Education Center

Welcome to ProcureSafe s Education Center

Our mission is to provide valuable tools that help subscribers become smarter buyers, and ultimately improve the financial health of their organizations. Look for; Best Practice Tips, Procurement Templates and Supplier Reviews in the near future.

Ten Simple Ways for your Business to Cut Costs

While the economy continues to slow and business costs continue to grow, it s becoming increasingly difficult to rely on earnings growth to improve the bottom line. Astute managers are looking to unlock the profit opportunities that lie hidden within their businesses costs. They know the impact of a 1% decrease in cost can equal a 2% increase in profits  or 10% more in top-line sales on typical margins. Below you will find ten simple cost-cutting ideas on ways you can improve your company s profit and cash flow.

• Centralize purchasing. You may be buying the same goods from different suppliers, particularly if each department seems to have its favorite suppliers. Centralize purchasing to maximize discounts through bulk purchasing power.
• Cut the paperwork. Request monthly consolidated invoices to reduce administration costs.
• Demand a reason. Don t accept a price increase without challenge.
• Get a second opinion. Obtain alternative quotes on everything. Advise existing suppliers that you are going out to bid and give them a chance to reduce their prices.
• Call in a bad guy. Don t allow the person in daily contact with a supplier to negotiate price. Use the good cop/bad cop approach. The bad cop  removes emotion from the process and the good cop  can preserve the established, day-to-day relationship with the vendor.
• Ask for ideas. Take advantage of your suppliers  expertise. Ask them for suggestions on how to improve the way you work together. Could ordering weekly instead of daily allow them to reduce their own administrative costs and enable them to pass the savings on?
• Make space. Reduce your stock levels and encourage suppliers to hold stock.
• Watch out for automatic renewals. Contracts for leased equipment such as copying machines automatically renew. This automatic roll-over is called an ever-green clause  and it locks you into subsequent years at the same terms as the original contract or agreement. Typically, you must notify the vendor in writing, 90-120 days before the expiration date to avoid an automatic renewal.
• Beware. Service agreements, too, have ever-green clauses  and need to be terminated, in writing, during a specific time window. Just to make things confusing, termination notification periods for service agreements vary from the periods used in the agreements. The window is typically 30-90 days before the expiration date.
• Review product specifications. Ensure that products being used do not exceed requirements. Can you use second-hand pallets for transportation? Recycled toner cartridges?