Acting as a buyer, you have the flexibility to use the appropriate type of sourcing to achieve value for money in your purchases. According to the CIPS study guide, there are four common types of sourcing: single sourcing, sole sourcing, dual sourcing, and multiple sourcing. Each type of sourcing is well-suited to specific market conditions and purchasing objectives. Single sourcing In single sourcing, a company chooses to purchase from one supplier. Although there are some suppliers who are capable of…

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In the previous posts, you understood the role of the income statement and the balance sheet for buyers. Today I’ll continue exploring the final component of the financial statements: the cash flow statement. This document describes how much money flow in and out of the business over a period of time. I’ve attached an example of a company’s cashflow statement in 2023. Normally, the income statement is structured into 3 sections: cash flow from operating activities, cash flow from investing…

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In the previous post, I shared insights about the income statement and its implications for buyers. However, they may miss out some key information if they only look at the income statement. Financial statement typically includes the income statement, the balance sheet and the cashflow statement. Each offer different aspects, allowing buyers to outline a broad picture of a supplier’s financial health. The buyer needs to take them into account when assessing suppliers. In this post, I continue to analyze…

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Supplier appraisal is a crucial step in achieving value for money in every purchase. Acting as a buyer, you need to assess various aspects of suppliers to choose the best one who is capable of fulfilling the business’ needs. One key consideration is the supplier’s financial health, which holds strategic importance for the buying organization. The question is: how can buyers properly assess a supplier’s financial capabilities? According to the CIPS study guide, buyers are encouraged to review the supplier’s…

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Most students are afraid of exam questions involving financial caculation as they struggle to remember the formulas. Many students cram for the exam, which does not allow them sufficient time to absord financial concepts coverd in the CIPS books. You can only keep this content in your head if you understand them deeply and practice regularly. There is variety of financial ratios which provide you with different insights. Selecting appropriate ones will depend on your purposes. In this post, I…

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In the L4M1 exams, many students frequently encounter questions related to procurement policies, procedures, and processes. Some struggle to elaborate on their answers regarding policies because they don’t fully understand what policies are or where they originate from. In this post, I will outline a classic hierarchy (Figure 1) that shows how broad strategies are refined into actionable steps. Stage 1: Coporate strategies An organization is established with a specific mission. Its leaders begin with a broad goal and strategic…

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We are pleased to invite you to our FREE revision event on CIPS L4M5 – Commercial Negotiation, scheduled for this Sunday (10th August 2025). Please find the details below: Topic: How to successfully pass CIPS L4M5 exam Time: 9:00 AM Central Africa Time (8:00 AM UK Time), Sunday, 10th Aug 2025. Click here to know your local time. Recording: Available on Monday, 11 Aug 2025 If you are interested in attending, kindly register by providing your information. We look forward…

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Once the need is justified, buyers begin seeking the best means to satisfy it. They must assess whether their company can fulfill the requirement internally. Even if they are capable of doing so, it’s still essential to look outward to the market to compare the efficiency of available options. Conducting market analysis is not easy, it demands considerable time and effort. Skilled buyers with profound market knowledge and strong communication skills can obtain valuable insights, leading to informed decisions. If…

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