A buyer of record places the order in its own name, pays the supplier and then invoices you, so the supplier never becomes your vendor. A purchasing agent places the order in your name, as your representative, so the supplier bills you and has to be set up in your systems. To tell them apart, look at whose name is on the purchase order.
Both take buying work off your team. They differ in who holds the contract, who pays the supplier and how much vendor paperwork stays with you. That difference decides which one fits a given purchase.
Side-by-side comparison
| Question | Buyer of record | Purchasing agent |
|---|---|---|
| Whose name is on the purchase order? | The buyer of record’s | Yours |
| Who pays the supplier? | The buyer of record | You |
| Who invoices you? | The buyer of record, as one vendor | Each supplier |
| Does the supplier enter your vendor master? | No | Yes |
| Who is the supplier’s contract party? | The buyer of record | You |
| What your accounts payable team handles | One invoice per order from one vendor | An invoice from every supplier used |
| Best fit | One-off and infrequent suppliers | Repeat suppliers you want a direct relationship with |
What a buyer of record does
A buyer of record is the legal buyer in the transaction. It issues its own purchase order to the supplier, pays the supplier by whatever method the supplier accepts, and then bills you for the goods or service plus its fee. Your team still approves the purchase and receives the goods. The supplier deals with the buyer of record on commercial matters such as price, terms and payment.
This is what third-party procurement and pass-through purchasing mean in practice. Our article on how a buyer of record works walks through the full order, from request to invoice.
What a purchasing agent does
The term “purchasing agent” has two common meanings. Inside a company it is a job title for a buyer who places orders. As an outside service, a purchasing agent finds suppliers, gets quotes, negotiates and places orders on your behalf, acting in your name. Sourcing agents that find overseas manufacturers are a familiar example.
Because the agent acts for you, the contract is between you and the supplier. The supplier invoices you, you pay the supplier, and your team sets that supplier up in your vendor master first. The agent’s value is in finding the supplier and handling the buying work. The paperwork of a new vendor stays with you.
When to choose a buyer of record
- The supplier is a one-time or rare need. A shop that makes one prototype part, a local vendor for one event, a specialist you will use once this year.
- Vendor setup is slow or costly. If adding a supplier means forms, a tax form review, bank details checks and approvals, a buyer of record skips all of it for that purchase.
- The supplier will not go through your onboarding. Small suppliers sometimes decline long supplier portals or extended payment terms.
- You want fewer vendors and fewer invoices. Many small purchases run through one vendor and arrive as one type of invoice.
For more on this situation, see why one-off vendors cost more than they seem and buying prototype parts without adding new suppliers.
When to choose a purchasing agent
- You will buy from the supplier again and again. A regular source should have its own contract with you, your terms and a direct relationship.
- You want to own the supplier relationship. For example, a key component supplier whose quality and capacity you plan to manage over years.
- The work is mainly finding the supplier. If the hard part is locating and vetting a manufacturer, an agent with sourcing knowledge earns its fee, and the ongoing orders can run in your own name.
Many organizations use both. A buyer of record covers the long list of one-off purchases, the tail spend. Suppliers that become regular sources move into your own vendor master, under your own contracts. Our guide to tail spend management explains how to split the two.
Cost factors
Pricing models vary by provider, so compare what is included, not only the headline fee. Things to look at:
- How the fee is set. Some providers charge a fee per order, some a markup, some a retainer or a sourcing fee. LeVasseur Consultants charges a per-order fee, quoted per project.
- What the fee covers. Placing the order is the core service. Expediting, delivery tracking and returns handling may be extra.
- Payment terms. A buyer of record pays the supplier before you pay it, so ask what terms it offers you.
- Your own internal cost. With a purchasing agent you still carry vendor setup, supplier invoices and payments. With a buyer of record, that work moves off your team.
- Taxes. Sales tax treatment can change when a third party buys and resells to you. Rules differ by state, so ask your tax adviser.
Common questions
Is a buyer of record the same as an importer of record? No. An importer of record is the party responsible for clearing goods through customs when they enter a country. A buyer of record is the party that buys from the supplier. Sometimes one company plays both roles, but they are separate jobs.
Does a buyer of record own the goods? In the purchase it is the buyer, so the supplier sells to it. It then resells or passes the goods through to you under your agreement. The agreement should say when ownership and risk pass to you.
Can a purchasing agent also act as buyer of record? Some can. Ask each provider directly whose name will be on the purchase order and who will pay the supplier. The answer tells you which model you are getting.
Do I still approve each purchase? You should, in both models. Neither a buyer of record nor an agent should place an order you have not approved.
Next step
Our pass-through purchasing and tail spend management page explains how LeVasseur Consultants works as a buyer of record for growing organizations. For plain definitions of the terms used here, see the procurement glossary. If you have a purchase in mind, send us the details and we will tell you whether it fits.