What is purchasing in procurement? UK guide

Purchasing in procurement is the process of buying the goods and services an organisation requires to operate. It covers all the steps required to make a purchase, from submitting a purchase requisition to receiving an order and reconciling invoices. In a broader sense, it’s the transactional layer that supports procurement strategy.

Purchasing is becoming increasingly difficult to control as order volume and operational complexity grow. Without the right systems and processes in place, purchasing becomes a source of unmanaged or tail spend, which will compromise your compliance, visibility, and spend reporting objectives.

For UK procurement leaders, understanding how purchasing control affects the wider procurement strategy, and what can be done to improve it, is a crucial part of building a resilient, cost-effective procurement function that meets regulatory requirements.

What does purchasing include?

Purchasing is the area of procurement focused on the acquisition of goods and services. Where procurement encompasses broader supply chain management activities like strategic sourcing and spend management, purchasing focuses on obtaining what’s needed at the right price through the correct process.

Purchasing typically includes:

• Identifying business needs

• Submitting and approving purchase requisitions

• Selecting approved suppliers

• Generating and issuing purchase orders

• Receiving and verifying goods and services

• Reconciling invoices and processing payments

Purchasing fulfils a distinct role within the broader procurement strategy, separate from related processes such as sourcing, which is specifically about finding and vetting the right suppliers.

Why can purchasing be difficult to control?

Purchasing becomes more complex as a business grows. In smaller organisations, it can be quite straightforward: someone requests something they need, it’s approved and purchased, and spend against budget is recorded in a simple spreadsheet. In larger organisations, maintaining control, compliance, and visibility presents far more challenges when operating across multiple locations, departments, or job sites.

Decentralised buying across departments and sites

If your purchasing happens independently across teams, locations, or business units, it’s much harder to maintain consistent processes and enforce procurement policies. Different buying groups often have their own preferred suppliers and workflows, which results in a decentralised procurement function with limited spend visibility and duplicate supplier relationships.

Informal or off-policy purchases

Maverick spending, employees purchasing outside of approved channels using personal credit cards, buying from unapproved suppliers, or bypassing the approval process, restricts an organisation’s ability to control costs and meet compliance requirements. While these often one-off purchases can seem insignificant at the time, they quickly accumulate into a real problem.

Limited visibility into category-level spend

When spend data is spread across multiple systems and largely invisible, procurement leaders lack the insights needed to make smart decisions. There’s no accurate way to identify patterns or compare supplier performance at the category level. This prevents you from effectively optimising costs and quality through supplier consolidation and effective category management.

Manual approvals and reconciliation complexity

A purchasing process that relies entirely on manual processes is slower, harder to audit, and more prone to mistakes than an automated purchasing system. When requisitions are paper-based, approvals happen over email, and invoices are matched in a spreadsheet, there’s an increased risk of delays, duplicated orders, and accounting errors.

Purchasing and unmanaged spend

A lack of purchasing control ultimately leads to the accumulation of tail spend or unmanaged spend. These are the high-volume, low-value purchases that commonly fall outside of approved channels and represent a significant portion of most organisations’ total spend.

Decentralised purchasing is a key contributor: when different teams are buying from hundreds of different suppliers, consolidation becomes challenging. This leads to weaker vendor relationships and missed cost-saving opportunities.

The first steps to bringing unmanaged spend under control in a UK organisation include:

1. Analysis: conduct a comprehensive spend analysis to understand where tail spend exists in your organisation

2. Identification: determine which spend categories are the most fragmented and present the biggest opportunities for consolidation

3. Standardisation: establish a policy-enforcing purchasing workflow using a digital catalogue or procurement software solution

4. Policy: set clear spending thresholds that define when a purchase requisition or purchase order is required

5. Consolidation: regularly review supplier lists and consolidate where appropriate to access better volume discounts.

Managing tail spend can mitigate risk across the supply chain, improve organisational compliance with procurement policies, and reduce overall purchasing costs. Getting it under control doesn’t just represent an efficiency gain, it aligns purchasing with the broader needs and objectives of your organisation.

The purchasing process explained

In most organisations, the purchasing process is a structured process built on sequential steps. These steps support visibility and control. Each reflects an opportunity to save time and money while strengthening procurement compliance.

The purchasing process typically follows six steps:

1. Identifying a need: a department or individual identifies a requirement for a specific item or service, including the quantity required, quality expectations, and urgency

2. Submitting and approving a purchase requisition: the requester submits a formal purchase requisition document, which the purchasing department reviews, if it meets pre-determined rules and spend thresholds, a relevant authority approves the purchase request

3. Selecting a supplier: if a framework agreement or preferred supplier list exists, then your buyer selects a supplier from the approved options, new purchases or higher-value requests may require a formal sourcing process to find the right supplier.

