Spend analysis is a vital part of business operations that is aimed at reducing procurement costs. You can cut procurement costs by collecting and analyzing expenditure data and using that data to identify opportunities to improve cost efficiency throughout the procurement process. Here are some of the best practices in spend analysis and an overview of how they can benefit your business.
1. Spend Analysis Best Practices Increase Transparency
One of the first spend analysis practices to focus on is increasing the transparency of your expenses. When you can see all of your expenses clearly in a simple format, you will have a much easier time identifying your highest costs and determine which areas can be improved.
2. Invest in P2P Software
If you want to make the most out of spend analysis and cut costs without compromising on quality in terms of your suppliers, you need to invest in P2P software. Making the transition to Procure-to-Pay can sound daunting, but it isn’t all that complicating and making the switch will ultimately leave more money in the company coffers.
P2P software effectively enables businesses to fully automate purchasing while making the entire process more efficient. While many businesses have traditionally relied on manual purchasing processes, automation is the future of procurement and it will have a dramatic effect on spend analysis. When implementing P2P software, it’s important to have a knowledgeable guide to walk you through the process and ensure that the transition is as smooth as possible. You can count on companies like ProcurePort to help you unlock the full potential of P2P solutions. ProcurePort is also the smart choice for sourcing the most productive P2P software,
3. Study Intent to Reign in Buyer Behaviors and Attitudes
The Chartered Institute of Purchasing and Supply, or CIPS, has determined that rather than changing the process, it is buyer behaviors and attitudes that need to be altered and managed to make spending more efficient. Once behaviors have been changed, the results of your spend analysis will be much more favorable.
This is more of a preventative practice designed to make spend analysis less painful once you tally up all of the company’s expenses using a software program.
4. Incorporate Reverse Auction Software
One way to improve the results spend analysis is to incorporate reverse auction software. By using software to conduct reverse auctions, you and your company can save money on both services and commodities.
For example, one of the ways that reverse auction software can help save you money is by dramatically reducing the cost of changing vendors. Reverse auction software is one of spend analysis best practices for many reasons including the fact that it looks beyond the price and ensures that you are getting the both best value and quality.
5. Use Spend Analysis Software
The single most powerful and effective practice to implement is the use of spend analysis software. One of the most important things to look for is cloud-hosted spend analytics. With the right spend analysis software, you can automate pesky time-consuming tasks like classifying and organizing your spend data.
Automating these tasks does much more than save you countless hours of precious time, automation through software also ensures incredible accuracy that is difficult if not impossible to achieve manually.
The increased accuracy, transparency, and efficiency of spend analysis software makes it easy to identify savings opportunities in your procurement framework.
Although spend analysis software is one of spend analysis best practices, not all software packages are created equal. If you want the best features and the highest return on your investment, you need to source your spend analysis software from ProcurePort.
Finding the same range of features and comparable quality for the price is nigh impossible. ProcurePort is the best name in spend analysis software for a reason, we understand procurement needs inside and out and are dedicated to saving businesses as much money as possible.
Decimate Your Procurement Costs with ProcurePort
Although we’ve covered some of the most effective practices in spend analysis, if you really want to spend less on procurement, you need spend analysis software from ProcurePort. We have powerful programs that can cut your procurement costs like butter.