New Report Identifies Opportunities for Cost Savings
source Tim Rice
In an effort to more accurately track departmental expenses, Purchasing has created a report to identify spending patterns. Among other advantages, Purchasing plans to use this information to spot contract opportunities. For example, if a department consistently spends a large amount of money with one particular vendor, Purchasing will see the trend and can approach the vendor about negotiating a lower price. Better yet–Purchasing can competitively bid the product to identify vendors who might be able to provide lower pricing with superior service.
The Departmental Spend Analysis shows the total dollar amount and total number of transactions a department has with each vendor. The transactions are broken out by type of order: business to business, automatic purchase order, standard purchase order, and P-card. The results are used to steer contract efforts.
A vendor with a high number of transactions could be a good candidate for a business-to-business agreement and earn a spot in our Shop Contracts section in EPIC. The resulting electronic catalog would make ordering quick and convenient. Moreover, electronic orders and payments reduce processing costs.
The report is also used to track P-card spend. Most of our business-to-business vendors do not charge freight on the electronic orders, so if a department is using a P-card to buy goods that are available through a business-to-business vendor, Purchasing can point out the potential savings.
Expect a call from your Purchasing team to set up an appointment to go through a spend analysis for your department–it is time well spent to see how you spend your funds.