The world's difference between "raw materials" and "material procurement"

Let's first take a look at what raw materials and material procurement are:

     1. Raw materials refer to natural substances or semi-finished products used for manufacturing or processing into final products. Raw materials can be natural resources from nature, such as ore, oil, natural gas, wood, water, soil, etc; It can also be substances processed through biological or chemical reactions, such as steel, plastic, fertilizers, glass, paper, etc. In the production process, raw materials are essential as they are processed, altered, and combined into final products such as automobiles, furniture, electronic products, food, etc. Therefore, raw materials are the foundation and important component of manufacturing and industrial development.

raw material

     2. Material procurement refers to the process in which an enterprise or organization purchases necessary raw materials or products from external suppliers or markets to meet production, operational, or other business needs. Material procurement is an important link in supply chain management, which involves finding, screening, evaluating, selecting, and purchasing suitable raw materials or products to ensure that enterprises can deliver high-quality products and services on time.

Material procurement

     The process of material procurement includes demand analysis, supplier search, inquiry, negotiation, contract signing, order issuance, delivery, acceptance and other stages. In the process of material procurement, enterprises need to consider various factors such as material quality, supplier reputation, delivery time, price, payment method, etc. At the same time, they need to have sufficient communication and negotiation with suppliers to ensure the smooth progress of the procurement process. Effective material procurement can help companies reduce costs, improve quality, optimize supply chain management, and enhance market competitiveness.

     In summary, material procurement and raw materials are two different concepts. Raw materials refer to the materials that have been accepted and stored in the enterprise inventory, including main materials, auxiliary materials, purchased semi-finished products, maintenance spare parts, packaging materials, fuel, etc. Material procurement is a subject used by enterprises for planned cost accounting, referring to materials that are in transit or have not yet been accepted and stored. If the enterprise uses planned cost for material accounting, the material procurement subject must be used for accounting. As long as the material is under planned cost, regardless of whether it is stored or not, it is first included in material procurement. The main differences are as follows:

     1) The cost accounting methods for material procurement and raw materials are different. Material procurement is an account used based on actual cost accounting, while raw materials are an account used based on actual cost accounting. When enterprises adopt the planned cost method, as long as the materials are included in the planned cost, regardless of whether they are received or not, they are first included in the material procurement and then carried forward to the procurement cost. If the planned cost method is not used, the material procurement account is not required and will be directly included in the raw material account.

     2) In the case of materials purchased but not yet accepted for storage, they should be included in the in transit materials account. After receiving the acceptance and storage documents, transfer them to the raw material account.

     In short, the difference between material procurement and raw materials is that material procurement refers to materials that have not yet been accepted and stored, which are used according to planned cost accounting and included in the material procurement account; And raw materials refer to materials that have been accepted and stored, and are accounted for and used according to actual costs, recorded in the raw material account. In addition, if materials have been purchased but not yet accepted for storage, they should be included in the in transit materials account.