Supply chain management involves the management of the flow of services or goods in your company. It involves a variety of tasks, but the main aim is to streamline the business’s supply-side activities and ensure that customers get value. Supply chain management also aims at giving a business a competitive advantage in the marketplace. For manufacturers, it involves the flow of goods and services and involves a variety of processes to transform raw materials into final products. One of the key departments and players in supply chain management is the purchasing department.
The Role Of A Purchasing Department
A purchasing department is tasked with procuring goods and services for resale as well as company use. In established companies, the department is headed by a purchasing manager. The role of a purchasing manager finding the best quality of goods and services for the company. Apart from finding the right quality, a purchasing department also aims at reducing costs. This will involve negotiating contracts and evaluating different suppliers to find the right one for the company.
How A Business Can Benefit from Hire Purchase
One of the requirements of a purchase manager is having excellent financial management skills. The purchasing department wants to keep the business operating smoothly and this involves finding the right assets for business use. Investing in quality equipment enhances productivity in your business. However, equipment can be costly, thus the need to evaluate different financing options.
Hire purchase agreements work to help a business acquire assets and equipment without putting pressure on the financial department. If you purchase assets in cash, you will need to pay large amounts upfront. This takes a lot of money out of the business and hurts your cash flow. It also disrupts the supply chain and flow of goods and services, considering that you do not have the cash to make other purchases.
The Basics of Hire Purchase
When looking for assets to use in your company, hire purchase is one of the best financing choices. Hire purchase agreements will see the business pay only a fraction of the cost of the items and clear the balance plus the interest in installments. This helps spread the cost and allows your business to budget appropriately. The interest rates are flat, and this makes it easier to budget for your business. The best part about hire purchase is that a business owns the assets at the end of the hire purchase contract.