Spend under management or rogue spend?

It is a simple question and math is once again involved. Take your entire purchases, minus wages and taxes. Then determine what you have on contract. The difference between the two is what you need to analyze.

The next step would be to try and figure out which commodities or services could be blended into an existing agreement or maybe should have their own contract.

Unfortunately this isn’t an easy exercise to do. Factors that lead to your challenges are: dirty data, poor allocation to accounting codes, over use of the miscellaneous category, no categories assigned or created and limited knowledge of what you buy and how it is used.

Is there a solution? The answer would be yes! Take advantage of a few e-commerce solutions and work with your suppliers to consolidate and streamline what you order and how.

You will then have the opportunity after 6 months to do a review and make better decisions based on the data collected.



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