Purchase - Risk Register

Following are the potential risks of a purchase department in a typical organization. There can be more specific risks depending on the environment of each company.

1. Inaccurate planning leading to short/excess purchase. (high severity & low frequency)

2. Short purchase (of raw material) leading to loss of production hours & loss of sale. (high severity & medium frequency)

3. Excess purchase leading to accumulation of non-moving stock & blockage of funds. (high severity & medium frequency)

4. Purchase at higher rate leading to high cost of purchase. (medium severity & high frequency)

5. Price fluctuations leading to variance in purchase cost & inaccurate projections. (medium severity & high frequency)

6. Bad quality of goods purchased leading to bad quality finished goods & loss of production. (high severity & medium frequency)

7. Unauthorized purchases & kick back schemes. Biased vendor selection. (high severity & low frequency)

8. Infavourable terms of purchase leading to high cost & interest loss. (low severity & low frequency)

9. Non-monitoring of vendor performance leading to continued purchase at infavourable terms / of bad quality. This leads to heavy financial losses. (medium severity & medium frequency)

10. Unauthorized payments to vendors towards fraudulant/fake purchases. (medium severity & low frequency)