4. Generating and issuing a purchase order: the buyer generates a purchase order, either digitally or manually, confirming key details like price, quantity, and delivery requirements. It is then issued to the supplier, acting as a legally enforceable document that protects both parties.

5. Receiving goods or services: the supplier delivers the ordered goods or service to the buyer’s chosen delivery location – the buyer then checks delivery against the purchase order and confirms the quality of the goods or service meets the agreed expectations

6. Reconciling invoices and authorising payment: the accounts payable department compares the supplier invoice to the purchase order and delivery receipt to confirm accuracy. If everything is correct, they authorise payment according to the agreed payment terms.

This structured process reduces errors and shortens cycle times. By enabling visibility and embedding controls into the workflow itself, it supports compliance requirements while making it easier to effectively manage cash flow and audit your spend history.

Practical ways to improve purchasing control

You don’t necessarily need to completely overhaul your procurement process to improve purchasing control. In many cases, you can make a significant difference through small, intentional workflow adjustments that add up over time.

Effective ways to increase purchasing control and visibility include:

• Centralising purchasing activity: use a single, central solution like Amazon Business to manage all buying activities and create a clear, organisation-wide view of where spend is going, who it’s going to, and where your biggest consolidation opportunities are

• Setting clear buying rules and approval thresholds: clearly define who must authorise specific types of purchases, including budget thresholds, to reduce maverick spend and enforce purchasing policies without adding unnecessary friction to the buying process

• Consolidating supplier usage where appropriate: reduce the number of suppliers for each category to simplify contract management, build stronger relationships with your remaining suppliers, and gain access to better pricing through volume discounts

• Reviewing spend data regularly: conduct regular spend analyses to spot where off-policy purchases are most frequent and identify new cost-saving and consolidation opportunities

• Using framework agreements: rely on pre-agreed contracts with your preferred suppliers to eliminate individual purchasing decisions, shortening your procurement cycle while still ensuring consistent pricing, quality, and compliance.

The key to an effective purchasing process is making the right thing the easiest thing. Modern procurement tools can embed responsible and sustainable purchasing, internal policy, and regulatory compliance requirements directly into your workflows to deter employees from using non-compliant workarounds instead.

Digital tools support modern purchasing

Traditional purchasing follows time-consuming, manual processes that leave gaps in your data accuracy and create bottlenecks across the entire procurement cycle. Paper-based forms, email chains, and phone calls work for smaller, simpler organisations, but create unnecessary financial and operational challenges as complexity and volume grow.

Digital tools support modern purchasing by providing a more reliable and scalable way to manage your daily procurement activities and meet compliance demands.

Where manual purchasing processes fall short

The manual purchasing process frequently runs into several problems that are an inconvenience for small organisations and a significant governance and financial risk for larger ones.

Under a manual purchasing system:

• Approval chains rely on individuals being available, responsive, and proactively checking their inboxes

• Purchase orders take longer to generate and are prone to duplication, line-item errors, and delays that affect supply continuity

• Invoice matching takes up a massive chunk of the finance department’s time, distracting them from working on more strategic initiatives

• Businesses and non-profit organisations lack the visibility and accessibility needed to accurately report on spend and maintain an auditable trail of transactions.

A 2024 McKinsey report shows that better purchasing data can increase the volume of value-creation sourcing initiatives by up to 200%, demonstrating how transitioning from manual purchasing workflows to modern automation tools can also support your deeper financial business goals.

How Amazon Business supports managed purchasing

Amazon Business is a digital procurement solution designed to work within your existing purchasing structures. We connect leading procurement software, e-procurement tools, and ERP systems to centralise buying processes and spend data, giving buyers access to pre-approved product catalogues, automated PO creation, and real-time spend insights.

Our Guided Buying tool (a Prime Business feature) helps reduce maverick spend by automatically steering users towards your approved suppliers and products. For finance and procurement managers, our spend analytics tools unlock category-level visibility across all your purchases.

We also support multi-site and multi-location organisations, unifying purchasing operations across all teams and geographies to make it easier to manage spend with consistency and cost-efficiency.

Making purchasing easier to manage

Purchasing in the UK means far more than simply buying what you need when you need it. When it’s supported by clear policies, structured approval processes, and better visibility, it creates time savings and cost efficiency that directly improves bottom-line performance.

But when purchasing fails because of bottlenecks or manual errors, the consequences seep into other areas of your business, creating compliance issues, increasing delays, and straining your supplier relationships.

Most organisations don't need to reinvent their procurement function to improve purchasing control. Amazon Business solutions give UK procurement leaders the visibility, spend management tools, and policy controls to bring purchasing in line with wider business objectives.

This article was created by professional writers and editors with the assistance of AI-powered tools. AI was used in a supportive capacity only – for example, to aid with translation, content review, and alignment with brand guidelines. All substantive research, editorial decisions, and final approval were performed exclusively by human authors and editors, who retain full editorial responsibility for this publication.