A purchasing officer has many duties to perform on a daily basis. The responsibility of a purchasing officer is in high regard because of the process and responsibilities that are required. The officer has authority over the ordering and maintain the merchandise supply. Decisions of the purchasing officer are required when handling various ordering and financing of merchandise. This position is important for any company, and this individual should be trustworthy, and loyal. Should purchasing officers have legal authority? In regards to the duties required for a purchasing officer what types of legal authority is present, and should this type of authority change? What issues could occur due to a purchasing officer’s legal authority?
The purchasing officer has many tasks that are done to ensure an organization, business, or company is running smoothly. The purchasing officer handles the ordering of supplies that are needed for the company or for the customers who need materials from the company. The purchasing officer has to have a good eye, and be well organized in keeping track of orders coming out, being delivered, and payments being are made on time.
The types of duties that are included in purchasing for a business can range from different tasks each day depending on the circumstance. The business supplies will need to be ordered in a timely manner to ensure the company does not run out of stock of merchandise. This is very important for the officer to keep up with.
The ordering of different merchandise is also part of the duties. The officer will arrange meetings with different vendors, suppliers, and warehouses to make deals and bargains of buying or selling supplies. The officer has to keep these appointments, and focus on whether the deals are good or if they are not going to be beneficial to the company. This includes handling the financial aspect of purchase price, and sale price decisions made in regards to the company. The account will also work closely with the purchasing officer to ensure payments are received on time, and payments are processed on time as well.
The budgets for merchandise will need to be considered when ordering the supplies. The financial aspect of a purchasing officer can be quite mathematical when ordering, and selling merchandise. Another important part of a purchasing officer’s position is to be able to initiate deals or sales from outside groups and parties. The officer will need to keep up on the latest trends, deals, price, mew items, and the marketing sector.
“The purchasing officer is given the legal authority of the company to make purchases for the company to continue stock and merchandise sales” . The company gives the purchasing agent a legal authority to buy supplies that are needed for the company, and sell items need for the consumers. The legal authority of handling finances is also given when the exchange of financial agreement is concerned. In many cases the officer is legally authorized by the company to make deals with an outside source and make the decision of financial exchange between the business and the source. It seems that a purchasing officer has responsibility of legal authority from within the company.
The issues that can arise with a purchasing officer having legal authority is if that legal authority is misrepresented. The contracts that purchasing officers interact with when buying and selling supplies is covered by laws. “The laws require when an agreement of a contract is decided there needs to be four different parts within the agreement to make it binding” . The first part that needs to be considered is that all people involved should sign the agreement in a coherent state, and not do so to commit criminal activity. The second part that should be considered is the reason for the agreement should be of a legal status and not a criminal intent. The third part that is need to be taken into consideration is everything both parties discussed and decided should be followed through without hesitation. The fourth part that should be thought about; is that the contract in agreement with all parties that they would not have agreed to without the contract. If these parts are not upheld in the agreement between purchaser and seller then the agreement will not hold up or be bind. This is needed to be utilized in the purchasing officer’s activities. If these parts are not followed in business agreements, then those agreements won’t be legally binding. This is one of the issues that could impact the company because of legal authority being given to an inexperienced purchasing officer.
There is another legal issue with letting purchasing officers handle financial decisions within a company. This legal issue could result in the purchasing officer being unaware, untrained, and inexperienced when making agreements in the buying and selling sector. Not knowing the risks to look out for when can be a difference between financial profit and loss.
The risks that the purchasing officer needs to be aware of being important to remember. The first risk that the officer should be aware of is to know all the nine risks to be aware of. “The risks include: delivery process, title exchange, insurance accessible, agreement on pay, damaged or lost merchandise, agreement/termination, rejection, actual purpose, and condition of merchandise” . A good purchase officer will recognize these legal risks and concerns when making agreements with other people. When a risk occurs in the business terms then the purchaser should back out of the deal if it is not made right and legal.
The legal authority a purchaser has can be very crucial in terms of risk and profit. If the officer is unaware that he is being scammed or unlawfully fraud; then the company will also be at a loss. This type of authority can be harmful towards the company’s security and financial stability if the authority to legally purchase and sell supplies is misused. A company may need to outweigh the loss with profit when deciding on hiring a purchasing officer to handle merchandise transactions and supplies. Once a company finds a trustworthy, responsible, and attentive individual who meets all qualifications and background in the position; then there should not be any concerns or issues. Legal authority should only be in the hands of a perfect matched candidate to ensure the security of sales, purchases, and financial decisions regarding merchandise.
The officer should keep up to date on the laws of agreements by contract, purchasing, and policies that need to be upheld. The officer needs to know the proper procedures in securing a deal, sale, or purchase in a manner that is legal, and secure. The laws that the purchasing officers should know is a security of good selling and buying relationships towards outside merchants.
If the purchasing officer does not keep up to date on proper purchasing techniques, and policies, then the company could lose money, or end up in a lawsuit for not following the laws. This could cost unnecessary financial loss, and waist the company’s time and reputation. This position must hold much regard to trust, honesty, and integrity.
This position would not be right for just anyone. It would take the right person for this type of work and skill. A business who does not pick the right person for this position may be concerned. The officer who did not work out had legal authorization to handle the sales, purchases, and finances in regards to supplies. The company could be worried that the information that was legally authorized for the officer to handle is still in the officer’s hands after leaving the company. This could cause a security risk for the company because of the legal authority the individual had during employment.
Whether a purchasing officer should have legal authority should be up to the company. That decision would need to be decided by the company owner and the pros and cons should be taken into consideration. If a company decided to hire an officer and hand over legal authority, then that person should be a thoroughly investigated individual to ensure the safety of the business.
