As the economy forces us to face leaner times, now is a good time to tighten your nonprofit’s purchasing practices and policies. A good purchasing policy serves as a tool for maximizing available resources of funds, personnel, and time.
Now pause. Pull your policy off the shelf. Dust it off if you need to. Read it carefully to make sure that gives clear guidelines on how purchases should be handled in your organization. For example, does your policy cover the research and selection of vendors? Does it explain when competitive bidding should be employed and when pricing should be negotiated? Does it discuss the use of consultants, the documentation of the selection process? What’s the policy for credit card usage and reimbursement?
Now that you’ve reviewed your policy, I need you to look at it one more time. Double check to make sure you have procedures to accompany the policy. The procedures should answer questions such as, how should routine and major purchases be handled, including who is authorized to approve purchases? Who is allowed to enter into contracts for the organization, including decide about the rental or leasing of space? What are the travel guidelines for the organization? How are payments for conferences and professional development to be handled?
A good purchasing policy can go a long way in maximizing your resources of funds, personnel, and time.
Did you know? Our educational resource packet, “Financial Policies” includes a sample purchasing policy. The packet is free and available to Standards for Excellence Institute® members. It is available through the members only section of our website. Hard copies are also available upon request.