopping around to compare prices and
offers between competitors. If you are able to offer regular business to a vendor or buy products in
bulk, you may benefit from a lower unit price - if not, ask! We will discuss negotiating strategies with
suppliers, later in this module.
Quality
Your main objective in the purchasing process is to buy the best quality products or services for the
best price available - and a price that is acceptable to you and within your budget.
Quality, however, is a subjective term and does not always mean the same thing to everybody. Do
not necessarily believe advertising which states that one particular product is better quality than
another - do your research and involve experts in the field, where necessary. Also remember that,
just because a particular product commands a higher price, it does not automatically mean that it is
better quality.
Great customer service
You should be confident that your supplier will always communicate clearly and in a timely manner
with you and will be committed to resolving any issues or queries promptly.
Reliability
Securing a great product for the best price means nothing if you cannot rely on the supplier to stick
to the terms of your agreement and get the basics right, such as providing you with the product
when they say they will, billing you correctly and dealing with any issues fairly and promptly.
A good working relationship
Partnerships with suppliers are more likely to succeed if you share similar commercial values and
ways of working, etc. Think about the things that are most important to you in business and make
sure that your suppliers work in the same way that you do.
Reputation and security
You may feel more confident working with a vendor who has an established track record in the
market and comes with genuine recommendations from other customers. That said, newer suppliers
may be more interested in offering superior deals, to get you on board and push their reputation in
the marketplace.

5.7 How to find a supplier

First of all, revisit your purchasing strategy to work out how many
suppliers you are looking for and for which products or services.
As we have said, a lot of this will depend on the particular circumstances of your business.
For example
You may need to utilise the services of lots of different specialist suppliers from which to source
individual products of the best quality, for the right price. Alternatively, you may choose to work
with a smaller number of suppliers who can provide you with everything that you need. In this
situation, you are probably more likely to benefit from discounts by giving the suppliers more
regular business, plus there is the increased possibility of building a mutually beneficial and long
term relationship with each other. The downside could be that they cannot source all of your
requirements effectively.
Here is a summary of the steps to be taken, when choosing your suppliers:-
Thoroughly research suppliers in your given area, drawing up a final shortlist of any of
interest.
Ask your shortlisted suppliers for quotations.
Compare the quotations of different suppliers in the marketplace.
Choose a supplier and negotiate terms and conditions with them.
Negotiating terms and conditions with a supplier
Negotiating with suppliers is paramount to achieving the best deal from them. In fact, you may need
to negotiate on one or a number of different areas, in order to find the right terms for your business,
which could include obvious elements, such as price, but also other contractual terms, such as
delivery, payment terms, after-sales support, etc.
There are two factors that you should carefully consider in advance of starting negotiations
with a supplier, to set you up for success:-
What are your specific negotiating priorities? Trying to negotiate on every aspect of a
supplier's terms would not be very wise and would leave your negotiating unfocused and
unlikely to succeed. In this way, it is important that you reach a decision on which areas you
are willing to compromise on and which are potential “deal-breakers” for you.
What is your preferred outcome? Before entering negotiation, think about your end points,
such as your preferred price, but also the highest price that you would be willing to pay. This
will add structure to your negotiation and will minimise the risk of you walking away without a
good deal.
Good tips for successful negotiation
Effective negotiation is a skill in itself, learned from practice. As a Facilities Manager, it is very likely
that you will be involved in the negotiations with suppliers, but you may not have had experience
doing this in the past, or not know where to start. If your company is large enough, you may benefit
from a specialist procurement team, who can undertake all or part of this responsibility alongside
you. If not, it is certainly worth taking some time to think about your negotiating style and strategy
in advance of dealing with your suppliers.
Don't be afraid of giving counter offers to a supplier when negotiating on price, before settling
on a final, agreed price. The supplier may not budge and you may end up paying the original
price in full (if you are happy with it, of course), but you should certainly try to negotiate first.
What incentives can you offer the supplier to reduce their price? For example, you may be able
to guarantee them a certain amount of business over a given period of time, or a good word of
mouth referral to boost their business.
On the other hand, consider what you can negotiate for the supplier to add in, to make the
price that you pay more competitive. For example, could you negotiate a superior quality
product for the same price as a standard one?
It is worthwhile trying to keep your negotiating partner guessing as to what your desired final
outcome is - although it is important that you establish this yourself early on (see above). You
should take care to avoid revealing it to the other party too early.
Although you are naturally looking for the best possible product and service at the best
possible price, take care that you don't negotiate so that the supplier gives you so low a price
that it is not in their interests to treat you as a valued customer, or encourages them to cut
corners in other aspects of the purchase.
Activity 2
Estimated time: 10 minutes
You are in charge of negotiating with a major office furniture supplier to provide your business with
office furniture for 100 members of staff in your premises, plus replacement supplies on an ongoing
basis. You would like them to reduce their costs by 10%.
Brainstorm your negotiating strategy.

5.8 When things go wrong with the purchasing process

If you are involved in regular purchasing, you will quickly learn that
the process rarely runs smoothly all of the time.
Here are some examples of issues that may arise:-
Product availability
If your supplier does not have the products that you need in stock, or does not have them in the
quantities that you need them, you may need to consider either alternative products with the same
supplier or the same products with alternative suppliers. It is useful to have some back-up suppliers
available or another contingency plan, in order to avoid the inevitable delays that availability
problems can cause.
Problems with lead times
The lead time is the length of time between ordering the product and receiving it. If the lead time is
critical to you, this is something that you should include as a factor in your purchasing strategy
upfront. However, lead times may increase due to a late, unforeseen delay to the delivery for
example, which cannot be planned for and this can sometimes cause knock on effects to your own
work and business.
Increases in costs
Costs can go up for a number of reasons, including inflation, scarcity of the material, demand and
lack of competition in the marketplace.
A breakdown in the agreed Service Level Agreement.
Problems and disagreements can sometimes occur between buyers and sellers, for a number of
reasons. It is obviously preferable to try to resolve these issues quickly and with as little disruption
to the supply chain as possible. Hopefully, this will not occur, but if there are issues between
yourself and the vendor which are impossible to overcome on a long term basis, put a contingency
plan in place, or try to agree some transitional arrangements for the supply of necessary products
until you are in a position to find an alternative supplier.

Module Summary

We began this module by looking at some common types of commercial occupancy arrangements,
namely commercial leases and licences and some of the key features of these arrangements. We
then moved on to looking at the important process of acquiring equipment for your premises, both
general and specific and three of the most common methods of obtaining it (purchasing, renting, or
leasing) and some of the main pros and cons of each approach. This led us on to the area of
purchasing and procurement in general and we discussed what a purchasing strategy is and why it
ought to be a useful tool for you to use if you are responsible for making the purchasing decisions in
your organisation.
We looked in more detail at the main steps involved in the purchasing process and some of the key
documents that you are likely to come across in this regard, such as purchase orders and invoices.
You also learned more about the important factors to consider when finding and selecting suppliers
or vendors to work with and some tips for how to successfully negotiate with them in order to secure
the best possible deal for your business. Finally, we discussed some common issues that might arise
during the purchasing process and how to mitigate them.