jump to navigation

Use the current economy to your advantage December 11, 2008

Posted by solutionsbconsultants in Business Improvement, Increase Profitability, Procurement.
Tags: , , , , , ,
trackback

The current business downturn can be used to your advantage in analyzing your vendor pool and encouraging greater competition.
Take a look at your procurement processes. To begin, generate a quick flow chart on how goods and services are being ordered.
1) Do you have a procurement card system – how is it structured, monitored and audited?
2) Is 85% of purchases competed and approved in a hierarchial manner and does the procurement department have veto power? Are all big ticket items, $5,000 or more competed on a regular basis among seven or more suppliers and approved by the procurement department.
3) Is there an ROI generated on all capital purchases.
4) What percentage of purchases are turned down.
5) Is expense reimbursement conducted according to a defined company policy and IRS rules.
6)Do executives utilize their credit cards in a responsible manner (see #5 above)

If you no on any of the above questions, you have (or will have) problems in the future. There are additional questions which can also be asked and independent oversight needed –  I recommend both an independent committee (audit committee) as well as an outside consultant.

The independent committee allows financially minded people to vaidate the company is not only focusing on their stated strategic direction but also is being fiscally responsible doing it. The consultant allows an independent perspective unbound by internal business politics or the “boss” pressure.

Take advantage of the current economy by validating spend and resources. In the long-term it will be the wisest investment you can make.

Solutions Business Consultant specializes in maximizing the efficiency of your company. Fees are reasonable and are based on your specific goals. Send us an email today at steve@costavoidance.org.

Advertisements

Comments»

No comments yet — be the first.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: