6 Purchasing Best Practices You Need Today
32 years ago, a small software company released what is now the cornerstone of both mom and pop shops and Fortune 500 companies alike. That’s right, I’m talking about Microsoft Excel.
With the advent of PayPal in 1998 and Amazon Prime in 2005, the eCommerce world took a quantum leap into the future for personal purchasing, yet the older enterprise systems for purchasing, budgeting, and spend tracking all relied on a platform as old as Garfield for any real analysis. This had us asking ourselves, “Where’s the beef?” Surprise: there was none, and in 2014, our co-founders set out to change all that. In doing so, our company has laid out the six best ways your business can save money on purchasing while using Order.co or any other system.
Far too often, companies are stuck in a “wild west” mentality of purchasing. There are no set parameters for who can purchase which items, who can approve those purchases, what the budget and line item restrictions are, etc. Spend analysis and budgeting is often done retroactively at the end of a payment cycle by vendor, where departments or locations are asked why a specific anomaly occurred. Adopt a system that allows you to manage all this at once: the more automation and guidance provided for purchasers the better. In bringing spending under one roof you will also start to be able to make actionable decisions off your data.
Train your team
The key to healthy spending across departments and locations is to ensure that everyone is on the same page. When selecting a purchasing system make sure that it is easy to use for everyone who would be placing an order: it should be familiar, intuitive, and convenient so people want to use it instead of feeling compelled to. Then give training collateral or sessions to the necessary team members to ensure that the platform and processes are properly understood.
If possible, lean on your purchasing platform for help! For example, Order.co account managers and customer success teams ensure that you and your team are fully comfortable with our platform and are able to squeeze every ounce of value out of it by giving customized walkthroughs and webinars whenever needed.
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Maintain a database of the items you are purchasing
It is important to be able to standardize your data across vendors. Goods like paper towels could be ordered from different vendors under slightly different product names or SKUs at different prices. Establish a system whereby you can measure at the line level spending across vendor, user, location, geography, or whichever breakdown makes the most sense for your business.
Set a budget and stick with it!
Often times it’s difficult for finance to have clear oversight of budgeting. Charges roll in at the end of the month when the toothpaste is already out of the tube and the fateful words “you went over the budget!” are often heard too little, too late. As a result, financial prudence becomes tougher and tougher as a business grows.
Set your employees up for success with a pre-established budget and a system for everyone to easily track themselves. On Order.co, we find that over 90% of our clients’ users stay within budget just because they have a way to easily see in real-time how much they are spending within that period.
Leverage your buying power
While appropriately managed spend data is a prerequisite, it is important to take the next step and leverage your business’ buying power to drive better prices through your vendors. Create reports to identify your top SKUs and develop relationships with your vendors whereby you can drive better pricing based on increasing volume.
For long-tail spending or any situation where your purchasing team might not have time to negotiate and re-negotiate, implement a platform like Order.co that can manage your strategic sourcing for you. Order.co brings a world-class array of partner vendors to our customers, allowing them to see exclusive line item savings that otherwise simply could not exist for an individual business.
Spreadsheets, PO’s, clunky ERP’s, and a myriad of invoices all lead to one thing: a lack of transparency. Spend transparency at every level encourages an environment of responsible spending instead of making it a “gotcha” for management to enforce after the fact. Your users and locations will be empowered by a system or process that shows them their budget, spend, and impact on the company as they place their regular orders each day.
Like any good relationship, success in purchasing relies on unity, communication, and the help of others. Order.co delivers the customizable and adaptable capabilities that today’s fast paced environment demands, all while giving power to the purchaser and control to the C-Suite. You can find out more by requesting a demo.
Schedule a demo to see how Order.co can simplify buying for your business.
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