To squeeze the greatest value from every penny you spend for your organization, look beyond just purchases to save money. Grab a greater hold on spending with these practices:
Reduce the number of vendors. Instead of buying one or two items from several vendors, consolidate your spending with just a few who offer many of the products you need. By pooling your purchasing power, you can squeeze better deals from vendors with the total value of your purchases.
Each department shouldn't be buying supplies from different places; work with admins in other offices to create one purchasing program. (Vendors will charge different prices to various departments of the same organization—if no one is paying attention.)
In addition to volume savings, reducing the number of vendors also trims the workload on tracking and paying invoices.
Track trends. At least annually, consolidate, slice and dice your spending to analyze costs by factors such as office, product and supplier.
Monitor contract terms. When a vendor offers a discount for prompt payment, ensure invoices speed through AP to take advantage of the savings. On the other end, review what services and premiums each vendor offered in its contract and whether its performance matches that promise.
For quick reference, create a database with basic vendor contract information, including expiration dates. Set reminders on your calendar for deadlines, such as when you need to file rebate forms.
Before accepting any deal, review your expectations. Example: Don't assume the IT department will provide support and training for new software. You could end up paying a premium for those vendor services when you could have negotiated that as part of your initial purchase.
Work with your vendors. Tell those you do business with where your priorities lie. Example: If lower cost trumps speedy delivery, the vendor can consolidate shipments.
Bring everyone on board. Rein in rogue spending by explaining your purchasing program to all employees and including it in training for new hires. Tell them which vendors to use and how to navigate your system, including the importance of submitting invoices quickly.