H Power Company Internal Control Of Procurement

With the rapid development of the energy sector of the country, to increaseinvestment in the power industry infrastructure and upgrading of rural power gridsupporting the H power companies want to strengthen the centralized procurementbusiness management, improve the efficiency of capital and thus enhancecompetitiveness. The companies expect the integration of internal and externalresources, centralized procurement management, to complete the transition to themodern centralized procurement management mode in supply chain environment bythe traditional management mode.The procurement is part of the enterprises the main business activities of greatsignificance to the development of enterprises, the H Electric Power Company since2010began to conduct centralized procurement power supplies work, socorresponding to the procurement operations also have many drawbacks, the presenceof a lot of problems, requires the company in the development ofadopted variousmeasures to overcome and improve process, which requires a sound internal controlsystem of centralized procurement business.The paper is divided into three main sections, the first describes the overallsituation of the H Electric Power Company, as well as centralized procurementoperations since2010to carry out the specific data in the current status quo ofcentralized procurement business and highlights the various problems.The second part of the gradual analysis of the the H power company focusedprocurement business issues related to the current management situation and existing,in-depth analysis of the H concentration of power companies internal controlprocurement operations.Relying on the entire centralized procurement business chain,planning, vendor selection, procurement way to determine, the determination of thepurchase price, the signing of business contracts, and material payment clearing sixkey nodes for detailed analysis. Reasonable for the accuracy and flexibility of the theH power company procurement planning, emergency supplies procurement plan approval process, vendor selection mechanism, after the evaluation of theperformance of suppliers bidding, purchasing, procurement pricing principles andstandards, detailed analysis of the specific issues of the business contract is signedand the custody of the existing tools, materials and money settlement elaboratedmethod of analysis of the the H power company when the actual centralizedprocurement operations to implement its hazards and possible adverse companyconsequences.The third part is given to the specific issues raised by the second part of therecommendations and practices.Procurement plan formulation and monthly purchasing plan decomposition,emergency supplies in the reasonable allocation of the H store company procurementof the most basic starting point.Take full advantage of the access and annual evaluation of suppliers as much aspossible to eliminate substandard suppliers or potential suppliers, to provideprotection to the scientific and technological content of the company’s products andeven the national power supply facilities and safety factor.Reasonably flexible procurement and conversion of centralized procurementoperations, the use of the framework agreement in order to achieve economies ofscale, reduce procurement costs; retail purchases to speed up the supply of emergencypower supply facilities guarantee.Not blindly pursue low-cost strategy, but the convergence of product grades andmarkets, raw materials, and other factors to rational development of the bid price, andwill provide a good foundation for the long-term development of the H powercompany.The Business Contracts signed transition from paper-based mode for theelectronic mode, as well as several sets of reasonable data software interaction willstrengthen the suppliers to participate in the centralized procurement operationsenthusiasm, reduce staff finishing work on a paper contract.Combined with the procurement planning a monthly cash flow budget, andflexible billing methods and techniques, and will improve the utilization efficiency ofthe H power company funds, settlement of the use of materials of money to further constrain the suppliers, in order to achieve a healthy, reasonable cycle.H power company internal control, centralized procurement operations to ensureeffective centralized procurement payment business cycle run through the analysis ofthe problems of centralized procurement operations to identify lack of control of thecompany within the procurement operations, combined with the day-to-day workpractices, explore how to enhance control through centralized procurement businessto achieve effective control of centralized procurement chain business node, so as toimprove the effectiveness of the company’s purpose.