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Purch-lympics Entry #3 - Round #2
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Enoch Dugbatey
Principal Procurement Officer, ACCRA, GHANA
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"Best Practices in business provide you with the most advanced techniques and strategies available today to help your business cut costs and improve operations regardless of the company's size.
In financial accounting, a cash flow statement is a financial statement that shows a company's incoming and outgoing money during a time period. The statement shows how changes in balance sheet and income accounts affected cash and cash equivalents, and breaks the analysis down according to operating, investing, and financing activities. As an analytical tool, cash flow is useful in determining the short-term viability of a company, particularly its ability to pay bills.
However, inadequate cash flow problem of Ghana Telecom (GT) for almost two years now has imparted negatively on its expansions programmes.
As a result, there was the need to manage procurement and other purchase to at least get the goods or services needed for expansion to increase revenue into the GT revenues. Thus, procurement department take the initiative to get the good/services by using frame and blanket agreements to help salvage the problem.
Some MRO's purchases were than by Purchase Frame Agreement (FA) and Blanket Purchasing Agreement (BPA) which was good enough to cut down cost and improve material flow as result of inadequate cash flow to back certain expansion projects which eventually will increase revenue.
The use of FA and BPA helped in increasing the inflows of all maintenance, repairs and operational goods/services whilst the generated cash flows in respect of revenues were channeled to pre-finance rollout projects and expansions works for the generation of more revenue into the company.
Also, the use of these methods help in stabilizing the prices of products/services as prices and minimum guaranteed purchase for a period for products/services have been fixed already even though there have been increases in world market price as a result of economic crunch hence revenue generated could be use in addressing expansions projects.
Since FA and BPA are both flexible and legally binding, they provide room for a partnership to grow and hence win-win for all parties."
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