Sample Corporate Purchasing Policy

A corporate purchasing policy helps ensure that employees understand how and when they’re authorized to spend company money. It outlines approval workflows, documentation requirements, preferred vendors, and spending limits — giving finance teams control and employees confidence that they’re doing the right thing.

Whether your organization is growing quickly or just wants tighter oversight, this policy provides the clarity and consistency needed to manage company resources responsibly.

What the Corporate Purchasing Policy Should Include

A well-designed purchasing policy should:

• Clarify the purpose and scope: What types of purchases are covered, and who the policy applies to.
• Outline purchasing roles and responsibilities: Who can initiate, approve, and execute purchases.
• Define spending thresholds and approval limits: Clear tiers for different purchase amounts and who must approve them.
• Explain the purchase request and approval process: Steps for initiating and documenting purchases.
• Include preferred vendor guidance: Any existing supplier agreements or procurement standards.
• Detail acceptable payment methods: When to use P-cards, purchase orders, or reimbursements.
• List restricted or prohibited purchases: Goods or services that require additional scrutiny or are not allowed.
• Define documentation and recordkeeping requirements: Receipts, invoices, contracts, etc.
• Align with other internal policies: Such as the Expense Policy or Conflict of Interest Policy.
• Include a statement of compliance: To ensure adherence to financial controls, tax rules, and regulatory obligations.

Purpose of the Corporate Purchasing Policy

The goal of this policy is to:

• Establish a consistent, transparent process for making purchases on behalf of [Company Name].
• Ensure accountability and control over company spending.
• Support budget management, audit readiness, and vendor relationship optimization.
• Protect employees by helping them understand what's required before making a purchase.
• Promote ethical, efficient, and compliant purchasing behavior across the organization.

When everyone knows the rules, it’s easier to plan, spend, and scale — with fewer surprises along the way.

Sample Corporate Purchasing Policy

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Effective Date: [Insert Date]
Policy Owner: Finance and Procurement Team
Last Reviewed: [Insert Date]

1. Policy Overview

This policy outlines the procedures and expectations for all employees involved in purchasing goods and services on behalf of [Company Name]. It applies to all purchases made using company funds — including P-cards, purchase orders, and expense reimbursements — and is designed to ensure responsible financial stewardship across all departments.

2. Scope

This policy applies to:

• All full-time and part-time employees of [Company Name].
• Any contractors or consultants authorized to make purchases with company funds.
• All purchase types, including equipment, software, subscriptions, supplies, and professional services.

It does not apply to personal purchases later reimbursed (see the [Expense Policy]) or compensation-related payments (see the [Compensation Policy]).

3. Purchasing Roles and Responsibilities

• Requestors: Employees who identify a need and initiate a purchase.
• Approvers: Managers or budget owners who authorize the spend.
• Finance or Procurement Team: Ensures policy compliance, issues purchase orders, and manages vendor relationships.
• Vendors: External suppliers providing goods or services.

All parties must comply with this policy and seek clarification when uncertain.

4. Spending Thresholds and Approvals

These limits apply per transaction — not per vendor or project. Splitting purchases to stay under a threshold (“invoice splitting”) is not allowed.

5. Purchasing Process

1. Identify the need: Clearly define the item or service and why it’s needed.
2. Check for preferred vendors: Use an existing supplier if available.
3. Submit a purchase request: Complete a Purchase Request Form and submit it to your manager and Finance.
4. Await approval: Do not proceed with the purchase until approval is granted.
5. Complete the purchase: Use an approved payment method (see below).
6. Upload documentation: Submit receipts, invoices, and contracts in [Insert finance tool or shared drive].

6. Preferred Vendors

Whenever possible, employees should use approved or preferred vendors. These suppliers have been vetted for quality, pricing, and payment terms.

Check the [Vendor Directory] before sourcing new products or services. If a preferred vendor doesn’t meet the business need, Finance can help evaluate alternatives.

7. Acceptable Payment Methods

• Corporate P-card: For recurring or lower-value purchases under $5,000.
• Purchase order (PO): Required for all purchases over $5,000.
• Reimbursement: For employee-paid purchases under $500 (must follow the Expense Policy).
• Wire transfers / ACH: For vendors without card acceptance — initiated by Finance only.

Cash payments and personal credit cards (for business expenses) should be avoided unless pre-approved by Finance.

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8. Prohibited or Restricted Purchases

The following items may not be purchased without written pre-approval from the CFO or Procurement Team:

• Personal items, gifts, or donations.
• Alcohol, tobacco, or recreational substances.
• Luxury goods or excessive upgrades.
• Political contributions or lobbying services.
• Equipment for personal use (e.g., headphones, ergonomic chairs for home offices).
• Unlicensed software or tools that may create security vulnerabilities.

Any misuse of company funds may result in disciplinary action.

9. Documentation and Recordkeeping

All purchases must be documented to ensure transparency and compliance. Requestors must retain and submit:

• Receipts or invoices with vendor name, date, and line-item details.
• Any associated contracts or statements of work (SOWs).
• Internal approvals and purchase order numbers, if applicable.

Documents should be submitted within 10 business days of the purchase and stored in the designated finance system.

10. Conflicts of Interest

Employees must avoid personal gain from company purchases. This includes:

• Using vendors where the employee (or their family member) has a financial interest.
• Accepting gifts, favors, or kickbacks from suppliers.

Any potential conflict must be disclosed to Finance or Legal prior to completing a transaction.

11. Compliance and Policy Enforcement

Purchases made outside of this policy may be denied, delayed, or subject to reimbursement restrictions. Employees who knowingly violate this policy may face corrective action, up to and including termination.

Questions or clarifications about this policy should be directed to the Finance Team.

Frequently Asked Questions

1. Can I make a purchase first and get approval later?
No. All purchases must be approved before any commitment is made. Making a purchase first — even if urgent — may result in non-reimbursement.

2. What if a vendor doesn’t accept P-cards?
Reach out to Finance for help issuing a purchase order or processing a wire/ACH transfer. Never pay out of pocket for large purchases without approval.

3. How do I add a new vendor to our system?
Submit a New Vendor Request Form through [Insert system]. Finance or Procurement will review and onboard the vendor.

4. What should I do if a purchase exceeds the original budget?
Contact your manager and Finance before proceeding. Additional approval may be required.

5. Can I use a vendor not on the preferred list?
Yes, but only if the preferred vendor can’t meet your business needs. You’ll need to document the justification and obtain Finance approval.