In construction, the purchasing process is critical to keeping projects on time and within budget. Whether you're buying materials in bulk or coordinating with subcontractors, how you handle purchasing can greatly impact your project's success. If things aren't handled well, it can cause delays, go over budget, and lead to problems with suppliers.
Here’s a practical guide to setting up and managing an efficient purchasing process for your construction jobs.
Key Steps in Setting Up an Efficient Purchasing Process
The first step in creating an efficient purchasing process is deciding the level of detail you need when ordering materials or services.
Will you place orders at a high level, like buying all plastering for a project phase for $10,000? Or will you get more specific, ordering exact quantities, like 4,223 screws or 1,223 sheets of plasterboard?
This decision should be made early in the project. For example, when you're estimating costs or setting up your project, decide how detailed you want your purchase orders (formal agreements to buy goods or services) to be. Whether you’re ordering specific items or budgeting for entire project phases, this choice will guide how you manage the project and your purchasing process.
Essential Tools and Resources for an Efficient Purchasing Process
Automation is key to making your purchasing process efficient. For instance, if you've set up all your products in WorkGuru, you can automate several parts of the process:
- Stock Management: If you keep materials in stock and transport them to job sites, WorkGuru can help by automatically ordering items that are out of stock. This feature creates a draft purchase order for everything you need that isn’t currently available, ensuring you have what you need without delays.
- Automated Purchase Orders: Once you’ve broken down your quote to the desired level of detail, WorkGuru can generate a draft purchase order for all the materials required. This draft can be organised by supplier, making it easier to manage orders across multiple vendors.
However, it’s important to time your purchases carefully. For example, on a 12-month project, you might not want to order materials like floor polish in the first month.
🔎 Committing funds too early can unnecessarily tie up your budget. Instead, use WorkGuru’s “tick to order” feature.
This allows you to select specific items, choose a supplier, and quickly create a purchase order only when necessary.
Aligning your purchasing with your project schedule helps prevent downtime and maintain smooth operations.
Best Practices for Purchasing Materials in Construction
Start by implementing a strong process for checking received goods to ensure cost-effectiveness and efficiency. When materials arrive, make sure what you ordered matches what you’ve received. It sounds simple, but it’s easy to miss, and mistakes can be costly.
For instance, note the discrepancy immediately if you order 1,000 boxes of tiles but only receive 900. Create a backorder, which is an order for the remaining items, for the remaining 100 boxes.
This practice ensures you don’t pay for items you didn’t receive and keeps your project on track without unnecessary delays.
Common Pitfalls to Avoid in the Purchasing Process
One of the biggest pitfalls is not having a formal purchasing process. Relying on spreadsheets, phone calls, or last-minute trips to the hardware store creates chaos. It also leaves you little control over your costs and makes it hard to track spending against your budget.
For example, if you tell a contractor to handle plastering without a formal purchase order, you may end up with a bill twice what you expected. However, if you’ve issued a purchase order specifying $10,000 for plastering, you have a basis to negotiate if costs unexpectedly rise.
A formal process helps you control costs and provides a clear paper trail, which is essential for managing any disputes that arise.
How WorkGuru Supports Efficient Purchasing Practices
WorkGuru helps construction managers formalise their purchasing process. Here’s how:
Automate Orders
Streamline ordering with tools that match suppliers to specific line items in your project.
Control Spending
WorkGuru allows you to set spending limits and define who in your team can approve purchase orders. This control ensures that only authorised personnel can commit company funds, reducing the risk of overspending.
Manage Invoices with EzzyBills
WorkGuru and EzzyBills work together to make matching supplier invoices with purchase orders super easy.
When you receive an invoice, upload it to EzzyBills. It scans the document, reads the details, and matches it against the corresponding purchase order in WorkGuru. This integration ensures accurate recording, matching, and approval before payment, reducing manual data entry and errors.
EzzyBills + WorkGuru to Manage your Purchase Orders
Once you've placed a purchase order in WorkGuru, send it to your supplier as you normally do. When the supplier sends the invoice, forward it or snap a photo if it's a paper one and send it to EzzyBills.
EzzyBills will then automatically match the invoice details—like quantities, items, and prices—with the purchase order in WorkGuru. It eliminates manual entry errors and saves you time.
Following the same example used before with the 1,000 boxes of tiles, your supplier sends an invoice for these tiles.
EzzyBills will scan the invoice, identify the purchase order in WorkGuru, and check that the quantities and prices match what was agreed upon.
If everything checks out, the invoice is linked to the purchase order in WorkGuru, ensuring that your records are accurate and up-to-date before the payment is processed.
💡 Pro Tip: Upload or snap a photo of your invoices, and let EzzyBills match them to your purchase orders automatically. Watch the video below to see how simple it is.
Matching Supplier Invoices to Purchase Orders
To avoid overspending, make sure every supplier invoice references a purchase order. If it doesn’t, return it to the supplier and request that they include the reference. This practice eliminates confusion and helps you stay within budget.
Document your process clearly. For instance, ensure that invoices are only approved for payment after goods are received. If a supplier requires payment before delivery, make sure this is noted and understood by everyone involved in the purchasing process.
WorkGuru helps by ensuring that invoices aren’t sent to your accounting software until the supplier’s bill is received. This prevents premature payments and keeps your financial records accurate.
