Budgeting the Purchasing Department and the Purchasing Process

Traditionally, management has used the budget as a tool to track, control, and forecast the financial effectiveness of the business. Typically, budgets are prepared in some hierarchical manner by departments and then aggregated along organizational lines to create the business unit's budget. Purchasing as defined by the activities of the purchasing department and the procurement process. To distinguish the purchasing department from the purchasing process, the term “procurement” is be used herein to identify the process perspective. The control of the purchasing departmental budget is a very important piece of the procurement process.