Procedural and Regulatory

Understanding Procedural and Regulatory

  • Procedural and regulatory aspects pertain to the laws, regulations, and procedures that govern the buying for a business.
  • This area covers compliance with laws such as consumer rights acts, competition acts, and other specific industry guidelines.
  • Ignorance of laws and regulations is not considered a valid defence in legal proceedings. Hence, businesses need to ensure they are fully updated with relevant legal information.

Importance of Regulations

  • Regulations help ensure fair trade practices, protect consumer rights, and provide a level playing field for all businesses.
  • Non-compliance with regulations can lead to penalties, business disruption, and damage to the business’s reputation.
  • Regulatory compliance not only protects business operations but also enhances the company’s ethical and corporate responsibility standing.

Key Regulatory Bodies

  • Several governmental and non-governmental bodies perform the task of creating, regulating and enforcing these laws, like the Competition and Markets Authority (CMA), the Financial Conduct Authority (FCA), and the Information Commissioner’s Office (ICO).
  • It’s essential for a business to understand the role and provisions of these regulatory bodies.

Procurement Procedures

  • Procurement procedures refer to the internal rules a business follows when making purchases.
  • These procedures would typically cover processes like identification of needs, supplier selection, purchase order issuance, goods receiving, and payment methods.
  • Having robust and clear procedures reduces errors, time wastage, and potential legal issues in procurement.
  • Business must ensure legal and ethical purchasing behaviour. For example, buyers should not accept gifts or bribes which could influence their decision making.
  • Fair competition allows all potential suppliers equal opportunities to win business contracts.
  • A proactive approach to ethical sourcing can protect human rights, and respect for the environment in supply chains.

Contracts and Agreements

  • Contracts and agreements form a protective legal framework for the buying activities.
  • It’s crucial to clearly document all the terms and conditions, including pricing, delivery times, returns policy, dispute resolution methods and so on.
  • In complex or high-value transactions, it’s advisable to seek legal advice to avoid contractual pitfalls.

Understanding and adhering to procedural and regulatory aspects of business buying is essential to ensure the smooth functioning and legal compliance of any business. A significant part of business risk management involves adequate knowledge of laws, regulations and strict adherence to ethical business practices.