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Save money by optimizing purchasing policy

Do you want to make more profit? Then save on your purchase, which is easier than investing in increasing your turnover. As an SME, you can also reduce your costs with a smart purchasing policy. In this article we explain you step by step how to do this.

There are several ways to save on your purchase. We help you with this in this step-by-step plan.

Know your costs

To be able to save, you need to know what your exact costs are. That goes beyond purchase costs. How much does a particular business unit cost in storage, maintenance and what are the additional costs (malfunctions, repairs, time for ordering and invoicing)? By analyzing the total costs (total cost of ownership) for the most important business assets, you also see where you can save money. For example, is storage very expensive? Perhaps the goods can be stored at your supplier. A great software is source to pay.

Be critical of your purchases

You can reduce the costs of your product by offering less diversity, in other words by standardizing. By this we mean that you buy fewer different products or from fewer different suppliers. This saves you time and improves your negotiating position with the supplier. Be careful not to become too dependent on one supplier, as this increases your business risk and weakens your negotiating position. Also think carefully about what you really need. Maybe you don’t have to buy everything, but you can also lease or share company assets.

Read more about procure to pay.

Compare prices

A no brainer. However, not every entrepreneur knows what is for sale. Shame! Regularly inventory the market, compare prices and request quotes. Know what something has cost in the past and what it costs with other suppliers. Do not assume that the prices mentioned are cast in concrete, often there is still a discount. You can also put out an (online) tender if you really have a large order to forgive. The more knowledge you have of the market of your suppliers (for example of their cost price), the better you can compare.

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