When a company hires a purchasing officer they are then giving the authorization to that employee to consult in regards to merchandise. The officer will need to be able to hold business meetings, relate to people to get the sales made, and find the best deals on supplies. The officer should hold all negotiations with not only the authority to do so, but in the ethical standpoint of the company. The officer is representing the company when he is making or selling items. With each sale he should be building relationships with clients and customers in order to build that pipeline.
This will help the company build acquaintances, and increase the choice of merchants. The officer may have built a relationship with one merchant who knows of another merchant that has items the officer is looking for. The merchant can then introduce the officer and build a new relationship of business. “Ethics should be a huge part in the responsibility of legal authority” . If an officer has the comprehension of authority, then he should be ethical in doing so. If the officer is not ethical in his relationships, then he may not be a good fit to have legal authority in decisions for the company.
The company can only build and grow with the relationships it has achieved. If the company has no positive relationships built in the merchandise sector, then it will be harder for the company to buy and sell their supplies. If this happens the company may not grow and be able to stay operational. The loss of the company would be due to the relationships the officer did not build. The company would go under, and close down because the purchasing officer did not do his job legally, ethically, or effectively. The issues of an authority cannot always be good for companies. Some companies will have a positive outcome when hiring a purchasing officer, and other companies may not have as much of a positive outcome.
When legal issues arise with purchasing officers then the company could also be included. A lawsuit may come about became of a bad deal went through, the officer did not fulfill his obligation, or a contract was not void. Many reasons could cause a lawsuit in the purchasing sector of business. If a lawsuit is brought forth towards to company in regards to a contract not being held up, then the company is also held reliable. The reason the company is held reliable is because of handing the legal authority of business transactions to the officer.
The company would then have to hold its own investigation into the legal issue, and try to fix it before losing money in court. If the company finds that the legal authority has been abused or misused by the purchasing officer then measures need to be taken. The company may fire the officer depending on what the outcome of the investigation and court case is. The company could lead to media coverage of the ordeal, and have its reputation taken out of context. The company may feel the raft of this type of misconduct for years after the incident has happened. The misfortune could give the company a bad name in the business sector, and could lose their pipeline of affiliates, vendors, and outside sources.
The court case against a company for a bad deal could lead to months or years before a decision is made in the matter. This would cause the business to have substantial loss in many ways as long as the procedure was going on, and it is fresh in peoples' minds. This one suit could also lead to a chain of other people who want to join in and report they had legal issues with the company. A long ordeal could occur with others having similar problems as the court case continues. The company could lose more finances if the other investigations are proven true. All this would have not occurred if the purchasing officer was trained properly in regards to laws, ethics, purchasing, buying legislation, and had double checked his procedure to ensure accuracy.
What a company could do to ensure the legal authority that is given; is given to the proper hand. The company should have mandatory training in regards to the rules, laws, and regulations on all aspects of purchasing. The training should include what to do if a situation occurs, and how not to get into a legal case when making agreements and contracts in the business world.
The purchasing officer should be able to pass exams concerning scenarios that he could face in the purchasing sector. The officer should pass all exams and have a probationary period before all authority is handed over.
The company would be able to see if the officer is going to be a good fit for the company, and if the company is a good fit for the officer. The trial period will give the officer a chance to prove he knows what he is doing when purchasing and selling items. During this time the officer may be more supervised or asked to provide his agenda each day before conducting business. Once the probationary period is over then the company can decide whether the officer can handle the job in the best authority, and in a legal manner. If the company decides to keep the officer and pursue his ability, then further training should be provided.
When laws, policies, or contracts are changed the officer should immediately have training in those areas. The proper training will need to ensure the advanced knowledge and ability to conduct business deals in a professional manner. The officer will need to be aware of all angles of the new laws, or updated policies and how to utilize them effectively when using legal authority. The authority should be used as a way to conduct the laws accurately; while keeping a positive outcome in the deal being made with the supplier. This will continue a positive relationship towards outside sources, and ensure the company has a bond with new clientele. The purchaser should consider quality involvement in regards to customers who want to buy from the company. If the customers are treated right in a legal manner, then the officer can continue building relationships with the company.
The legal authority has been given to the purchasing officer. “Many purchasing officers have succeeded in expanding the company’s profit, business, pipeline, and growth in the industry. The evidence that legal authority is effective in the purchasing industry” . There is a chance that the purchasing officer is not going to do the job effectively and hurt the business. This will be up to the business and the decision to change how this position is filled when hiring.
The amount of legal authority that should be given to a purchasing officer should be held in the highest regards. This type of responsibility is a significant impact on the business, and the financial obligation that can happen. It is important for the company to have high standards in the hiring decision of a purchasing officer because of the excessive authority that is in question.
If a company does not feel the purchasing officer can handle the legal authority, then it would be best to reconsider the job description or higher someone with the responsibility to fulfill the position requirements. This will keep the company safe from unnecessary risk, and expenses that could arise. The purchasing officer should ensure at the time of hire the consequences of his actions if he is not capable of fulfilling the title, and upholding the responsibilities that come with this position.
Legal authority has been found to be a huge part of the everyday work environment for a purchasing agent. It is important for every angle to be covered during the hiring process, and ensure that the officer can maintain a high performance when making purchases, and making deals. The officer should be able to fulfill the complete process from start to finish with legal authority, ethical standard, and relationship building.
Reference
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Benton, W. (2012). Aspects of Purchasing. Purchasing and Supply Chian Management, 1-34.
Cannon, S. (2016). Legal Issues. Contract Law, 1-3.
McKenney, J. (2009). Purchasing Officers Duties and Responsibilities. Purchasing Systen, 1-2.
Monczka, R. (2011). Legal Issues. Supply Chain Resource Cooperative, 1-5.
