All too often, one loses track of where all of their hard-earned money goes.
Gas, insurance, mortgage/rent – these are only three of the numerous expenses one faces each and every month. But there are more. And, needless to say, it is a challenge to track and record every dollar and expenditure.
But the power of knowing where your money is going is crucial. Having a record of every expenditure (every payment, every cost) will allow you to examine your finances and decide where you can save or, in some cases, spend more.
The importance of tracking spending is also paramount for corporations. In the corporate world, this task is often referred to as gaining “visibility in your spending.”
And as is the case with one’s personal finances, gaining visibility into a company’s spending allows an organization to see where each and every dollar is going, which, in turn, provides decision makers with data necessary data to forecast for the next year.
Company finances, however, are complex. As such, gaining visibility in your spending in the corporate sphere can be a challenge. But working towards such a goal – armed with the right questions and an e-procurement software solution – is well worth your time.
First things first: there are a few essential questions you must ask of your organization in order to begin the process of gaining visibility in your spending.
Those questions, courtesy of the Chartered Institution of Purchasing and Supply, are:
1. Who procured it?
A business must know who made each purchase on behalf of the company. Knowing who spent what will tell you how much money each department spends and what each department needs to do its job.
2. What was procured?
What is your company buying? You likely have an idea of the goods used by the business, but a complete thorough list will surely yield some surprises.
3. When and how often did you procure it?
Are there certain goods that need to be constantly re-ordered? Do we have a predictable schedule by which we order goods, or is our procurement schedule scattershot? These are just a few of the questions you will be able to answer once you understand your organization’s procurement process.
4. Whom did you procure it from?
Do you have a list of preferred vendors that your order from? Or, is your staff ordering from whomever they please? If you have a certain good that you consistently ordered, it is a good idea to establish a relationship with a specific vendor that may negotiate on price.
5. How did you procure it?
What method(s) are you using to procure goods? Cash? Money order? Credit card?
6. How much did you pay for it?
An obvious, but critical question. You must know how much you spend on each and every good you procure. This data will give you the ability to negotiate better prices on goods, along with other expectations.
How can e-procurement help?
Deciding on, and subsequently integrating, an e-procurement solution in your organization will be a great help when you embark on gaining visibility in your spending.
For example, an e-procurement solution will automatically catalogue each and every purchase order in the system (the purchase order is created electronically within the program as well). That catalogue function will allow users to easily access each of those catalogued purchase orders when the time comes to review company spending.
An e-procurement solution will also easily capture who made each request for purchase, who created each purchase order, who received each product and how much each product cost. This is the definition of gaining visibility in your spending. But as I alluded to at the outset of this article, gaining visibility in your spending is only half of the work. You must take all of the data an e-procurement solution provides you with and analyze it. Who is spending what? Where can we save? Where can we afford to spend more? Do we need to re-think our suppliers?
These are only a few of the questions you are going to ask yourself, once you analyze your spending data. And the answers you arrive at will give you a clear picture of your company’s spending.
Procurify‘s easy reporting features will provide all of these insights into your procurement with the click of a button. Take your procurement to the next level – be the hero in your next boardroom meeting, the hero your organization needs and deserves. Learn more about Procurify here or start your free trial today.