There’s a lot of talk about cost cutting these days, not so much about smart spending. Of course, if your spending gets smarter, you’ll cut your costs, but an ongoing smart spending strategy will release cash for business development that you won’t have known you had.
Can you Get Smarter?
So where do you stand on purchasing? Can you see room for improvement in your practices? Things to think about include whether:
- you have reviewed your buying practices recently
- you always shop around for the best deals. If you don’t have time for this, do you delegate it? If yes, do you review the recommendations you get
- anyone in your company had any procurement training
- you are up to date on the legislation that affects your suppliers
- you are getting good deals across the board and not just in the main materials you buy
- you know what you are spending each month, and on what
- you check monthly spending reports each month. If so, do you investigate any unusual fluctuations?
Having looked at these areas, if you can put your hand on your heart and say you don’t think you can improve your procedures, go to the top of the class. Not many small business owners or managers can say this, so if you can’t, you are not alone.
Should you Invest in Some Training?
Procurement training is something that is commonplace in larger companies, but seems to be low on the priority list for small businesses. Yet finding the best deals consistently, and being able to negotiate more advantageous terms, can make a big difference to your cashflow.
Training can make you and your staff aware of the potential pitfalls for the unwary buyer, the mistakes that an untrained person can make and how they can be easily avoided when you know how. It can serve as a reminder of how good purchasing practices contribute to the business. A short workshop can cover how to maintain good relationships with suppliers so they give you a priority service. It can give you tips on supplier appraisal and market testing, and help you organise and manage bids from vendors of the goods and services you need.
Whether or not you decide to take the training route, it’s worth talking to your outsourced bookkeepers about this. They are well placed to advise you if you could do better in the area. They can also produce the regular reports you need and help you analyse them, so you will benefit from getting them involved.