How Companies Handle Engineer Purchase Requests: Three Approaches to Procurement

In the fast-paced world of engineering, efficient procurement processes can make or break project timelines. Companies have developed various approaches to handle purchase requests from their engineering teams, balancing cost control with technical needs. Let's explore the three main organizational structures, the typical approval process, and how accounting teams manage these transactions.

Three Main Categories of Purchase Request Handling

Engineers as Buyers

In smaller organizations or specialized technical fields, engineers often communicate directly with vendors. This approach recognizes that engineers understand technical specifications best and can resolve issues without non-technical staff filtering information. Companies using this model typically:

• Allow engineers to select vendors and negotiate technical requirements
• Require copying purchasing on communications to maintain oversight
• Trust engineers to be cost-conscious while prioritizing technical needs
• Work well for highly specialized equipment where technical expertise is crucial

When engineers serve as their own buyers there are typically a lot of purchases on credit cards, and generally POs are created only for vendors that require them. If teams are not proactive in tagging their expenses, there can be a lot of work come month end close for accounting teams as they track down the correct cost categorizations.

One Buyer for the Company

Mid-sized companies often centralize purchasing with a single procurement specialist who handles all engineering requests. This model:

• One person creates a streamlined communication channel with vendors
• Allows for consistent negotiation tactics and relationship building
• Enables volume discounts through consolidated purchasing
• May introduce delays when technical specifications require clarification
  • Once your company reaches 10 or more employees, it can be beneficial to consolidate procurement. Your buyer can not only streamline the purchasing process, but also make it easier for your engineers by removing the friction of purchasing. This can free up your team's time to focus on engineering problems. A dedicated buyer also manages your internal procurement software, which helps alleviate accounting and organization reporting issues.
  • Fully Staffed Procurement Team
  • Larger organizations implement comprehensive procurement departments with dedicated specialists. These teams:
• Include procurement engineers who bridge technical and purchasing knowledge
• Manage complex supplier relationships and contracts
• Implement strategic sourcing practices across multiple projects
• Create standardized processes for all purchasing activities

Large organizations maintain a fully staffed procurement team to handle all of the complexity that comes with a large company. It's important to maintain a balance between speed and organization, as too many procurement rules can slow down progress and add too much red tape and paperwork to the rest of the organization.

Generic Approval Process for Purchase Requests

Regardless of company structure, most purchase request processes follow these key steps:

• Needs Identification: An engineer identifies a requirement for goods or services
• Purchase Requisition Creation: A formal request is submitted with detailed specifications and justification
• Review and Approval: Requests route through appropriate managers based on amount, department, and type of purchase
• Supplier Selection: Identifying suitable vendors, often requiring multiple quotes for comparison
• Final Approval: Higher-level sign-off for budget allocation and compliance verification
• Purchase Order Creation: A formal PO is generated and sent to the selected vendor

The most effective companies understand that procurement isn't just about controlling costs-it's about enabling engineers to access the resources they need efficiently. The right balance between technical oversight and procurement expertise creates a system where projects move forward smoothly while maintaining financial discipline.

We've created Thruline with this in mind - supporting your company's journey as you grow from a team of engineers into a large company. We're with you every step of the way to make sure your operations run smoothly and support any procurement workflow you need! Check us out!