The procurement is an important department in many companies. The employees in this department are responsible for the spendings within the company. Spending too much on the procurement means the company’s net profit will be lower. Getting grip on the procurement of your company is crucial for the profits of the company. A well-organized invoice management is therefore important. In this article we will explain a few tools for a better grip on your procurement.
There is still a lot to win for your procurement. Despite what a lot of people think, outsourcing a part of the procurement can be very profitable. Outsourcing can save up to 21% on the internal costs. Besides the savings on internal costs, outsourcing is time saving and unburden different departments in the company.
The difference between direct- and indirect procurement
De procurement consists of direct- and indirect procurement. Direct procurement is the procurement of raw materials, goods and services which a necessary for the core business of your company. A bread bakery for example, needs flour to bake bread. Without flour the bakery can’t produce bread, the core product of the company. Indirect procurement is the procurement of products, goods and services which are not necessary for the core business. For example office supplies. A computer, printer and paper are important for the daily routine of the company, but without these you can still produce bread.
Outsource indirect procurement
Because direct procurement is important for the company, you will do it yourself. Most of the time you already have the best quality products, for best prices and the best conditions. Outsource the indirect procurement can save the company a lot of money. A lot of the indirect goods comes from C-suppliers. Suppliers where you just place one single order. Those C-suppliers can be 80% of your supplier base. Each of these suppliers have their own invoice, conditions and payment terms. Instead of all those different invoices, you will receive one invoice from one total supplier and have just one point of contact. Outsourcing the indirect procurement gives you better grip on your procurement.